Prominent crypto analytics firm Santiment is warning that many on-chain metrics for Bitcoin (BTC) should give reason for bulls to remain cautious.

In a new blog post, Santiment says that Bitcoin’s network isn’t showing the same parabolic growth that it did in the bull market of 2021.

The firm says that bull traps occur when prices are rising quickly, but utility is not, which they say is what happened in Q1 of this year.

Santiment takes a look at the amount of activity of unique Bitcoin addresses on the world’s leading blockchain. The firm says Bitcoin doesn’t have the same growth in addresses as it did in the last bull market.

“Unlike trading volume, the amount of unique addresses interacting on the BTC network has at least edged up very mildly. Nevertheless, in previous bull runs, such as the most recent throughout 2020 and 2021, Bitcoin’s amount of unique addresses went up considerably more than it is now. Since the beginning of 2023, active addresses have risen +11% while BTC’s price has jumped +65%.”

Santiment also looks at Bitcoin’s circulation metric, or the amount of coins moving around each day, and says that the metric is currently less bullish now than it was at the start of the year when BTC was near $16,000.

“The amount of individual tokens being moved per day hasn’t been looking as hot as the metric’s cousin, address activity. After a temporary rise in mid-March just as markets were bottoming, circulation fell back down. So much so that unique tokens moving per day (based on a 30-day rolling average) is -6.4% compared to where it was on January 1st, when Bitcoin’s price was sitting at just $16.7k.”

The analytics firm says that while it’s possible for Bitcoin to make a comeback, BTC bulls should still keep an eye on the on-chain metrics to see if they show signs of improving.

“Although these divergences are not impossible to overcome, they greatly limit the likelihood of the network continuing to successfully return back to its prosperous levels we were seeing BTC and all of crypto enjoying in October and November of 2021.

There are still other vital on-chain signals to be paying attention to, such as whale activity and MVRV (market-value-to-realized-value), which we touch on consistently in many of our other articles. But as far as foundational metrics that have historically been reliable, you should certainly be rooting for on-chain utility conditions to improve if you’re bullish on the crypto markets right now.”