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Posted:
- Bitcoin’s transfer volume was only 25% higher than the cycle low.
- The monthly average of new addresses was significantly lower than the annual average.
Once a hive of intense activity, Bitcoin [BTC] blockchain has become noticeably quieter in 2023.
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As evidenced by a recent post by Glass junction on August 8, the total transfer volume, i.e. the total number of coins transferred on-chain, was $2.63 billion/day, almost 80% less than the peak reached during the 2021 bull market.
Source: Glassnode
In fact, the aforementioned value was only $600 million, or 25% higher than the cycle low of $1.97 billion recorded during the historically low volatility period in early 2023.
The adoption of networks is decreasing
Skepticism about the security of centralized exchanges, along with optimism about the long-term potential of the king coin, have revived demand for restraint. That’s why HODLing instead of trading has been the norm lately.
The hallmark of healthy network adoption is an increase in the number of daily active users. A Glassnode chart, intended to identify broader trends in this area, revealed some disappointing developments.
As you can see, the monthly average of new addresses entering the Bitcoin blockchain was significantly lower than the annual average. This indicated a contraction in on-chain activity and less network usage.
Source: Sentiment
The number of transactions is increasing
Another important indicator to assess network demand was transaction throughput. Interestingly, the number of transactions on the Bitcoin chain has increased in 2023, with May witnessing record traffic.
Although lower than May’s peaks, the daily numbers were still promising. On September 8, more than 483,000 transactions were processed on the network.
Source: Glassnode
Whales swim away from the network
However, transactions independently of each other did not show the full picture. Although the number of transactions did indeed increase, transfer volumes were low, as previously highlighted. This suggested that the increase was driven by low-value transactions executed by investors holding smaller amounts of BTC.
According to CryptoQuant, the share of whales on September 8 was only 39% of the total inflows on the exchanges. In fact, the Exchange Whale Ratio indicator has dropped significantly from previous years.
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The lower interaction between whales and exchanges meant fewer high-quality deals and, as a result, lower transfer volumes.
Source: CryptoQuant
At the time of writing, Bitcoin lost 1.23% of its value in the 24-hour period to settle at 25,870 per day. CoinMarketCap. The market mood was neutral according to the latest update of the Bitcoin Fear and Greed Index.
Bitcoin Fear and Greed Index is 41 – Neutral
Current price: $25,905 pic.twitter.com/q0lKYwzIfg— Bitcoin Fear and Greed Index (@BitcoinFear) September 9, 2023