Bitcoin’s Long-Term Metrics Resemble Early Stages From Previous Bull Markets: Bitfinex

With speculators flocking to BRC-20 coins by script, the Bitcoin blockspace has seen an explosion in demand in recent weeks.

This dramatic shift in network activity has sent transaction fees to levels not seen in the past two years.

Signs of agitation

new a report Posted by Bitfinex notes that the inception of BRC-20 and Bitcoin-based smart contracts is transforming the blockchain into a “more dynamic and enabling smart contract chain” than its traditional reputation of a “live digital ledger of currencies.”

Data shows that BRC-20 tokens accounted for over 60% of all transaction activity on the Bitcoin blockchain last week, contributing nearly 43% of all fees.

However, the rapid popularity of the BRC-20 and subsequent increase in fees has strained other metrics. Active and new addresses interacting with the network are near two-year and annual lows, respectively. This trend may indicate that high transaction fees are likely to deter new and existing users of the Bitcoin network.

The report added that while the higher transaction fees likely prevented new Bitcoin addresses from increasing, they also bolstered the health of the network. The brief spike in mining revenue was certainly a welcome reprieve for miners across the network after the 2022 bear market. So much so, that bitcoin miners generated a total of $17.75 million in revenue on May 8th.

Bitcoin long-term metrics

In the short term, the events of the past week, including the recent double halt to Bitcoin withdrawals from Binance, appear to be negatively affecting the sentiment of the major crypto-asset. Thus, the short-term metrics still point to a possible pullback in the Bitcoin price.

Zoomed out, long-term on-chain indicators, on the other hand, seemed more appropriate and more like the early stages of previous bull markets. It was noted that a strong bullish signal for the market came in the form of Bitcoin trading comfortably above the 200-day EMA as well as the price made.

Another positive sign is Bitcoin Realized HODL Multiple which has been on an upward trajectory for the last 90 days. Essentially, this indicates that wealth denominated in US dollars is once again heading towards new demand flows. In such a case, “even when profits are made, the market is able to absorb them.”