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On-chain data shows the Bitcoin transaction count has plunged to the lowest level since October 2023. Here’s what this could mean for BTC’s price.
Bitcoin Transactions Have Seen A Significant Slowdown Recently
As pointed out by CryptoQuant author IT Tech in a new post on X, the BTC transfer activity has dropped to relatively low levels recently. The on-chain indicator of relevance here is the “Number of Transactions” from the market intelligence platform IntoTheBlock, which measures, as its name suggests, the daily number of moves that addresses across the network are making.
Now, here is the chart shared by the analyst, that shows the trend in its value over the last few years:
As displayed in the above graph, the Number of Transactions has seen a large drop for Bitcoin recently, suggesting that investors are making much fewer moves on the blockchain now.
Generally, a drop in network transaction activity is a sign that the traders are losing interest in the cryptocurrency. Any notable move in the price is only sustainable when a large number of investors are providing the fuel to support it, so it can be hard for BTC to mount up a rally when the Number of Transactions declines to a low level.
From the chart, it’s visible that the investors were making a high number of moves in the lead-up to the Bitcoin price rally beyond $100,000. But interestingly, the indicator plunged before the price peak arrived, implying that signs of the rally not having too much time left may have already been there from an on-chain perspective.
Recently, the Number of Transactions briefly saw a crash to a level that it hasn’t touched since October 2023. Back then, the low transfer count didn’t last for too long and was in fact followed up by a burst of activity that accompanied a price rally.
It’s possible that something similar could happen this time as well, but one key difference between then and now is that the recent downturn in the indicator has been more prolonged. Naturally, if things are indeed going to be different this time, then a lasting lack of interest from the investors could be a bad sign for the bulls.
That said, an indicator that may provide for an argument against a shift away from a bull market is the Cycle Extreme shared by Axel Adler Jr, another CryptoQuant author.
“Cycle Extreme identifies the extreme points of price cycles,” explains the analyst. The indicator makes use of various popular Bitcoin on-chain indicators like the MVRV Ratio and SOPR to determine this.
As is apparent from the graph, the indicator has often been reliable for pointing out inflection points in Bitcoin. “At the moment, this metric does not give any clear signals,” notes Adler Jr.
BTC Price
At the time of writing, Bitcoin is trading around $83,600, up almost 1% in the last week.
Featured image from Dall-E, CryptoQuant.com, IntoTheBlock.com, chart from TradingView.com
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
