By 
Bitcoin (BTC/USD)
Even though bitcoin seems to be stalling below the psychological $30,000 threshold, it has still posted a rise of over 67% since January 1. But for the past month and a half, the cryptocurrency market leader has remained stuck, with no signs of resuming its upward momentum. Focus on the Bitcoin network.
Network activity remains low
The number of active addresses (orange curve in the graph below), i.e. those sending and receiving bitcoins on the network, remains relatively low compared with historical data.
A sign that crypto-investors are now more interested in waiting and watching than in short-term speculation. Historically, a sustained rise in bitcoin's price has been accompanied by an increase in the use of its network, notably in exchanges.
Glassnode
To give more weight to this metric, let's take a look at network transfer volumes.
Comparing the scale and trend of bitcoin transfer volumes on the network on a monthly and annual basis can be informative.
The graph above compares the monthly average (red curve) of transfer volume with the annual average (blue curve), which allows us to appreciate the relative changes in prevailing sentiment on the network, and also helps identify when trends are pivoting regarding the activity of market players. Let's take a look at the graph, then comment on it.
Glassnode
Put simply, if the monthly red curve is greater than the annual blue curve, then this indicates expanding activity on the blockchain, which is typical of improving network fundamentals, and increasing network usage.
Conversely, if the monthly red curve is lower than the annual blue curve, then this indicates a contraction in activity on the blockchain, typical of a deterioration in the network's attractiveness, and a decline in usage by network players.
Despite the rise in bitcoin's price at the start of this year, monthly transfer volumes remain well below those of 2021 and much of 2022. A rise in volumes is also essential for a healthy recovery in bitcoin, but this is clearly not yet the case.
Let's take a look in the short term to see if we're still seeing capital flowing into the network.
Speculators VS Investors: RHODL RatioThe RHODL Ratio is an oscillator which, in a way, compares the dollar wealth held by newcomers (over one week) versus older investors (between one and two years). Let's take a look at the chart and then go into more detail about the RHODL Ratio.
Glassnode
Rising speculation: An upward trend in the RHODL ratio (red arrow above) suggests an increase in the USD wealth held by new bitcoin buyers (over one week). Typical of bull market rallies and speculative spikes.
Rising dominance of old bitcoins: A downward trend in the RHODL ratio (green arrow) indicates a dominance of USD wealth held by players holding "old" bitcoins that were acquired between 1 and 2 years ago. This drop in RHODL suggests a trend towards accumulation and retention of bitcoins over the medium-to-long term. In other words, BTCs are becoming older on average (relative to their purchase date).
Change in dominance between short-term speculator and long-term investor: a stagnant RHODL (blue arrow) indicates that the rate of change between the dominance of older and newer BTC is at equilibrium. This equilibrium is often observed around periods of market transition, such as the highs of distributive markets and the lows of accumulation markets.
At present, as the chart above shows, there has been a clear rebound in speculation (RHODL rise) since the beginning of the year, which goes some way to explaining the rise in bitcoin's price since January 1.
Historically, a recovery in the RHODL ratio after a long phase of decline signals a long-term turning point. On the other hand, bitcoin has often taken many months to regain its historical highs after this RHODL reversal.
Moreover, if we look at the state of bitcoins that are currently both profiting and losing, this corroborates the relatively long time before we could see bitcoin return to much higher price zones.
Bitcoin: Unrealized profits and losses
Put simply, unrealized profit/loss takes into account the actual USD value by which a bitcoin is in gain/loss. In other words, this metric (Net Unrealized Profit/Loss - NUPL) weights each bitcoin in circulation by the difference between its current price and its purchase price, and adds up all bitcoins in profit and loss. NUPL expresses the dollar value of total net profit or loss as a percentage of market capitalization.
Naturally, if we transpose this metric onto a curve, as the number of bitcoins in profit increases, so does the curve representing NUPL, and vice versa as the number of bitcoins in loss increases.
Glassnode
What's interesting to note is that, historically, when the profit/loss statement falls into the "Optimism - Anxiety" zone, particularly after experiencing a "Capitulation" zone with regard to NUPL, bitcoin finds itself in a relatively long rebuilding zone.
In other words, when bitcoins in circulation find themselves, on average, slightly in profit, it can take many months before they return to a profit structure far superior to that of losses.
We can see this in the chart above, with the many months it took for bitcoin to move from an "Optimism - Anxiety" to a "Belief - Denial" structure in previous BTC cycles, notably 2016-2017 and 2019-2020.
Finally, let's take a look at the activity of "small" and "large" addresses holding bitcoins.
1 million addresses hold at least 1 BTC
The number of addresses holding at least 1 bitcoin in their wallet has reached the historic threshold of 1 million.
If we take a closer look at which address categories own these bitcoins, we find a clear increase for "small" and "large" holders since the spring of 2022, and an even greater increase since the fall of FTX in November 2022, when one bitcoin was equivalent to $17,000. In the chart below :
- Red curve: Addresses with at least 10,000 BTC, i.e. $280 million
- Yellow curve: Addresses with at least 10 BTC, i.e. $280,000
- Blue curve: addresses with at least 1 BTC, i.e. $28,000
Bitcoiners accumulate
Glassnode
All in all, although Bitcoin has been showing signs of accumulation and speculation since the start of the year, activity on the network is still sluggish, a sign that optimism has not definitively returned to the market's leading cryptocurrency. What's more, the current economic climate and the lack of regulatory clarity for the industry on the other side of the Atlantic are also not working in its favor.
In other words, bitcoin is running out of gas to get the ball rolling once and for all, all the more so as macroeconomic fog and the twists and turns of US crypto regulation are getting in the way.
