Analyst Observes Lack of Desire to Sell BTC as Bitcoin’s On-Chain Activity Slows

Analyst Observes Lack of Desire to Sell BTC as Bitcoin’s On-Chain Activity Slows

  • The dollar value of average on-chain transfers on the Bitcoin blockchain remains well below the 2021 peak, according to data tracked by Glassnode.

  • This is a sign that investors are holding onto their coin stash in anticipation of higher prices, Blockware Solutions analysts said.

Bitcoin {{BTC}} price recently hit new record highs above $70,000. Yet real economic activity on the Bitcoin blockchain limps forward, not sprints.

This divergence partly reflects a strong holding sentiment in the market, according to a research firm.

“Average on-chain transfer volume (denominated in USD) is well below the 2021 bull market peak. Almost no value is being moved on-chain,” Blockware Solutions analysts said in the latest edition of the Blockware newsletter Intelligence. “No one wants to sell.”

Data tracking company Glassnode defines transfer volume as the US dollar value of the total BTC transferred on-chain. The metric only takes into account successful transfers.

Analyst Observes Lack of Desire to Sell BTC as Bitcoin’s On-Chain Activity Slows

The dollar value of average transfer volume remains well below the highs seen in 2021. (Glassnode)

As of press time, the seven- and 14-day average transfer volume was less than $200,000, a far cry from the $1 million-plus during the 2021 bull market, according to data tracked by Glassnode.

The embrace of Wall Street spot bitcoin ETFs listed on Nasdaq was the main reason for bitcoin’s latest rally. In other words, spot volume has been concentrated in ETFs, which also explains the low on-chain volume.

Nonetheless, other metrics also indicate that investors who survived the 2022 bear market are holding on to their coin stash in anticipation of continued price increases.

For example, the percentage of bitcoin supply that was last active three to five years ago continues to increase. Several analysts expect the price of Bitcoin to climb into six figures in the coming months, finally culminating well over $150,000.

“Once we see the price really start to move, that’s when on-chain volume will increase. Older coins will move to exchanges to be sold. Until then, low on-chain volume will “chain is a sign of supply-side illiquidity,” analysts said Blockware.

Bitcoin changed hands at $67,700 at press time, up 5% over 24 hours. The CoinDesk 20 Index, a broader market gauge, also rose 5%.

The percentage of supply that was last active three years ago continues to increase.  (Blockware solutions, Glassnode)The percentage of supply that was last active three years ago continues to increase.  (Blockware solutions, Glassnode)

The percentage of supply that was last active three years ago continues to increase. (Blockware solutions, Glassnode)

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