Assessing Bitcoin’s [BTC] state as Ordinals hit a new record

• Ordinals’ block size decreased as the text type of ordinals grabbed the largest share of total inscriptions.
• BTC’s price might witness a correction soon, as suggested by a few metrics. 

Bitcoin [BTC] Ordinals again made it to the limelight by registering massive growth in terms of the number of inscriptions. Daily inscriptions reached an all-time high of more than 300,000 on 1 May, pushing the total number of inscriptions to over 3 million. 

Source: Dune

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key stats look encouraging

A look at the share of different types of Ordinals inscribed suggested that the majority of them were text type, which accounted for 79%. As per Dune’s data, text type Ordinals were followed by image type and others.

Additionally, the increase in number of inscriptions was also accompanied by a massive surge in Ordinals fees paid, which also reached a new ATH on 2 May 2023. 

Source: Dune

Tom Wan, a research analyst, pointed out an interesting development. Despite the massive increase in the number of inscriptions, the average block size decreased.

6/ Block Size Decreases with Text Type Ordinals Dominating

Despite hitting ATH in daily inscriptions, the average block size decreases from an ATH (2.52MB on 12 Feb) to 1.57MB

Major Cause: Size of Image Inscriptions > Text Inscriptions by ~ 7 times pic.twitter.com/g7EtW64dq2

— Tom Wan (@tomwanhh) May 2, 2023

The reason behind this decline was the dominance of text type Ordinals. As text type Ordinals’ size is less than that of image-type Ordinals, the average block size declined from its ATH of 2.5 MB to 1.57 MB.

Miners enjoyed the episode

Ordinals’ latest achievement also brought good news for miners. While Ordinals hit a new ATH, a hike in BTC’s hashrate was also seen, suggesting an influx of new miners in the network.

Moreover, thanks to the increase in fees of Ordinals, miners also generated more revenue. As evident from Glassnode’s chart, miners’ total revenue in BTC registered a spike on 1 May, 2023.

Source: Glassnode

Bitcoin investors should consider this

Though things looked good for the miners, the same can’t be said for investors. A look at BTC’s hash ribbon displayed the possibility of the 60-day moving average (MA) flipping the 30-day MA.

Such a flip suggests that the market is not appropriate for more accumulation. Therefore, if the flip happens, BTC might be subjected to a price correction. 

Source: Glassnode

Read Bitcoin’s [BTC] Price Prediction 2023-24

The trouble is for real

CryptoQuant’s data revealed that at the time of writing, Bitcoin’s exchange reserve was increasing, suggesting higher selling pressure. The increased sell pressure was also proven by BTC’s red aSORP, which indicated that more investors were selling at a profit.

In addition to that, BTC’s taker buy/sell ratio pointed out that selling sentiment was dominant in the derivatives market, which was also a negative signal. According to CoinMarketCap, Bitcoin’s price increased by nearly 2% in the last 24 hours and at press time, it was trading at $28,481.10 with a market capitalization of over $551 billion.

Source: CryptoQuant