Bitcoin, the premier cryptocurrency, has been experiencing a period of consolidation in terms of price since reaching a new all-time high in mid-March. This lackluster price action has raised concerns among investors, particularly with the recent loss of support at the $60,000 level. However, the slowdown is not limited to just the price of Bitcoin – on-chain activity on the Bitcoin network has also been on the decline over the past few months.
Data analytics firm Santiment recently published a report highlighting the diminishing on-chain activity on the Bitcoin network. Various key metrics, such as transaction volume, daily active addresses, and whale transaction count, have been trending downwards. According to Santiment, investor transactions with BTC have decreased significantly since the cryptocurrency’s recent all-time high, leading to a drop in on-chain activity to levels not seen since 2019.
One of the standout metrics revealed by Santiment is the decline in transaction volume on the Bitcoin network. Transaction volume, which measures the total amount of coins transacted within a specific timeframe, has plummeted to its lowest levels in the past decade. This decrease in transaction volume indicates a reduction in trading activity and overall interest in Bitcoin transactions.
Another concerning trend highlighted by Santiment is the decrease in the number of daily active addresses on the Bitcoin network. Daily active addresses measure the distinct addresses that participate in BTC transactions on any given day. The data shows that this metric has dropped to its lowest point since January 2019, emphasizing a decline in user engagement and participation on the Bitcoin network.
Santiment’s report also touched on the slowdown in whale activity on the Bitcoin network. Whale transactions, which involve amounts greater than $100,000, have declined to levels not seen since the end of 2018. This reduction in whale transactions indicates a lack of significant movement or large-scale trades within the Bitcoin ecosystem.
While the decrease in on-chain activity may seem alarming at first glance, Santiment suggests that it may not directly correlate with imminent price dips in Bitcoin. The analytics company attributes the decline to “crowd fear and indecision” among traders, highlighting the connection between on-chain activity and market sentiment. Despite the sluggish on-chain metrics, the price of Bitcoin has remained relatively stable, sitting just above $60,770 at the time of writing.
The decline in Bitcoin’s on-chain activity raises questions about the overall health and engagement of the cryptocurrency network. Investors and analysts will be closely monitoring these metrics to gauge market sentiment and potential future price movements in the volatile world of cryptocurrency trading.