After spending the previous week under a shroud of bearish sentiment, Bitcoin’s on-chain fundamentals indicated a state of recovery according to glassnode’s recent weekly insights.
The report suggested that the price of Bitcoin continued to keep moving sideways between $9,500 and $9800 in the charts, and on Tuesday, the pattern gave rise to the “Bart Simpson” pattern. As we all know, prices spike above $10,000 after that, but only 15 hours later, a massive correction took place in the charts.
Now, according to the Glassnodes Network Index, which evaluates the overall improvement of Bitcoin’s fundamentals, an uptick has been suggested after a few downward trends. The GNI index increased by 6 points, as shown in the chart above, bringing the largest digital asset back to the strong zone at 62 points.
In addition, over the past week, Network Health identified a 5-point hike that suggested improvements in network growth and network activity. This is a significant highlight of this week, as the number of active and new entities reduced by 10% at the end of May. The report also added,
“Liquiditysaw a 7 point increase last week, bringing it back into the neutral zone after having dropped down into the weak zone the previous week. This increase was mainly driven by an 18% increase in transaction liquidity as on-chain transactions increased and fees continued to decrease after experiencing a post-halving spike.”
However, the report indicated that it is imperative to observe these improvements over the current week to understand whether the positive sentiment will trigger an uptrend or whether this week’s recovery was an uncorrelated period of growth.
Miners continue to hold Bitcoin
One of the trends that have not changed since the 3rd Bitcoin halved is the holding sentiment among Bitcoin miners. As shown in the chart above, since the reduction of block rewards, the volume of BTC moving from the miner’s wallet to the exchanges have been extremely low over the last 4 weeks.
Historically, it has been observed that in the past two halvings, the flow of BTC from miners to exchanges has usually decreased by 50%, but at present, the number of BTC sold by miners has plummeted to 65.
It can be speculated that either the miners are in a position to keep up their expenses without cashing in their pre-halving accumulation, or that they are waiting for the price to surge in order to cash in at higher profitability.
However, the narrative would be turned on its head if Bitcoin were faced with a massive correction due to its inability to break past $10,000. Over the past month, Bitcoin has tried to overwhelm the mark for a total of four times, only to face a pullback a few hours or days later.