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Bitcoin Transactions Surprisingly Low Despite Recent Price Spike



Bitcoin has been fiercely bullish in recent months. The world's largest cryptocurrency by market cap recently hit $ 50,000, extending an impressive winning streak that has brought the cryptocurrency market closer to May's highs.

Nonetheless, on-chain data shows that the bitcoin network has not been processing many transactions per second even with the parabolic price spike.

BTC / USD chart by Tradingview

What decreasing Bitcoin transactions reveal about the state of the network

Researchers at Blockchain analytics platform Glassnode found that entity-adjusted Bitcoin transactions have not responded positively to the ongoing bullish momentum and are at “historically lows,” with the network recording between 175,000 and 200,000 transactions daily.

Furthermore, bitcoin transaction volumes are also depressingly low, as the network recorded approximately $ 18.8 billion in daily volume. This is 50% less than it was during BTC's May bull run, notes the report released by Glassnode on Monday. The volume of transactions is a strong fundamental sign of growth. It suggests that BTC is being used beyond mere speculation.

The analysis resource also indicated that this week there was an increase in older coins that had been inactive for around 20 weeks and began to be discarded. For crypto beginners, this could suggest that long-term holders are selling as prices stagnate.

However, Glassnode has pointed to another sign that favors the bulls. While older coins are being spent more and more, the amount of BTC in HODLers' wallets has increased. This week, the supply of long-term holders touched a new high of 12.69 million BTC.

This implies that bitcoin investors are not leaving in droves, as the spending is quite small in volume. This makes perfect sense given the low overall transaction volumes of the major cryptocurrencies.

In truth, Glassnode says that veterans spending their bitcoin holdings don't translate into a massive outflow. These are just investors taking the risk out of their positions and making some profit when the opportunity presents itself.


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