- Outflows for Bitcoin started to rise, giving HODLers hope.
- Miner revenues grew, easing the selling pressure on BTC.
Bitcoin’s [BTC] rally has had major impacts on the overall state of the crypto market. But many have started questioning whether this rally will sustain itself going forward.
State of the king coin
Some factors, however, can still help with BTC’s bullish dream. Notably, there’s a surge in BTC outflows.
This surge leads to a rise in transaction fees, which directly quantifies the demand on the network. Elevated fees in peak times signify users’ urgency to validate transactions, crucial data for both miners and investors.
The on-chain behavior of #Bitcoin reflects a cyclical pattern, often stimulated by exogenous events.
The heatmap visualizes various measures of behaviour overtime, highlighting how coins are mobilized in response to environmental stimuli, or anticipation of future stimuli
— NeuroInvest Research (@Neuro__Invest) December 1, 2023
The pronounced spikes in BTC outflows can have several significant impacts on the Bitcoin ecosystem.
Firstly, the increased transaction fees resulting from this surge reflect heightened demand on the network. This demand is indicative of high user activity as well.
One of the reasons for the rise in addresses could be the increasing interest in BTC ordinals. According to Dune Analytics’ data, the number of inscriptions for the Ordinals had also grown.
The rising interest in Ordinals will allow NFT investors to get into the Bitcoin network as well. This growing usage of BTC coupled with increased outflows may play a great role in supporting BTC’s current price.
How are miners doing?
For miners, the cycles of increased transaction fees during high-traffic periods become financially advantageous.
The combination of newly created coins and transaction fees serves as an incentive for miners to continue contributing computational power to the network.
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Over the last few weeks, the revenue collected by miners has grown. This may help ease selling pressure on these miners. This is because if miner revenue declines, miners are forced to sell their holdings, which ends up driving down Bitcoin’s price.
At press time BTC was trading at $38,777.65 and in the last 24 hours increased by 1.56%. The volume at which BTC was trading also grew. In the last few weeks, the volume at which BTC was trading rose from 8.39 billion to 19.27 billion.