Bitcoin Volume Still 79% Lower Than 2021 Bull Run: Glassnode
Data from Glassnode shows that Bitcoin transfer volume is still 79% lower than what was seen during the 2021 bull run.
Bitcoin Transfer Volume Remains Low Despite Rally
According to data from on-chain analytics firm glassnode, the total transfer volume on the BTC network is only $2.73 billion per day currently. “Total transfer volume” here is an indicator that measures the total amount of Bitcoin (in USD) being transacted on the blockchain on a daily basis.
When the value of this metric is high, it means that investors are currently moving a large number of coins across the network. This trend is usually a sign that traders are active in the market right now.
On the other hand, low indicator values imply that the blockchain is currently seeing low activity. This type of trend could suggest that general interest in the coin among investors may currently be low.
Now, here’s a graph that shows the trend in total Bitcoin transfer volume over the last few years:
The value of the metric seems to have been in an overall downtrend since quite a while now | Source: Glassnode on Twitter
Note that the indicator of total Bitcoin transfer volume used here is “entity-adjusted”, meaning that the transactions counted here are those being made between entities, not individual wallets.
An “entity” refers to a collection of addresses that Glassnode has determined belong to the same investor. Adjusting for entities has the benefit that all transfers made between a single holder’s wallets are removed from the equation, thus providing a better estimate of activity in the chain.
From the graph above, it is visible that the total transfer volume adjusted for the Bitcoin entity rose to some pretty high values when the bull run occurred in the first half of 2021.
This trend makes sense, as sharp price actions such as rallies are exciting for the general investor; therefore, many users are attracted to the blockchain during these periods and increase the transfer volume.
At the peak of this bull run, the indicator managed to reach a value of around $13.1 billion. Since then, however, the metric has been in a general state of decline.
The bull run in the second half of 2021 also saw an increase in transfer volume, but the metric has not yet reached values as high as during the first rally of that year.
Bear markets have historically seen this metric drop to lows (as price tends to exhibit boring sideways price action for long periods during these periods), so it’s not surprising that the indicator also dropped during the recent bear market. .
What may be unexpected, however, is that despite the start of a rally this year, the total Bitcoin transfer volume has yet to see significant increases. The indicator value is currently around $2.73 billion, which is 79% lower than the peak value of the 2021 bull run.
This lack of volume suggests that the cryptocurrency has nowhere near the same interest as it did in 2021, which could be worrying for the sustainability of the rally.
BTC price
At the time of writing, Bitcoin is trading around $26,800, down 2% over the past week.
BTC consolidates sideways | Source: BTCUSD on TradingView
Featured Image of Kanchanara from Unsplash.com, Charts from TradingView.com, Glassnode.com