Certain on-chain indicators suggest the crypto market’s current downtrend may not end up being as brutal as past bear markets, according to Lucas Outumuro, head of research at analytics firm IntoTheBlock.
In a new analysis, Outumuro acknowledges that it’s getting “harder and harder to argue we are not in a bear market.”
[adinserter block="1"]Though the total crypto market cap is down 57% its all-time high of about $3.07 trillion, which it hit last November, Outumuro notes that fundamental indicators have dipped less compared to previous bear markets.
“As a high portion of demand comes from speculation, it is normal for transaction fees to plummet severely as trading sentiment dwindles through bear markets. Remaining at higher levels, however, suggests stickier demand.
Bitcoin has been averaging above $500,000 in daily transaction [fees] in May 2022, compared to $130,000 in May 2018. Ethereum and other crypto assets mirror this same pattern of less pronounced drops in on-chain activity than in prior bear markets.”
Both Bitcoin (BTC) and Ethereum (ETH) are also displaying consistent progress in development activity despite the recent bearish price action, according to the researcher.
“Commits to the Bitcoin network have grown over 50% in the past two years as developer efforts consistently improve. This has been one of the few leading indicators for growth in crypto, since being an open-source ecosystem, it relies on developers globally contributing for sustained improvement of these networks.”
At time of writing, Bitcoin is changing hands for $29,625, down over 3% on the day.
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