It does not have active seat size and significant chain volume due to market controversy arising from the previous BTC price bull market.
Research warns that Bitcoin
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Sign it down
$26,466
There is still a lack of chain volume and an increase in active seats that characterize bull markets.
In a candid assessment of the 2023 resurgent BTC price, chain analysis platform CryptoQuant warned that Bitcoin could be even weaker than that.
Active chairs don’t replicate the bull market paradigm
On-chain metrics on the flip-side and some flash bull signals haven’t been seen for years, leaving a healthy dose of skepticism among many analysts.
CryptoQuant contributor Yonsei_dent is one of them, writing in one of the platform’s Quicktake blog posts this week that 2023 will not be the same as previous bull markets.
The problem, he explains, is in active seats, which are not increasing in number even though BTC/USD is up almost 50% year to date.
“Active Addresses includes all metrics for BTC sending and receiving addresses, providing a view of how active the demand market is,” the blog post reads.
“The ‘value’ of an asset is determined by the laws of supply and demand in the market. Crypto markets are no exception. In order for asset prices to increase, market demand and demand must be supported.”
The accompanying chart shows the 30-day moving average (MA) of the active index rising following the end of the 2018 bear market and the March 2020 COVID-19 cross market crash. 2023, by contrast, is still producing the same trend.
“You may see an increase in active seats (30DMA) as the 2019 bull market pulls back and recovers from the 2020 COVID-19 shock,” Yonsei_dent added.
“I am concerned that the 2023 rally will not add active speech.
Too much business, not too much
Other research about the behavior of Bitcoin investors yielded similar results, with a return of $25,000.
Related: ‘Snap Back’ to $20K? 5 things you need to know in Bitcoin this week
Analysis firm Glassnode notes that volumes on the chain remain low, with long-term holders (LTH) and short-term holders (STH) reluctant to spend.
“Despite a net increase in chain activity, and in ATH UTXO overall, the number of conversions has fallen dramatically, for both long-term and short-term owners,” he said in the latest edition of the weekly newsletter . . . . “Weekly Against China,” he wrote.
There are some encouraging signs of improving mood, with LTHs sent to exchanges now largely profitable.
In mid-January, Glassnode shows that 58% of LTH coins sent to the exchange were transferred at a loss, compared to just 21% earlier this week.
