"Despite the apparent positivity, I believe this type of rally warrants significant caution, as it may lack the solid foundation required for sustained medium-term continuation."
"On the other hand, blockchain data reveals a completely different picture, with network activity declining to its lowest levels in two years—a signal that cannot be ignored."
"This divergence between rising prices and weakening activity represents a clear warning sign, as healthy rallies are typically supported by increasing user engagement and transaction growth."
Bitcoin is trading above $81,000, bolstered by institutional inflows. However, this price increase raises concerns about its sustainability due to a divergence between price and fundamentals. Institutional capital flows are dominating, overshadowing traditional metrics. While strong inflows into exchange-traded funds indicate confidence, this demand is selective and may shift quickly. Blockchain data shows declining network activity, suggesting a lack of organic growth. This divergence signals potential risks, as healthy price rallies typically require increasing user engagement and transaction growth.
Read at London Business News | Londonlovesbusiness.com
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