Bitcoin Network Is Growing, Albeit Political and Economic Uncertainty

With the current political turmoil in Europe and the inverted yield curve, it is indeed challenging to define the short-term trend of Bitcoin – so, there could be volatility in the price action associated with the looming crisis. Meanwhile, the miners’ position index (MPI) has surged recently, indicating the possibility of miners’ selling pressure.

MPI initiated rising as miners’ selling pressure

The foremost factor affecting MPI is the total amount of coins sent from the affiliated miners’ wallets, as MPI equals the ratio of total miner outflow (USD) to its one-year moving average of total miner outflow (USD). In particular, the approximation of 6,800 BTC transferred out of F2Pool currently is as of the catalyst.

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Selling pressure from F2Pool outflow

However, ‘fee total’  the sum of all fees that are paid to coin miners remains fairly low while the hash rate has risen since the dip of July 2021. It means that despite the low fee miners received, the mining process has been in the competition.

Miners engage in mining – albeit low fees

One of the common facets of on-chain analysis is to examine whether transactions are actively executed through exchanges or OTC (over-the-counter) desks. As shown in the following picture, the exchanges inflow transaction count is relatively low, saying that sellers are not interested in trading their Bitcoin on exchanges.

The exchange’s inflow transactions count trending lower

In the meantime, the fund flow ratio – the ratio of coins transfers involving the exchange to the overall coins transfers network-wide – remains low, while the total token transferred on the network is volatile. Hence, there could highly be OTC deals in speculation. This is a good sign because some may be purchasing BTC corresponding to the recent drop in Bitcoin’s price.

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Low fund flow ratio and huge tokens transferred – speculative OTC deals

Additionally, the number of active addresses of receivers is relatively larger than that of senders, indicative of the possibility of more individual addresses purchasing Bitcoin.

The number of active addresses sending and receiving has increased – and more receivers than senders

Furthermore, the number of active addresses has been moving up since the bottom of July 2021. By applying Metcalf’s Law, where the value of a communications network is proportional to the square of the number of its users – the current intrinsic value of Bitcoin is increasing in terms of decentralization as it is proportionate to the square of the number of active addresses. This can be deemed a good sign for the long term as Bitcoin has attracted public interest.

BTC total active addresses trending up since July 2021

Therefore, the Bitcoin network is growing steadily, even though there is some political and economic uncertainty.


Dang Quan Vuong is a trader and market analyst at King Stock Capital Management and on-chain analyst at CryptoQuant and Santiment Vietnam.


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