Over the past few days, Bitcoin (BTC) has found itself in a lull, consolidating above the key $9,000 price point after a monumental surge last Friday and Saturday.
Despite this price action — or lack thereof, rather — there are some analysts claiming that the cryptocurrency market remains in precarious territory, specifically due to on-chain metrics.
Bitcoin Network Signals Caution
According to Bytetree, a crypto analytics firm, Bitcoin investors should be cautious heading into the coming week.
The firm’s analysts remarked in a newsletter that quarterly velocity, a measure of network activity, remains below 600%, before adding that the short-term Network Value to Transactions ratio is “signaling caution this week.” Concluding its analysis, Bytetree wrote:
Although short term transaction activity has increased, we are watching for more sustained network activity prior to indicating a neutral or bullish market signal.
This call for caution comes after Bitcoin’s on-chain metrics flipped extremely bullish during the surge from $7,300 to $10,500.
On Saturday, Charlie Morris, founder of ByteTree, wrote that Bitcoin fees paid by transactors had increased by 43 percent, the value of cryptocurrency sent had surged by 66 percent, and network velocity had hit 747 percent between October 25th and 26th. Morris told a trade publication earlier this week that velocity is a “tracker of how actively each [coin] moves through the economy.”
Morris’ use of on-chain analytics to try and determine the cryptocurrency market’s direction is similar to the thesis of Adaptive Capital’s Willy Woo, who has become known for using on-chain metrics to predict price action.
Still Setting Milestones
While the blockchain remains in a lull, a key milestone was still recently surpassed.
As pointed out by Yassine Elmandjra, a crypto asset analyst at markets research/fund management firm ARK Invest, the Bitcoin network has now seen $1 billion worth of fees paid. To put it more simply, all Bitcoin transactions thus far have incurred an aggregate fee of $1 billion. Crazy.
What’s even more notable about this number is that it was all accomplished with a decentralized system, with fees being distributed to a global group of miners that voluntarily maintain this blockchain for monetary incentive.
It's official. The Bitcoin network has surpassed 1 billion USD in cumulative fee revenue. pic.twitter.com/lKzstEX3eI
— Yassine Elmandjra (@yassineARK) October 30, 2019
Cumulative fee revenue may not mean much in and of itself, so here’s a way to put it that may put this statistic into perspective:
Tuur Demeester, the founding partner of Adamant Capital, framed this statistic best when he wrote on Twitter today that this effectively means that “$1B funding the world’s strongest firewall.”
Title Image Courtesy of Unsplash.com