Plato Data Intelligence.
Vertical Search & Ai.

5 Positive On-Chain Signals in a Bear Market

Date:

Crypto markets have been through a whirlwind over the last few months, with several unprecedented events leading to prices dropping to new lows and market activity dwindling. Here are five pieces of on-chain data that suggest the worst might be over:

Bitcoin Miner Revenue

There has been no shortage of bad news for Bitcoin miners over the last few months, with a number of large players declaring bankruptcy. Higher hashrate and increased difficulty on the network has led to sky-high electricity costs that, in most cases, have exceeded the profit these miners earn.

Data from The Block shows that BTC miner revenue increased 26% in January to $601.2 million – a sign that miners are finally beginning to recoup some of their losses.

ETH Supply at All-Time Lows

Ethereum’s circulating supply reached a new low for the first time since The Merge turned ETH into a Proof-of-Stake cryptocurrency.

The supply reached a low of 120.5 million tokens, as per data from UltraSoundMoney. Its current issuance stands at 653,000 ETH per year, with a deflationary supply of -0.014% per year.

The decrease in supply is a result of increased demand for the network, which causes the average ETH burned from each transaction to rise. (To learn more about Ethereum tokenomics, read here.) 

Bitcoin Back Above Realized Price

Bitcoin is trading at around $23,700, having surged 41% over the last month. The market leading digital asset’s rally in January has pushed its price back above its realized price level, according to Glassnode data shared by On-Chain College.

Historically, BTC has traded below this level continuously during periods of low market activity, characteristic of bear markets. The price climbing back above realized price could be a sign of traders’ renewed faith in the digital asset.

Spot and Derivatives Volume

Trading volumes in both spot markets and derivatives markets have also rebounded significantly since December 2022. Data shared by The Block Research Director Lars Hoffmann showed that centralized exchange volume surged 67.2% to $597.6 billion in January. Binance accounted for nearly 80% of this market share, followed by Coinbase and Kraken which respectively  made up 9.3% and 2.9% of this retail trading volume.

Futures open interest also increased considerably over this period. Bitcoin monthly futures volume surged 73% to $656 billion over the month.

Net Inflows Finally Return

Glassnode’s weekly newsletter highlights another positive signal for market participants. On a net basis, there are $20 million in daily flows, which analysts describe as “a remarkably even balance.”

This marks a significant change from November and December, where exchanges saw periods of net outflows on the order of $200 million to $300 million each day.

 “The largest monthly outflow of coins in history occurred in this Nov-Dec period, hitting -200k BTC/month in outflows across all exchanges. Today, exchange net-flows have returned to neutral, reflecting a cooling down of outflows,” wrote the analysts.

spot_img

Latest Intelligence

spot_img