August 16, 2022

In the past few days, some of the leading cryptocurrencies, such as Bitcoin and Ethereum, have shown an upward trend in prices. Some associate the reversal in value with the President of the United States and the Fed’s recent outburst of events.

However, Glassnode has a different opinion. The blockchain analytics firm believes that the fundamental change in price value is not real but just a bull trap.

After a few months into the crypto winter, Bitcoin is finally starting to take a gradual upward move. The largest global crypto asset by market capitalization has surpassed $24,500.

This positive change in BTC price came after the US Federal Reserve increased interest rates by 75 points. The country also recorded negative GDP in a row in the last quarter of the year. But then, US President Joe Biden has yet to admit to sinking into recession.

Despite the price rally of the past days, BTC suddenly turned bullish earlier today, August 3. After that, the coin crawled below the $23,000 level. According to Glassnode’s State of the Market Report, this BTC price drop is due to a drop in network usage.

as explained glass In a fake upside, current network activity speaks differently. There is only a small influx of new demand for the token even though periods of notable capitulation events have given it a short boost.

In addition, the analytics company used network fee status to establish its standing. Normally, there should be a significant increase as more users interact with the more influential blockchain, as evidenced by bull markets.

Likewise, the opposite should be the case in bear markets. But Glassnode noted that such a dismissal of an event with a rise in fees would not occur.

Show similar trend in Ethereum and Bitcoin fees

With its recent performance, Bitcoin is not the only major crypto asset that is not showing a spike in fees. Also, Ethereum appears to be following the same trend.

Glassnode Report Shows Previous Bitcoin Boom Was a Bull Trap
Bitcoin is currently trading sideways on the daily candle | source: BTCUSDT on TradingView

According to on-chain data, the world’s second largest blockchain has significantly reduced gas fees paid. As a result, it is now averaging less than $5, indicating multi-month lows.

Ethereum tends to become an inflationary digital asset as more issuances accumulate while lower fees are eliminated. The drop is always caused by decreased activities and transactions on the network.

Also, the implementation of the EIP-1559 that came last year with the London fork appears to be slowing in performance. It can’t burn enough Ether (ETH) due to a drop in network usage.

The ETH community has not given up all hope. On the contrary, you expect a positive shift that will follow the launch of the merger in the coming months.

Featured image from Pexels, charts from

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