Bitcoin Stuck Near $105,000, But Network Activity Lights Up

On-chain data shows network activity metrics related to Bitcoin have shot up while the coin’s price has been ranging around $105,000.

Bitcoin Network Growth & Circulation Have Both Spiked Recently

According to data from the on-chain analytics firm Santiment, Bitcoin has observed a notable uptick in activity during the past week. There are two indicators of relevance here: Circulation and Network Growth.

The Circulation keeps track of the total amount of unique tokens that became involved in transaction activity over a given period. In the context of the current topic, the period is one day. By ‘unique,’ what’s meant here is that the indicator only counts each active coin once, regardless of how many times it was used in transfers during the window. This means that if a coin was transacted five times during a day, it still contributes just one unit toward the metric.

This is unlike the transaction volume, which simply measures the total network activity by adding up all kinds of transfers, whether they involve repeat tokens or not. As such, the Circulation can provide a better look into the ‘organic’ activity occurring on the blockchain.

Now, here is a chart that shows the trend in the Bitcoin Circulation over the last few months:

As is visible in the above graph, the Bitcoin Circulation has seen a sharp spike recently, suggesting the blockchain has seen a surge in transaction activity. At the peak of this spike, the metric hit a value of 241,360 coins, the highest level since early December.

From the chart, it’s also apparent that the other indicator of interest, the Network Growth, also registered a large spike in the past week. This metric measures the total number of addresses that are coming online on the network for the first time. That is, the wallets that are becoming involved in their very first transaction.

New addresses are created on the blockchain for various reasons, such as existing users generating new ones for privacy purposes or to distribute their holdings. Usually, though, a factor that stays relevant whenever the Network Growth spikes is adoption. As such, the recent spike in the indicator, which saw the generation of 556,830 new Bitcoin addresses, could indicate that some new investors have joined the space.

“Growth in a network’s on-chain activity is generally a good sign,” notes the analytics firm. “This is something to keep an eye on as crypto markets range.”