Today, the situation in the cryptocurrency market on a day-to-day basis looks like this.

Changes in cryptocurrency rates over the past 24 hours

And here are the rate changes over the last month.

Changes in cryptocurrency rates over the last month

What’s going to happen to Bitcoin?

The recent rebound in the price of BTC is not reflected in the blockchain’s activity statistics, experts say. The number of active crypto-addresses in the Bitcoin network remains in a downward channel, and transaction fees have not seen a marked increase. That is, the increase in price was definitely not due to an increase in demand for Bitcoin transactions, but for less important reasons.

Bitcoin network fees

According to Cointelegraph’s sources, Glassnode’s report shows the main characteristics of a bearish trend: a decrease in activity on the network as well as a smooth transition of most BTC from short-term investors to long-term holders. Bitcoin still exhibits the above signs, so a local rebound in its price can only be a so-called faiure – a short-term period of growth before a new wave of decline.

The decline in online activity can be interpreted as a lack of new demand from speculative traders rather than long-term holders, who have a high level of confidence in the prospects of Bitcoin and other coins at the same time. Here’s a rejoinder from analysts to what’s going on.

With the exception of a few spikes during major BTC collapses, the network’s current activity suggests that the influx of new demand is still small.

Note that Bank of America representatives would definitely disagree with such an approach. As they noted the day before, the cryptocurrency market is becoming increasingly ready for a new phase of growth. You can read more about the analysts' version in a separate piece.

Unlike last week, when a significant level of demand established around $20,000 on the Bitcoin chart and created a “bottom”, there are no additional triggers needed to support further price growth now. The analysis also highlighted similarities between the current state of the market and the situation in 2018-2019. This is shown more clearly in the chart below.

The ups and downs of demand in the BTC network

Glassnode staff’s conclusion: don’t join the euphoria on short-term market jumps just yet. Fundamentally, Bitcoin is still in a bearish trend, and even if there is no new major wave of its plunge, the cryptocurrency may well fluctuate within a narrow horizontal channel for a long time. Therefore, long-term investors, who are willing to wait years for growth, are more likely to invest in cryptocurrency for now.

Read also: The creator of Etherium predicted the failure of large companies in the meta-universe. Why?

Negative news could also be a roadblock to the bull run: alas, this week there is that too. In particular, the US Securities and Exchange Commission (SEC) has filed an indictment against eleven people suspected of setting up the Forsage financial crypto pyramid scheme. The charges were filed in US District Court in Illinois. SEC officials allege that the platform’s founders and promoters fraudulently raised more than $300 million from “retail investors around the world”. Here’s their cue.

The Forsage platform did not sell or intend to sell any real, consumable product to bona fide retail customers during the relevant time period and had no apparent source of income other than funds raised from investors.

Bitcoin exchange rate

Such incidents cause reputational damage to the cryptocurrency industry, causing some to still associate crypto with fraud. However, it’s not just frauds that take a bad toll on the reputation of digital assets.

As European Central Bank (ECB) officials pointed out the previous day, central bank digital currencies (CBDCs) may well gain an edge over cryptocurrencies in international payments. At least, the primacy in this matter was given by experts in favor of CBDC. Among the competitors of this instrument, the ECB experts mentioned traditional banking instruments, Bitcoin and stabelcoins.

CBDC is an electronic obligation of the monetary regulator, denominated in the national currency. That is, it is fully centralised digital money, the circulation of which is controlled specifically by the central bank. CBDC is expected to be used on a par with traditional currencies as a means of payment, a measure of value and an instrument of capital preservation.

How will banking digital currencies change the world?

The ECB’s view of Bitcoin as a poor instrument for international payments is based on the fact that the main cryptocurrency is simply too volatile.

Since Bitcoin only settles about once every ten minutes, transaction valuation effects materialise already at the moment of settlement, making BTC payments actually more complex than traditional means.

Bitcoin’s throughput ranges from 1 to 5 transactions per second

However, the bank’s analysts somehow missed the fact of Lightning Network in their study altogether. Recall, it is designed just for instant settlements in the cryptocurrency network with minimal fees. However, Lightning Network is still at a relatively early stage of its development and will definitely not be able to meet the global demand for international transfers.

According to Cointelegraph, the ECB recognised CBDC as a more suitable instrument for cross-border payments. All due to its greater compatibility with currency conversion. The two main advantages noted in this context are the preservation of monetary sovereignty and the ease of instant payments through intermediaries like central banks.

Why analysts did not mention modern blockchains like Avalanche, Solana or Azero, which allow near-instant transfers for pennies, is unclear. Obviously, CBDC would not look like such a "good solution" against them.

Countries where CBDCs are experimenting or already creating their own


We think there's simply no way to be sure of anything in the cryptocurrency industry - and especially the timing of a major new phase of growth. There are a lot of newcomers in the coin niche who are not acting in the most rational way, which means that things can unfold in a completely unexpected way. So investors and traders traditionally need to be prepared for any outcome. After all, as recent events have shown, losing money can be completely unpredictable.


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