Bitcoin And Ethereum Eye 30% Jump In August Despite Lacklustre On-Chain Activity

Bitcoin And Ethereum Eye 30% Jump In August Despite Lacklustre On-Chain Activity

This year, Bitcoin has yielded under external pressures, printing more lows and keeping other crypto assets pinned down despite efforts by investors to keep prices buoyed. The first half of 2022 saw the cryptocurrency plummet roughly 75% to briefly trade below $19,000 for the first time since December 2020.

Ethereum was not spared in the sell-off and plunged by over 81% to a multiyear low of $886 despite tapping an all-time high of $4800 in early November. The global cryptocurrency market capitalization also lost over half its value, from $2.9 trillion to just under $1 trillion.

On-chain Activity Taps Lowest Levels

Despite displaying intense price action, the price drop coincided with a gradual deterioration of their aggregate network usage and congestion by BTC and Ether networks. According to the latest report by Glassnode, Ether gas prices have slumped to just 17.5 Gwei, with BTC fees dropping to their lowest level since May 2020. Transaction demand and active addresses on the two networks have also witnessed a gradual decline since May 2021.

“With exception of a few activity spikes higher during major capitulation events, the current network activity suggests that there remains little influx of new demand as yet.”Glassnode wrote.

The SOPR – the silver lining for BTC, ETH resurgence?

Despite the two largest networks portraying lacklustre on-chain activity, the Spent Output Profit Ratio (SOPR) indicator has shown signs of a recovery. The SOPR indicator captures the average profit or loss realized by the market on spent coins.

If the indicator rises above 1.0, it indicates that more profits are being realized, signalling that the market has enough demand to push prices higher. In contrast, when the indicator drops below the 1.0 value, investors are taking more significant losses, meaning that coins are sold below their average cost.

Currently, the Bitcoin SOPR is attempting to break above the 1.0 value after a failed attempt in June. “Usually, the market requires several attempts before escape velocity can be reached. An ideal bullish scenario would be a break above 1.0, and then a retest, finding support.” Glassnode wrote.

C:UsersNewtonDownloads�8_btc_sopr (1).png

Ethereum’s SOPR has pierced above the 1.0 value and is currently retesting at support, an encouraging indication that the cryptocurrency could soon be out of the woods.

C:UsersNewtonDownloads�9_eth_sopr.png

That said, whereas both Bitcoin and Ethereum have seen an excellent rebound in prices, emerging from highly oversold conditions, investors may want to keep watching the SOPR and other indicators that show demand activity to gauge if the ongoing relief rally can sustain or better yet, turned into a full-blown bull market.

Share:

Share on facebook
Facebook
Share on twitter
Twitter
Share on pinterest
Pinterest
Share on linkedin
LinkedIn

Follow Us

Most Popular

Get The Latest Updates

Subscribe To Our Weekly Newsletter

No spam, notifications only about new products, updates.
On Key

Related Posts

Breaking: Bitcoin (BTC) Price Risks Falling Below $21,000, Here’s Why

The Bitcoin (BTC) price can fall below $21,000 as the bear hug tightens. The price recently touched a high of $25,135 and retraced to a low of $23,243. The downward price trend has formed a regular bearish divergence with a short-term target of falling to $21,000-$20,000. The Crypto Market Fear and Greed Index has tumbled

BTC, ETH, DOGE: Why Major Cryptos Are Trading In Red Today?

Today’s slump in the price of crypto giants including Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE) has left investors disappointed. At the press time, BTC was trading at $23,379.13, down by 4.05% over the last 24 hours. Meanwhile, the price of ETH and DOGE was spotted trading at $1,845.20 and $0.082021, a decline of 5.11%

Ether (ETH) Falls for Fourth Consecutive Day, Is Merge Mania Ending?

After a strong rally in the last 45 days since the beginning of July 2022, the crypto market has once again come under selling pressure. The broader crypto market has been retreating for the fourth consecutive day in a row, including the top two giants Bitcoin and Ethereum. As of press time, Ether (ETH) is

Fidelity Chief Explains Why Bitcoin (BTC) Is Cheap At Current Level

Over the last 45 days since July 2022 beginning, Bitcoin and the broader cryptocurrency market have given a strong run-up. As of now, Bitcoin is currently facing resistance at $24,000. Jurrien Timmer, Director of Global Macro at Fidelity believes that Bitcoin is currently “cheap” as per the BTC adoption curve thesis. Timmer explains that Bitcoin’s