- Analysis by Glassnode showed that Bitcoin is consolidating at the $30,000 level.
- The year-to-date performance of BTC has been strong amid the clearing of network congestion.
- Monetary transfer volumes have started to pick up, indicating positive momentum that may promote liquidity.
A recent report by on-chain analytics firm Glassnode took a closer look at Bitcoin and the trends associated with the flagship cryptocurrency. The analysis found that BTC displayed a robust recovery since the beginning of 2023, and much of that can be attributed to the emergence of ordinals and inscriptions on Bitcoin.
The report was compiled by Checkmate, the lead on-chain analyst at Glassnode. Checkmate’s analysis showed that Bitcoin was consolidating at around the $30,000 level, which has emerged as the mid-point for BTC’s 2021-2023 cycle. Meanwhile, the year-to-date performance of Bitcoin remained historically strong.
According to the report, inscriptions and ordinals played a considerable role in Bitcoin’s rally this year. However, with the recent cooling off of inscriptions, the Bitcoin network congestion is starting to clear. Meanwhile, monetary transfer volumes continue to grow and are up 75% since the lows witnessed in November last year.
Checkmate highlighted that the maximum drawdown in the current cycle was 18%, which was significantly less than the drawdowns witnessed in previous cycles. The analyst suggested that the restricted drawdown may be indicative of a strong degree of demand for BTC. The recovery from November lows was also similar to that seen in previous cycles.
Inscriptions and ordinals contributed significantly to network congestion as well as network activity. The Glassnode analyst noted that network activity has been in consistent decline since May 2023. This has helped free up the network and led to the clearing of unconfirmed transactions across Bitcoin mempools.
At the time of writing, BTC was trading at $30,726, up over 1% over the past 24 hours. Data from CoinMarketCap showed that the flagship cryptocurrency had a market capitalization of $597 billion, with the daily trading volume coming in at $11.8 billion.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
