- The number of daily transactions fell by 35% compared to the previous month.
- Of the total inflow to the exchanges, whales accounted for only 32% on June 14.
Hostile US regulations continued to test the resilience of the crypto market. The fallout from the back-to-back legal charges against juggernauts, Binance and Coinbase lingered for the second week in a row as on-chain activity on the Bitcoin [BTC] network cannot be retrieved.
Are your BTC holdings flashing green? Check the profit calculator
Blockchain analytics company data Glasnode stressed that the total transfer volume, i.e. the total number of coins transferred on-chain, hovered around USD 2.85 billion per day, similar to the levels observed at the end of 2020.
What is notable is that, unlike the post-FTX period, when volumes increased, the new crisis has significantly removed investors from exchanges. Skepticism surrounding the future of centralized exchanges has revived demand for self-custody, with hodling rather than trading the norm, at least for now.
Source: Glassnode
Transactions see sharp decline
The recent slowdown in Bitcoin’s on-chain activity is in stark contrast to the network outage phase in May, which resulted in a huge backlog of unconfirmed transactions. Due to the combined effect of declining volatility and the FUD around centralized exchanges, the number of transactions has been down since then.
At the time of writing, the number of transactions was 380,180. This represented a 35% drop from the previous month, according to data from Glassnode.
Source: Glassnode
Whales are silent
However, transactions independent of each other do not reflect the true picture. While the number of transactions did indeed increase in May, the transfer volume was relatively lower. This suggested that the increase was driven by low-value trades made by investors holding smaller amounts of BTC.
Major addresses that hold a large portion of the BTC supply sit still, unfazed by market dynamics. According to CryptoQuant, whales’ share of the total inflow to the exchanges was only 32%.
This proved that high-value transactions were lacking on the network due to the absence of whales.
Source: CryptoQuant
Read Bitcoin [BTC] Price Forecast 2023-24
At the time of writing, BTC was trading in the red with a 24-hour drop of 3.58%. The decline took it below $25,000 per share for the first time since mid-March CoinMarketCap.
Interestingly, the pullback came despite that of the US Federal Reserve decision for the first time in more than a year not to go ahead with a rate hike.