Despite the 45 percent rise in the price of Bitcoin over the past 30 days , other fundamentals of the main cryptocurrency are not showing an increase at the same rate. According to a recent study by experts from the analytical platform Glassnode, the number of transactions on the Bitcoin network is still near its minimum after the cryptocurrency market crash in May.
This creates a tangible contrast between the growth in value and the activity of coin users, which can also be regarded as a negative phenomenon. Let’s talk about what is happening in more detail.
We checked the actual data: after yesterday’s reaching the level of 50 thousand dollars, Bitcoin has slightly rolled back. Regardless, the weekly chart of the cryptocurrency still looks very good.
The first coin has shown gains over the past five weeks, so the bullish trend continues with confidence.
Bitcoin weekly chart
What’s happening with Bitcoin?
Now the average number of BTC transfers in the cryptocurrency network ranges from 175 to 200 thousand transactions. For comparison, this indicator peaked in the current bull cycle in January this year, surpassing 300 thousand transactions per day.
According to Cointelegraph , the current activity on the Bitcoin blockchain is comparable to the bearish trend of 2018-2019, when the value of BTC plummeted by more than 85 percent after reaching the $ 20,000 line , that is, its all-time high at that time.
This means that, in fact, now investors are not showing such interest in cryptocurrency as it was at the beginning of 2021. Accordingly, many of them choose not to get involved with digital assets at the moment for any reason.
Analysts admit that the recent rise in BTC to the level of 50 thousand dollars from the bottom at 28 thousand was caused by professional investors who invest in coins in large quantities. This is what can explain the low activity in the blockchain, that is, the passivity of novice amateurs to invest in digital assets.
The number of transactions in the BTC network
If the activity of Bitcoin users raises concerns, then the trend in the turnover of the supply of coins, on the contrary, indicates the likelihood of continued growth in the price of BTC. As noted in Glassnode, we are talking about the number of bitcoins held in the wallets of long-term investors. Most recently, this figure reached its all-time high at 12.69 million BTC .
And this is really important, because the term «long-term holders » refers to those market players whose investment planning horizon reaches at least several years. That is, they believe in the promising future of Bitcoin and gradually accumulate cryptocurrency in any conditions, thereby reducing its supply in trading. And the lower the supply, the more likely the asset price will rise at the same level of demand.
However, some small investors are also active. This is proved by the following chart, where the red indicates the number of wallets that have from 0.01 to 1 ETH, and green – from 0.001 to 0.1 BTC. Accordingly, those with relatively little capital are also investing little by little. However, most of them are still wary of being connected to the industry.
The number of BTC and ETH wallets with a relatively small supply of funds
The only thing that can stop bullrun now is the flood of negative news about crypto scams on a large scale . Unfortunately, this phenomenon is very relevant in Australia, where, thanks to the activity of scammers, local residents have lost more than $ 50.5 million. According to the Australian Competition and Consumer Protection Commission (ACCC), the number of cases in the country related to cryptocurrency fraud increased by 53.4 percent. It is estimated that by the end of 2021 the total amount of losses to Australians from fraudsters will exceed $ 100 million .
18.5 million of this amount went to scammers who built their schemes around an alleged connection with Bitcoin. That is, in fact, they enjoyed the popularity of digital assets and made money on it. This is a 44 percent increase over the total losses from crypto scammers in 2020. Then the figure was $ 12.8 million.
Based on 4,763 reports received in 2021 alone, ACCC Vice Chair Delia Ricard stated that 2,240 complaints were mainly related to illegal transactions and Bitcoin traffic. Fraudsters lure investors into using fake trading platforms under the guise of celebrity identities, even though the celebrities themselves are not even aware of this. And these are only special cases of a global negative phenomenon, which is now the main factor that negatively affects the cryptoindustry in the eyes of large investors.
We believe that low activity of Bitcoin network users should not be considered as a negative factor. It only means that the current popularity of cryptocurrencies is significantly behind the indicators of the first half of 2021. Accordingly, many investors are still getting ready to contact the niche and buy coins. What exactly they are waiting for is unknown. However, judging by the charts of the coins, the market has already gone through its local bottom, so further it is worth relying on its development rather than a downtrend. It is likely that we will indeed face a repeat of the situation from 2013 .
