Can Bitcoin’s Price Skyrocket with Increased On-Chain Activity? Here’s A Closer Look
Bitcoin price enjoyed a decent rally in January after posting a choppy 2022 following high-profile collapses including Terra Luna UST and FTX crypto exchange. Having rejected $24k for the past five days, the Bitcoin price exchanged around $23k on Tuesday. However, the largest gains have been recorded in the small caps altcoins like Baby Doge Coin, which mostly signifies the end of a cycle.
Furthermore, money circulation in the crypto market is observed to move from large caps to small caps later. As such, on-chain intelligence firm Santiment has warned crypto traders to take extra caution with bear traps in the coming weeks.
Bitcoin On-Chain Spike Amid Price Correction
Ever since the Bitcoin Taproot was upgraded, the overall network’s security has increased exponentially with each successfully mined block. Moreover, Bitcoin miners overwhelmingly backed the Taproot upgrade, which has in turn seen block utilization spike to 100 percent according to on-chain analysts.
As Bitcoin nodes and miners increase around the world, the Taproot upgrade was designed to be more useful in identity masking in a regulated manner over time.
“Since taproot script spends can only be made from existing taproot outputs, inscriptions are made using a two-phase commit/reveal procedure,” an ordinals inscription notes.
According to research by on-chain research firm Glassnode, the Taproot adoption metric has risen to an ATH 7.47 per cent and Taproot Utilization to 2.84 per cent.
With a notable spike in on-chain activity, analysts are arguing if the underlying Bitcoin value will rally to $30k in the near future.