According to Lucas Outumuro, head of research at crypto analytics firm IntoTheBlock, some on-chain indicators suggest that the current downtrend of the cryptocurrency market may not be as brutal as past bear markets. On the other hand, Outumuro admits in his analysis that “it is getting harder and harder to argue that we are not in a bear market.”
Lucas Outumuro stated that the total value of the cryptocurrency market has dropped 57 percent from its all-time high of approximately $3.07 trillion in November 2021, and that the key indicators have lost less than the previous bear markets:
“Since a high portion of demand comes from speculation, it is normal for transaction fees to drop drastically as trading sentiment wanes in bear markets. However, staying higher indicates more demand. Bitcoin priced at $130,000 daily in May of this year compared to $130,000 in May 2018. Transaction fees have averaged over $500,000. Ethereum and other cryptocurrencies reflect the same pattern, with less marked declines in on-chain activity than previous bear markets.”
According to the researcher, both Bitcoin (BTC) and Ethereum (ETH) show consistent progress in development activity despite the apparent downtrend in recent months:
“Developments to the Bitcoin network, developer efforts are constantly increasing and have increased by over 50 percent in the last two years. This is one of the few leading indicators for growth in cryptocurrencies where it is an open source ecosystem and reliance on developers globally contributing to the continuous improvement of these networks. reveals.”
"Dead Cat Leap"
Bitcoin managed to reach the level of $32,000 last week. However, experts said it was a "dead cat bounce" and the recovery was temporary. Analysts, evaluating the macroeconomic conditions, suggested that the bear market may continue. May has been a nightmare for the cryptocurrency market. The price of the leading cryptocurrency fell by about 30% in May. BTC's dominance dropped to 46%. Bloomberg senior commodity strategist Mike Mcglone reported that Bitcoin is at a crossroads. According to the analyst, BTC could move in either direction from this level.