The price of Bitcoin stands firm around the critical area of $34,000, hinting at further bullish potential. However, market analysts wonder if enough clues point to the upside or if BTC will return to $20,000.
As of this writing, BTC trades at $34,150 with sideways movement in the last 24 hours. The cryptocurrency recorded a 15% profit the previous week and remains a top coin performer by market cap.
Bitcoin On-Chain Activity Rises Hinting At A Bull Run?
Data from the analytics platform mempool.space shows an increase in on-chain activity on the Bitcoin network. This spike occurred in February 2023, when BTC transactions rose above 50 Mega Virtual bytes (MvB).
According to the analytics platform, the above metric measures the size of transactions and blocks on the BTC network. The larger the transaction, the more space they required.
As seen in the chart below, each time there is a rise in the price of BTC, there is a surge of activity leading to the rally. This happened in 2017, and 2021, and it is happening this year, which suggests the ecosystem is blooming, onboarding more users, and preparing for a more significant rally like in the previous year.
In addition to the increase in activity, it is possible to see the decline in the metric during the bear market and conclude bull markets record high activity. In contrast, the bear market records much less user activity, and they are generally cheaper to transact.
However, unlike 2017 and 2021, this year, this ecosystem saw the implementation of non-fungible tokens (NFTs) and new applications boosting these metrics. Thus, it is harder to determine if the current rally can reach similar levels than in previous years as the BTC DeFi ecosystem attracts more users looking to leverage the network for utility rather than long-term investing.
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The surge in BTC on-chain activity could be attributed to the cyclical nature of the crypto market. When the price of BTC and others rise, or there is an expectation of further profits, more users on-board the network.
As a result, the number of transactions recorded increases. However, many believe that with the implementation of NFTs in the BTC ecosystem, transaction…