Bullish! Bitcoin’s Network Volume Has Stabilized in Balance Zone

An analyst from the market intelligence firm CryptoQuant has identified a bullish sign for bitcoin’s (BTC) price movements in the coming weeks.

In a report, Axel Adler Jr. revealed that Bitcoin’s network volume has stabilized in the balance zone. Considering historical data during past cycles, Bitcoin’s network volume stabilizing in the balance zone is a bullish sign for the asset’s price.

Bitcoin’s Network Volume Enters Balance Zone

According to the analyst, Bitcoin’s 30-day moving average network transfer volume spiked to $67 billion when BTC reached the $110,000 level. However, amid the ongoing consolidation phase, the volume has declined to $58.7 billion.

Average transfer volumes, which hover above the upper boundary of $80 billion, often coincide with local peaks around $70,000 and $100,000, as indicated by historical data. On the contrary, volumes around the lower boundary, which is $40 billion, are accompanied by temporarily weakened activity. However, on-chain activity soon starts to surge again as network participants resume accumulating BTC.

Since January 2024, the average transfer volume has remained within the $40 billion to $80 billion range, indicating a balance in network activity and the level of capital coming from market participants.

At the volume’s current level, which is the midpoint of the range, AxelAdlerJr believes the market is in a state of stable equilibrium. This aligns with a consolidation phase preceding a decisive price movement, as previously seen during the last bull run in mid-2021.

Market in Stable Condition

Axel Adler Jr. insists that as long as the average volume remains above the $40 billion level, the market can boast of a stable fundamental condition. When the indicator starts rising above $80 billion, that would signal a fresh capital inflow and strengthening activity, possibly indicating a market top.

Conversely, a sustained decline below $40 billion will signal diminishing network demand and possibly the onset of a deeper correction.

Notably, the metric’s current state suggests that BTC still has more room for growth. Market experts say the bull run still has another leg to go before the bear market returns, and the average transfer volume somewhat confirms that prediction.

Meanwhile, BTC has been trading sideways for days, hovering between $100,000 and $110,000. At the time of writing, the asset was worth $105,870, showing no substantial gains or losses within the last 24 hours. BTC has maintained the same momentum for the past week and month.

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