Bitcoin, Wallets at 2-Year Low Despite Price Surge...Projections Clash: "$250,000" vs. "Plunge Again"

▲ Bitcoin (BTC)/ChatGPT Generated Image

Bitcoin (BTC) has recovered to $80,000 for the first time in three months, but conflicting interpretations of on-chain metrics are fueling a growing debate over the market's direction.

Be[In]Crypto reported on May 5 (local time) that despite Bitcoin surpassing $80,000, analysts are divided on whether this rally signals a resumption of the bull market or merely a rebound before further declines. Key issues include network participation, profit-taking trends, and spot market supply and demand.

Santiment stated that Bitcoin's daily active wallet count remains around 531,000, and new wallet creation is approximately 203,000. Both metrics are at a two-year low. Despite Bitcoin's 22% increase over the past five weeks, network participation has not kept pace. Santiment assessed that if price increases occur without expanded on-chain participation, the upward momentum could be fragile.

However, there is also a perspective that interprets the same metrics in the opposite way. Santiment suggested that the situation where network activity has reached a two-year low could actually signify the end of an indifference phase. It explained that in the past, bottoms in activity levels have acted not as extensions of further declines, but as compression periods before larger rallies.

Michael Nadeau, founder of The DeFi Report, pointed out warning signs in the spot market. He stated that Bitcoin's spot trading volume delta turned positive for the second time in this bear market. This means buyers have started acting more aggressively than sellers in the spot market, but he explained that in past bear markets, strong corrections often followed this signal.

Conversely, bullish arguments are also strong. Santiment reported that a net realized profit of $207.56 million occurred recently, which was the largest surge in profit-taking on a monthly basis. Generally, if the market absorbs large-scale profit-taking during a price increase, it can be interpreted that the upward trend may continue.

Darkfost presented the low selling pressure from short-term holders as a bullish argument. The inflow of short-term holders into profit was approximately 13,000 BTC, and the weekly inflow of short-term holders on Binance was 36,500 BTC, which is a low level for this cycle. The reduction in selling pressure, even without strong demand confirmed, was evaluated as a factor increasing Bitcoin's likelihood of holding above $80,000.

In the long-term outlook, Plan C presented a larger upside scenario. He maintained the view of a Bitcoin supercycle that began at the $16,000 low in November 2022, forecasting a peak potential of over $250,000 between late 2027 and early 2028.

Bitcoin's recovery to $80,000 has left the market with a greater debate rather than a clear conclusion. While sluggish network activity exposes the rally's fragility, low participation and limited selling pressure are also interpreted as compression signals before a major upswing. Be[In]Crypto reported that the current $80,000 range is a critical test where projections for continued bullishness and further declines are directly clashing.

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