With many on-chain metrics for Bitcoin (BTC) still in a bearish range, continuing the recent price recovery will require increased demand and fees spent across the network, says Glassnode.
An assessment of the average market growth over the past week came from blockchain analytics firm Glassnode in its latest report, “The Week On Chain,” on Monday.
In it, the analysts cited a sideways growth in transaction demand, active Bitcoin addresses remaining in a “well-defined descending channel” and lower network fees as reasons to dampen investor excitement over the 15% rise in the price of BTC over the past week. However, the price of Bitcoin is currently down 2% in the past 24 hours, trading below $23,000 to $22,899, according to CoinGecko.
The report begins by highlighting the characteristics of a bear market, which include a decrease in on-chain activity and a rotation from speculative investors to long-term stockholders. He points out that the Bitcoin network still exhibits all of these traits.
Glassnode wrote that the drop in network activity could be interpreted as a lack of new demand for the network from speculative traders with long-term contracts (LTHs) and investors with a high level of conviction in the network’s technology. The report stated:
“With the exception of a few spikes in activity during major capitulation events, current network activity indicates that there is still little influx of new demand so far.”
Unlike last week, when a significant level of demand appeared at the $20,000 level for BTC and established a floor, the additional demand needed to sustain any further price increases could not be observed. Glassnode refers to the continued decline in active titles as a “low bear market demand profile,” which has been in effect primarily since last December.