Bitcoin On-Chain Activity Turns Green, Will Price Action Follow?

Bitcoin on-chain activity has once again turned green signaling some good tidings for the digital asset. All across the board, metrics have been on the rise with some reaching as high as double-digital increases in the past week alone. The recovery has ranged from daily miner revenues to revenues gained from fees, as well as the block production rate per hour. It is a welcome change after the last two weeks of stagnating on-chain activity.

Bitcoin Metrics Are Green

There had been some significant drop in the on-chain activity for the last two weeks alone. This had been concerning given that bitcoin’s on-chain activity had been on the rise prior to this. However, last week proved that the cryptocurrency is just as able to recover quickly as it is to decline.

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Daily miner revenues were up 5.88% for the past seven days. This had seen revenues grow from $37,202,998 in the second week of April to $39.390,213 for the third week of the month. This also coincided with the increase in the average fees per day recorded over the same time period. It had grown from $362,733 to $391,510, representing a 7.93% change in the space of a week.

Despite this increase in fees per day, fees only made up about 1% of all miner revenues, meaning that revenue from fees is now nearing an all-time low on a historical basis. 

Bitcoin hashrate recovers | Source: Arcane Research

Block production was also on the rise. The target block production rate had been 6 blocks per hour but it had been quickly surpassed as it grew to an average of 6.45 blocks per hour. This would mean that for the block production rate to go back to normal, mining difficulty will need to be adjusted by about 5%, which is expected to happen on Wednesday.

Daily transaction volume had recorded the largest recovery going into the double digits. The growth had come out to a 10.99% change in a 7-day period. Miners were also able to fit in more transactions per block due to the increased block production rate, which contributed to the growth in transaction volume.

Will Price Move With It?

The issue of price movements will always be present and with on-chain metrics turning green, it can easily impact the price of the digital asset. The question becomes whether the movement would be a positive or a negative one.

BTC starts another recovery trend | Source: BTCUSD on TradingView.com

Historically, when on-chain activity had recovered back into the green, the price of bitcoin has been known to recover along with it. This can usually be tied to the increased usage of the network, leading to higher prices.

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This is already the case as the price of bitcoin has already begun to recover from its Tuesday lows. The $36k-$38k support level had held up quite nicely and in the early hours of Wednesday, the price of BTC is now trading above $39,000. If on-chain activity continues to grow, then bitcoin may well be above $40,000 before the end of the week.

Featured image from Coincu News, charts from Arcane Research and TradingView.com