The Bitcoin price floor tends to stabilize around USD 42,000 in the short term. Several signs indicate that there has been an increase in the internal activity on the network.
The price of the pioneering cryptocurrency has maintained a moderate rally since early March. Various indicators reflecting fundamental parameters of the Bitcoin (BTC) network show that its upward trend could continue.
Active addresses, new on-chain entities, number of transactions and transferred volumes are prominent indicators. In other words, those figures consist of crucial data for the analysis of the value of the cryptocurrency.
Glassnode recently reported that on-chain entities are seeing a gradual recovery to reach 110,000 new addresses daily. That means more people are buying Bitcoin for the first time, and the internal activity on the Bitcoin network has increased.
The new entities gain considerable momentum during the bullish runs from 2016 to 2018 and 2020 to 2021. The last stage of on-chain addresses has shown a gradual recovery since July 2021. It is relevant to note that this phenomenon usually occurs when the price is preparing for a bullish run.
There is a Moderate Boom in Daily Bitcoin Transactions
The number of daily transactions on the Bitcoin network has been on a moderate upswing since July 2021. In November, the initial growth in daily transactions peaked at over 220,000, but the number currently reaches 215,000.
Despite a modest increase in daily transactions, its current level is below the 300,000 mark of early 2021 and mid-2019. It is also below the nearly 350,000 operations of December 2017, when the price of Bitcoin approached USD 20,000 for the first time.
The Volumes Transferred on the Bitcoin Network Increase
There is a correspondence between the rise in addresses or transactions and the development of a bullish phase. However, those indicators do not provide data on the economic weight of the new actors on the network. Although the current increases in those indicators are similar to 2019, the volumes transferred are not.
Between 2017 and 2018, daily transferred volumes spiked sharply around the December 2017 high, above USD 8 billion. However, it quickly drops below USD 2 billion.
Since 2021, daily transferred volumes have remained high, fluctuating around USD 10 billion. Despite the current correction, the decline has resulted in much higher values than in previous bearish periods.
That boom is evident in the high percentage of transactions above USD 1 million in those bearish phases. Between 2018 and 2019, there were between 20% and 30% of transactions higher than USD 1 million. Those large transactions currently have 65% to 70% dominance.
Bitcoin Increases in Price and Couples with the S&P 500 Index
New elements have emerged amid the growing correlation between Bitcoin with traditional assets. The S&P 500 index is undergoing a correction but has shown a smaller decline this year. Its decline has been 6.45%, compared to Bitcoin (11.52%).
While the S&P 500 exhibits a 6.6% rally, Bitcoin exceeds that stock index by almost 10% appreciation. The BTC price floor continues to rise and is approaching USD 42,000 in the short term.
By Alexander Salazar
