Bitcoin price has continued to move within a consolidation range since hitting a new all-time high in mid-March. This slow price movement has been a concern for most investors, especially when the leading cryptocurrency recently lost support at the $60,000 level.
Interestingly, price is not the only Bitcoin metric that has declined since the first quarter of the year. Data analytics firm Santiment revealed that on-chain activity on the Bitcoin network has also slowed over the past few months.
How historically low on-chain activity affects the price of BTC
in New Publication On the X platform, Santiment revealed that on-chain activity on the Bitcoin network is near historic lows. This detection is based on the downward trend observed in various metrics, particularly transaction volume, daily active addresses, and number of whale transactions.
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According to the blockchain intelligence platform, investors have been trading less with BTC since the leading cryptocurrency reached a new all-time high price. As a result, Bitcoin chain activity fell to its lowest level since 2019.
Analyzing the metrics, Santiment found that transaction volume on the leading blockchain fell to its lowest levels in the past decade. The data analytics company defines transaction volume as a metric that tracks the total amount of coins transacted for a particular asset over a time frame.
Furthermore, Santiment stated in its report that the number of daily active addresses, which measures the number of distinct addresses that participated in a BTC transaction on any given day, has reached its lowest level since January 2019.
Source: Santiment/X
The blockchain intelligence platform also revealed that whale activity has slowed on the Bitcoin network. The number of whale trades (over $100,000) fell to the lowest level since the end of 2018, according to Santiment data.
On the surface, the decline in cross-chain activity appears to be a worrying trend and a symptom of market instability. However, Santiment noted that this decline may not necessarily be linked to impending declines in Bitcoin prices – as we have seen in recent weeks.
The decline in cross-chain activity is more indicative of “crowd fear and hesitation” among traders, the analytics firm said. Ultimately, this underscores the relationship between on-chain activity and sentiment in the Bitcoin market.
Bitcoin price at a glance
according to Data from CoinGeckoBitcoin price is sitting just above $60,770, with the price falling just 0.2% in the past day.
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Bitcoin price continues to move within a range | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
