Bitcoin Trading Slows as On-Chain Activity Nears Historical Lows
Over the last two months, Bitcoin’s on-chain activity has approached historical lows as transaction volumes have noticeably decreased.
This cooling came after Bitcoin’s all-time high at the beginning of the year, and rather than a harbinger of further price declines, it became a period headline about the fear and indecision of the crowd.
Bitcoin’s On-Chain Activity Is Dropping
According to Santiment data, Bitcoin’s on-chain transaction volume has fallen and reached figures last seen years ago (since 2019). This pattern suggests that investors are reluctant to roll over their positions, possibly due to market volatility.
The sharp decline in activity comes after Bitcoin retraced its all-time high in March 2024; This was a milestone that was one year ahead of schedule, based on historical halving cycles.
Market Reaction and Analysis
The sharp decline in trading volume did not escape the attention of market analysts. As reported by Coingape, Bitcoin tested the $60,000 support on May 10 after a very short journey to $63,500.
Additionally, investors on platforms like X (formerly Twitter) suggest that institutional players may be manipulating the market to prevent significant breakouts on weekends when the ETF market is closed.
Trader and analyst Rekt Capital highlighted that Bitcoin usually takes a hit weeks after the halving event, calling this range the “danger zone.” This phase of the price decline, which is now about to end, saw the Bitcoin price drop to $56,500. However, long-term holders (LTH) are not selling their assets, which could indicate a possible recovery.
Price Performance and Economic Impacts
Bitcoin’s price performance has been volatile as the cryptocurrency failed to sustain its move above $63,000. Bearish indicators from stagflationary economic data in the US and hawkish statements from Federal Reserve officials also weakened the upward trend.
In particular, the University of Michigan Consumer Sentiment Survey revealed a significant decline from 77.2 in April to 67.4 in May, while the rise in inflation expectations increased the market’s concerns.
Price volatility shares Bitcoin’s historical pattern, where post-halving periods often see major corrections. But this year’s price trajectory is far from the usual four-year cycle, meaning the new high could be reached relatively quickly.
Long-Term Owners Maintain Confidence
Even though the Bitcoin price has fallen in recent months, long-term Bitcoin holders are still bullish. According to CryptoQuant’s data, these holders still have not sold their holdings after the $73,000 peak. By the way, at press time. Bitcoin (BTC) bulls were still fighting for market control despite the broader market sell-off that dropped the price to an intraday low of $60,492.63. BTC, traded at $60,908.99, was at 0.10% from its intraday high.
On the contrary, long-term investors seem to be waiting for a possible revival, according to Coingape. On-chain analyst Axel Adler Jr noted that long-term holders previously sold 1.3 million BTC at the peak but are now holding on to their holdings in anticipation of a local bottom.
Such an action demonstrates strong belief in the long-term value of Bitcoin, in contrast to the actions of short-term holders who are seen participating in a number of for-profit activities. Now the market is looking at key economic data and upcoming events, which include PPI and CPI reports as well as a speech by Fex chairman Jerome Powell that could affect the course of Bitcoin in the coming weeks.
So read:
✓ Share:
Kelvin is a distinguished author specializing in crypto and finance, with a bachelor’s degree in Actuarial Science. Known for her sharp analysis and insightful content, she is fluent in English and specializes in comprehensive research and on-time delivery.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
#Bitcoin #Trading #Slows #OnChain #Activity #Nears #Historical #Lows