That’s according to the latest data collected by on-chain analytics firm Glassnode this week.
BTC, ETH data mimics “mid to late 2020”
In its latest weekly report, “The Week On-chain,” Glassnode revealed that while price action remains quiet, on-chain metrics suggest that it could well be lagging behind much more bullish sentiment.
“As the Bitcoin and wider cryptocurrency market rallies higher, a remarkable on-chain divergence continues to form across both Bitcoin and Ethereum,” the report summarizes.
“On-chain activity on both chains has remained quiet relative to bull market highs, even as price momentum continues upwards, and bullish trends in supply dynamics remain in play.”
The signs are everywhere — from mushrooming network participation to record transaction value, Bitcoin and Ethereum are anything but quiet under the hood.
Active entities on the Bitcoin blockchain are particularly noteworthy. Despite prices being near $50,000, these are still one-third below all-time highs but growing rapidly.
“It is notable that current activity on both chains is similar to the stable pre-bull accumulation range established in mid to late 2020,” analysts added.
The disparity between these on-chain tendencies and price action is already well known and bears similarities to the crypto market of Q4 2020, just before the latest bull market really took off.
“Whilst the divergence between price and on-chain activity is historically abnormal for a full scale bull market, it is not an uncommon signature for the pre-bull, and pre-supply-squeeze dynamic,” the report continues.
“These periods often accompany the end of bear market accumulation where the investors who remain, are the strong hands, those with the highest conviction.”
Bitcoin token transfers hit a two-year high
One nuance focuses on transaction numbers. These are likewise almost 40% below their peak, but in terms of BTC transferred, Bitcoin had its biggest week in two years this month.
“These transactions were not from exchanges,” Ki Young Ju, CEO of fellow analytics firm CryptoQuant, commented, providing several possible explanations for the numbers.
Should the status quo continue, the outlook for BTC and ETH price action is rosy, Glassnode concludes, adding that only “aggressive selling” of coins that have not moved for an extended period of time would constitute an invalidation of the bull signals.