Despite the current macro headwinds, Bitcoin and the broader cryptocurrency market performed strongly last week. The crypto market is currently undergoing a partial retracement and it will be interesting to see if it can sustain the $1 trillion benchmark.
Glassnode brings some on-chain metrics to understand if this is just a bear market rally or a bull trend reversal.
Bitcoin on-chain metrics
Data providers are calling the current price surge a bearish impulse as Bitcoin’s active addresses continue to stay in the downtrend channel. The moderate network activity suggests that there is currently little influx of new demand.
Additionally, on-chain transaction fees show that we are still in bear market territory. Currently, the total fee paid daily is only 13.4 BTC. Unlike the current bear market, bull markets often maintain high commission rates and show the first signs of a recovery in demand.
In the current scenario, Bitcoin network blocks remain partially empty and the network is less congested. Glassnode said: “Overall, this indicates that the Bitcoin network continues to dominate his HODLer, and that, when viewed through the lens of on-chain activity, we have yet to see a notable new recovery in demand.”
However, optimistically speaking, the Bitcoin Lightning Network public channel continues to hit new all-time highs. The public capacity of the Lightning Network has now reached a total of 4,405 BTC. Despite strong bearish sentiment, Lightning Network capacity has grown by nearly 20% over the past two months.
Ethereum on-chain metrics
Over the past 12 months, Ethereum has experienced the same trend as Bitcoin. Total network usage and congestion are getting worse over time. Despite the recent rise in ETH price, network congestion remains at its lowest. Over the last year, Ethereum trading demand has been gradually declining.
Glassnode explains: This is the lowest network congestion and gas price since May 2020, before his DeFi Summer in May 2020 and before the start of the bull market. ”
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