- A leading on-chain data provider has observed that the highest drop in 2023 was only -18%, which is relatively shallow compared to previous cycles.
- Despite the price fluctuations experienced so far this year, the BTC market continues to show signs of resilience and strength in the current cycle.
- The report also examines Bitcoin’s recovery from the bear market lows in November 2022, when it traded as low as $15,000, and notes that its value has increased by 91% since then.
The biggest decline in Bitcoin price in 2023 was 18%, which could be an indication of strong demand for BTC.
Bitcoin Shows a Tendency Towards an Accumulation Phase
According to a new report by Glassnode, Bitcoin’s price consolidation around $30,000, which is the “midpoint” of the 2021-22 cycle, suggests that on-chain metrics indicate a tendency towards an accumulation phase in the market.
Glassnode evaluated the depth of the “bull market corrections” experienced so far this year and compared them to previous cycles. The on-chain data provider observed that the highest drop in 2023 was only -18%, which is relatively shallow compared to previous cycles. According to the firm, this suggests “a relatively strong degree of underlying demand for the asset.”
The report also examined Bitcoin’s recovery from the bear market lows in November 2022 when it traded as low as $15,000, and noted that its value has increased by 91% since then. Glassnode states that this recovery “bears a notable resemblance to recovery rallies in previous cycles.”
Based on these findings, despite the price fluctuations experienced so far this year, the BTC market continues to show signs of resilience and strength in the current cycle.
Inscriptions Boosted Network Activity in Bitcoin
Glassnode also highlighted the impact of Inscriptions on on-chain activity in the Bitcoin network. Inscriptions led to an increase in BTC network activity a few months ago.
Typically, an increase in this measurement is seen as a positive signal for growing adoption and a healthy network. However, the presence of inscriptions, which involve significant address reuse and small transfer volumes, requires a more nuanced interpretation. With the decline in Inscriptions, active address momentum has started to increase again in recent months.
A steady increase in the number of active addresses on a cryptocurrency’s network is known to be a precursor to a sustained increase in its value. As long as the sentiment remains positive, further price increases are expected for BTC.
