Bitcoin's On-Chain Activity Hits Lowest Since 2019: What's Next?
Bitcoin's On-Chain Activity Hits Lowest Since 2019: What's Next?
Bitcoin's onchain activity is approaching historic lows due to the dramatically slowed transactions in the last two months.
While some anticipate it as a bearish signal, others find it as an opportunity to accumulate more.
The crypto market is undergoing adjustments following the Bitcoin halving, with Bitcoin's value dropping about 18% from its peak, teetering on the edge of falling under the key $60,000 support level.
Moreover, the on-chain activity for Bitcoin is at its lowest in five years, a slowdown in transactions observed since reaching new heights. While some view this as a sign of a potential downturn, others see it as a chance to buy more at lower prices. Let's delve into this and explore whether Bitcoin will continue to decline or if it will pivot and start to recover.
On-Chain Activity Drops To Lowest In Five Years!
Bitcoin's on-chain activity, a measure of the total transactions recorded on the blockchain, is reportedly nearing historic lows, according to data from a financial website app.santiment.net. This downturn in activity has been observed in the two months following Bitcoin's all-time high, suggesting a significant slowdown in trading activities.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">📉 <a href="https://twitter.com/hashtag/Bitcoin?src=hash&ref_src=twsrc%5Etfw">#Bitcoin</a>'s <a href="https://twitter.com/hashtag/onchain?src=hash&ref_src=twsrc%5Etfw">#onchain</a> activity is approaching historic lows as traders have dramatically slowed transactions in the 2 months since its <a href="https://twitter.com/hashtag/alltimehigh?src=hash&ref_src=twsrc%5Etfw">#alltimehigh</a>. This isn't necessarily a sign of more <a href="https://twitter.com/search?q=%24BTC&src=ctag&ref_src=twsrc%5Etfw">
BTC
</a> dips, but rather a signal of crowd fear and indecision. <a href="https://t.co/Tg5TpnVv4D">https://t.co/Tg5TpnVv4D</a> <a href="https://t.co/ldtv3FPVxA">pic.twitter.com/ldtv3FPVxA</a></p>— Santiment (@santimentfeed) <a href="https://twitter.com/santimentfeed/status/1789383542021169208?ref_src=twsrc%5Etfw">May 11, 2024</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Moreover, This trend is not necessarily indicative of an impending decline in Bitcoin's price (BTC). Instead, it reflects a prevailing sentiment of fear and indecision among traders. The hesitation to engage in transactions could be attributed to the uncertainty surrounding the cryptocurrency market, which often leads to reduced trading volumes during periods of market stress.
The decrease in on-chain activity can be seen as traders exercising caution, possibly waiting for more stable market conditions before committing to new transactions. This cautious approach is a common reaction to the volatile nature of cryptocurrencies, where rapid price changes can occur unexpectedly.
While some might interpret low on-chain activity as a bearish signal, it's essential to consider that market sentiment can shift quickly, and such metrics are just one of many factors influencing Bitcoin's price. On the flip side, Long-term investors might view this period as an opportunity to accumulate more BTC, while others might prefer to wait until there's a clearer direction in the market.
Technical Charts Suggest More Bloodbath Ahead?
From a technical point of view, the Bitcoin price has taken a U turn from the $65,000 level and was reapproaching towards the lower boundary of the declining parallel channel observed on the daily chart.
It indicates increasing bearish dominance. The price currently hovers above the psychological level of $60,000 which if breaks could trigger more Bloodbaths and the price may drop significantly towards the monthly lows of $56,000 level.
On the higher side, the 50 day EMA has turned out as a resistance and could prevent the price from moving higher until the price hovers below it. The bulls need to surpass the 50 day EMA in order to reclaim a positive trend.
Bitcoin's onchain activity is approaching historic lows due to the dramatically slowed transactions in the last two months.
While some anticipate it as a bearish signal, others find it as an opportunity to accumulate more.
The crypto market is undergoing adjustments following the Bitcoin halving, with Bitcoin's value dropping about 18% from its peak, teetering on the edge of falling under the key $60,000 support level.
Moreover, the on-chain activity for Bitcoin is at its lowest in five years, a slowdown in transactions observed since reaching new heights. While some view this as a sign of a potential downturn, others see it as a chance to buy more at lower prices. Let's delve into this and explore whether Bitcoin will continue to decline or if it will pivot and start to recover.
On-Chain Activity Drops To Lowest In Five Years!
Bitcoin's on-chain activity, a measure of the total transactions recorded on the blockchain, is reportedly nearing historic lows, according to data from a financial website app.santiment.net. This downturn in activity has been observed in the two months following Bitcoin's all-time high, suggesting a significant slowdown in trading activities.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">📉 <a href="https://twitter.com/hashtag/Bitcoin?src=hash&ref_src=twsrc%5Etfw">#Bitcoin</a>'s <a href="https://twitter.com/hashtag/onchain?src=hash&ref_src=twsrc%5Etfw">#onchain</a> activity is approaching historic lows as traders have dramatically slowed transactions in the 2 months since its <a href="https://twitter.com/hashtag/alltimehigh?src=hash&ref_src=twsrc%5Etfw">#alltimehigh</a>. This isn't necessarily a sign of more <a href="https://twitter.com/search?q=%24BTC&src=ctag&ref_src=twsrc%5Etfw">
BTC
</a> dips, but rather a signal of crowd fear and indecision. <a href="https://t.co/Tg5TpnVv4D">https://t.co/Tg5TpnVv4D</a> <a href="https://t.co/ldtv3FPVxA">pic.twitter.com/ldtv3FPVxA</a></p>— Santiment (@santimentfeed) <a href="https://twitter.com/santimentfeed/status/1789383542021169208?ref_src=twsrc%5Etfw">May 11, 2024</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> Moreover, This trend is not necessarily indicative of an impending decline in Bitcoin's price (BTC). Instead, it reflects a prevailing sentiment of fear and indecision among traders. The hesitation to engage in transactions could be attributed to the uncertainty surrounding the cryptocurrency market, which often leads to reduced trading volumes during periods of market stress.
The decrease in on-chain activity can be seen as traders exercising caution, possibly waiting for more stable market conditions before committing to new transactions. This cautious approach is a common reaction to the volatile nature of cryptocurrencies, where rapid price changes can occur unexpectedly.
While some might interpret low on-chain activity as a bearish signal, it's essential to consider that market sentiment can shift quickly, and such metrics are just one of many factors influencing Bitcoin's price. On the flip side, Long-term investors might view this period as an opportunity to accumulate more BTC, while others might prefer to wait until there's a clearer direction in the market.
Technical Charts Suggest More Bloodbath Ahead?
From a technical point of view, the Bitcoin price has taken a U turn from the $65,000 level and was reapproaching towards the lower boundary of the declining parallel channel observed on the daily chart.
It indicates increasing bearish dominance. The price currently hovers above the psychological level of $60,000 which if breaks could trigger more Bloodbaths and the price may drop significantly towards the monthly lows of $56,000 level.
On the higher side, the 50 day EMA has turned out as a resistance and could prevent the price from moving higher until the price hovers below it. The bulls need to surpass the 50 day EMA in order to reclaim a positive trend.