Network on-chain activity at all-time high

Let’s face it: Not much is happening with Bitcoin. Development in the Bitcoin network is slow and unspectacular. In the development overview The largest and oldest cryptocurrency is therefore in 11th place – behind Solana (SOL) and the Internet Computer (ICP). In the last few weeks, however, that has changed. With the integration of ordinal inscriptions, there is movement in the network.

The now 160,000 Bitcoin NFTs have polarized in recent weeks. Opponents criticize the “waste” of valuable block space. The proponents see an increased demand for this.

A neutral look at the data reveals more. The average block size has changed significantly, increasing from a typical upper limit of 1.5 megabytes (MB) to 2.0 and 2.5 MB now. The BTC inscriptions are by nature larger files and therefore occupy more limited space in each bitcoin block.

The average block size has increased with the integration of the ordinals. I source. glass node.

A second indicator of the increased on-chain activity: The Unspent Transaction Output (UTXO). The total number of UTXOs is therefore 137 million marked a new all-time high. UTXOs are the current sum of all possible outputs in the network that have not been made, i.e. satoshis, which can be transferred using the associated private keys. Also the Taproot usage hit a new all-time high.

BTC transaction volume ‘extremely low’

In addition to the activity on the Bitcoin network, the price has also increased significantly. The transaction volume on the other hand, has “remained extremely low”, as Glassnode im weekly analysis report explained. “Such low values ​​could only be observed a few times in the course of history,” it continues.

The BTC transaction volume is extremely low. I Source: glass node.

“What is interesting is that since 2016 these cases have been in bear markets and towards the lows of a significant sell-off or correction.” According to Glassnode, this provides indications that the market is overbought, at least in the short term.

MVRV indicator is rising again

A look at the MVRV indicator provides clarity. The measured value describes the ratio of the market capitalization to the so-called “realized value”, i.e. the actual value stored in Bitcoin. If the ratio of market capitalization to realized value is below 1, this indicates oversold – a trend reversal is more likely.

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That has come true. Because after the brilliant bull rally of the last few weeks, Bitcoin has meanwhile risen to over 25,000 US dollars. At the same time, the MVRV value has also grown and written down at 1.23 at press time. It remains to be seen whether the price development of Bitcoin is sustainable.

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