Over the past seven days, BTC’s price has been hovering around the narrow range of $46K to $51.7K. Also, a few analytics depict a lull in activity since the start of the year. However, Glassnode’s latest data reveal that BTC supply dynamics currently have bullish undertones.
The report added that various on-chain signals indicate that BTC market signals are almost at the mid-point of being bullish or bearish. The inference is that the BTC market is currently undergoing consolidation.
The Start Of A Possible Bullish Move
The report further compared the daily trends on the BTC blockchain today with previous years. Thus, the report concluded that this year’s BTC trend would behave similar to 2019 and not like it behaved five years ago or last year. Part of the reason for this conclusion was the rise in BTC daily activities with on-chain entities now nearly at the 280K level daily.
The transaction count was another factor that made Glassnode report reach its conclusion. The Glassnode data revealed that more on-chain activities preceded BTC’s bullish moves in 2017, 2020, and 2021. However, this year, BTC’s action is reminiscent of its mini bull run between April and August 2019, notably the deep correction.
There were more than 300k transactions daily during BTC’s bullish move of 2017, 2020, and 2021. By contrast, there has been a dip in transaction counts and price like it happened in 2019. However, traders can expect a temporary price rise despite the drop in transaction counts.
The resemblance between the BTC price action of 2019 and 2022 made Glassnode researchers conclude that BTC price will continue to trade within a narrow range unless there are changes in on-chain activities that can result in enormous requests for BTC block space. Part of the report’s conclusion states that “BTC price movement will remain uneventful until there is significant demand for BTC block space.”
Why The Bullish Undertones
Even though the BTC market is currently bearish, the rising number of non-zero balance wallets proves that the market might still be bullish. There has been a nearly 23.5% rise in the number of non-zero BTC wallets in the last 12 months. That percentage represents a 1.43m increase in BTC users with time.
Furthermore, BTC’s market supply dynamics indicate that there are now more institutional investors and long-term BTC holders than ever before. This dominance will reflect on the on-chain activities and will be highly bullish for BTC price this year compared to last year when market volatility hugely impacted its price.
Meanwhile, BTC.com data has revealed that BTC hashrate has declined significantly following Kazakhstan’s crackdown on internet use, with crypto miners being caught in the fray. The decline is noticeable given that the central Asia nation is home to nearly 19% of the global BTC hashrate.
The drop in hashrate is yet to have a cumulative effect like what happened during china’s clampdown on crypto. However, miners will undoubtedly be worried as they may need to move their operations elsewhere if there is no resolution to the situation in the shortest time.