Bitcoin Transactions Hit Historic Lows Despite Bullish Expectations…What Does That Mean?
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Answer Bitcoin Transactions Hit Historic Lows Despite Bullish Expectations…What Does That Mean?
In less than a week, the price of Bitcoin rose from $44,000 to $50,000, an increase of 14%.
Bitcoin transactions were expected to rise and the network was crowded with a lot of transaction activity, which usually happens when prices are moving.
But this time it’s different.
According to a report published by Glassnode, Bitcoin transaction numbers are at historically low levels.
Glassnode report stated the following:
Bitcoin transactions are estimated to be worth around $18.8 billion in daily volume.
That number is less than half what it was when bitcoin hit its record price in May.
The report also indicated that there was a noticeable rise this week in the movement of the old currencies, which remained stable in the portfolios for at least five months, and the selling process started.
Read:More than 1 million ETH burned after only 3 months of implementing the “EIP-1559” upgrade
# bitcoin It surged towards the $50K level last week, absorbing the profits made by chain spenders
This week we take stock of who is spending coins, the flow of coins into exchanges, and the growing open interest in the derivatives markets.
Read more in The Week On-chain
– glassnode (glassnode) August 23, 2021
At first glance, it might seem that HODLers are about to sell their holdings, but that’s not the case.
Glassnode explained that despite the higher spending and movement of old bitcoins, the amount of bitcoin in the wallets of long-term holders has increased.
The long-term supply of bitcoin holders, which ranks any coin unspent for at least 155 days (five months), rose to an all-time high of 12.7 million bitcoin (67% of coins in circulation).
Why did bitcoin transactions hit historical lows?
What happened is that long-term holders benefited from the higher bitcoin prices in the first and second quarters.
However, they did not sell everything.
So, when they cut back on their spending (as evidenced by the lower transaction volume in the image below), the coins bought in December through March from the rise of Bitcoin were added to the long-term supply of its holders.
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Meaning, the lack of bitcoin movement and withdrawals is due to long-term bitcoin holders holding more of their cryptocurrency, likely to diversify portfolios and hedge against risk.
The Bitcoin price hike this time is different from any time before.
Where the interest was rising significantly among retail investors when prices rose, which is shown by the increase in searches on Google, but that was not present either this time, which we touched on in an article published yesterday on Arab Bitcoin:
Why did the rise in the price of Bitcoin not affect the increase in Bitcoin interest rates among individuals this time?
Read also:
China’s Supreme Court Declares Cryptocurrency Not Protected By Law
PayPal Launches Cryptocurrency Trading Service in the UK
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