Data from Glassnode shows that demand for the bitcoin network is slowly recovering recently, after experiencing months of steady declines.
The total amount of coins in the bitcoin mempool has increased during the last month.
As per the latest weekly report from glassnodeThe BTC network has been seeing a small, but steady increase in activity recently.
A “mempool” is a (virtual) place where bitcoin transactions are yet to be confirmed, waiting to be processed by miners.
When the size of the mempool is large, it means that there are many pending transactions on the network right now. This may indicate that the chain is currently witnessing high activity.
One indicator from Glassnode is the “total amount of mempool coins”, which measures how much BTC is inside the mempool at the moment.
An increase in this metric may suggest that there are currently larger transactions and/or a greater number of them taking place on the bitcoin blockchain.
Now, here is a chart that shows the trend of the total amount of BTC Mempool coins over the past twelve months:
Looks like the value of the metric has been on the up in recent days | Source: Glassnode's The Week Onchain - Week 45, 2022
As you can see in the graph above, the total amount of coins in the bitcoin mempool was on a steady decline for most of the past year.
This means that as the bear market took hold, on-chain activity began to wane and fewer investors became interested in crypto trading.
There were still some spikes above normal in this period of decline, where the mempool became congested. These bursts coincide with great capitulation in price. Nonetheless, these were only temporary elevations, and the metric returned to normal in no time.
However, the trend has changed over the past month. During this period, the indicator has seen a continuous uptrend, which means that a greater amount of coins are now being moved on the chain.
Glassnode noted that this could be an early indication that a potentially constructive turnaround in demand for bitcoin is currently taking place.
And if so, this trend could prove to be a positive for the price of the crypto in the long term, as high demand is key to driving the market.
At the time of writing, bitcoin is priced around $19.7k, down 4% over the past week.
BTC has plunged down over the past day | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com