Bitcoin's On-Chain Data Is Slowing Down Resulting In Sluggish Price Movement

Bitcoin's on-chain activity has dwindled to near-historic lows, marking a stark contrast to the bustling activity witnessed during its recent all-time high. Insights from Santiment, a data analytics firm, underscore this trend, revealing a significant slowdown in transactions on the Bitcoin network over the past couple of months.

Source: tr.cryptonews.com

In the May 11 update, Santiment highlighted a notable decline in various on-chain metrics, including transaction volume, daily active addresses, and whale transaction count. Transaction volumes are nearing their lowest levels in a decade, while daily active addresses have dipped to levels last seen in January 2019. Moreover, whale transactions, typically exceeding $100,000 in value, have slowed considerably, echoing levels from December 2018.

While the slump in on-chain activity may raise concerns, analysts at Santiment suggest it may not directly translate to impending BTC price drops. They attribute this decline to "crowd fear and indecision" among traders, underscoring the intricate relationship between on-chain activity and market sentiment.

Despite these challenges, Bitcoin's price has remained relatively stable, hovering slightly above $61,000 at the time of writing, with a marginal 0.1% increase in the past day. However, over the past week, Bitcoin experienced a 4.6% decline, underperforming the broader crypto market, which recorded a 4.2% drop, according to data. As investors navigate this period of consolidation and subdued on-chain activity, market sentiment and broader economic factors are poised to play a crucial role in shaping Bitcoin's trajectory in the weeks ahead.

The Runes Protocol Enhances Bitcoin's Privacy And Scalability

Data from the analytics dashboard, the Runes protocol on Bitcoin generated $135 million in transaction fees, making it the largest blockchain for the cryptocurrency. Tokens issued under the standard garnered over 2,100 BTC in costs within a week following the halving. However, activity has since slowed, with Friday, May 10, marking the lowest level of activity on the Runes protocol.

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.