The crypto analytics firm Glassnode is not yet convinced crypto is on the road to recovery after the recent market rally.
In a new analysis, Glassnode notes that on-chain transaction demand for Bitcoin (BTC) remains “lackluster at best.”
“The net result is that Bitcoin blocks are partially empty, Ethereum gas prices are at multi-year lows, and the rate of EIP1559 burning is at all-time-lows.”
The analytics firm notes Bitcoin on-chain transaction fees are “firmly within bear market territory” due to the low level of transaction demand. Glassnode says when fees go up, it could be an early indicator that the crypto market is recovering.
BTC is trading at $22,816 at time of writing. The top-ranked crypto asset by market cap is down nearly 2% in the past 24 hours.
Glassnode also notes that both Bitcoin and Ethereum (ETH) have seen some encouraging upticks in terms of spent output profit ratios (SOPR).
“Attention can now shift to whether these uptrends can be sustained and improve, as a gauge for whether this is simple bear market relief, or a more constructive structural shift.”
The SOPR on-chain metric determines if crypto traders are selling at a profit or loss. If the SOPR is greater than 1, holders of the asset are selling at profit. Otherwise, they are selling at a loss.
Explains the analytics firm,
“For Bitcoin, SOPR is attempting to break above 1.0 for the second time since early June. Usually, the market requires a number of attempts before escape velocity can be reached. An ideal bullish scenario would be a break above 1.0, and then a retest, finding support.
Ethereum has had more luck, piercing above a SOPR value of 1.0, and finding its first retest as support.”
ETH is trading at $1,614 at time of writing. The second-ranked crypto asset by market cap is down more than 2% in the past 24 hours.
Read Glassnode’s full analysis here.
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