The weekly Bitcoin transactional volume is up 94% with the network seeing $9.1 billion of value transacted per day. Although the transaction volume rose sharply last week, the network is seeing a relatively low transaction count at the rate of 200k transactions daily according to Glassnode analysts.
According to the analysts, on-chain activity is however relatively low, now 38% down from its February peaks that preceded the April all-time high price of above $64,000. On-chain activity is now at the level it was during the 2018-19 capitulation bottom according to Glassnode analysts. During the capitulation, Bitcoin tanked to slightly above $3,000 per coin. The transactional count on the network dropped by 50% then.
“This suggests that demand for on-chain block-space is likely dominated by fewer, but larger size transactions at present and is an interesting combination of indicators worth keeping an eye on,” wrote the analysts.
An uptick in transactional volume and general on-chain activity is almost always followed by price action in the upward direction. For instance, when Bitcoin peaked in April this year to above $64,000, the network was seeing around 325,000 transactions daily. However, not when the transaction count is still low at its current state. That said, the majority of the slight uptick in transactional volume last week was obviously followed by a 20% weekly uptick in price to a now three-month highest price of $42,351 attained on Sunday. Since then, Bitcoin has dropped 11% in three days to the current rate of $39,953 per coin. Indeed, even the daily trading volume is now down by 11%.
Given the current metrics, if history repeats itself, then Bitcoin price will largely remain indecisive for at least in the near medium short term but there is nothing much so far to sustain an immediate short term pump. That is if the majority of price action will be a factor of on-chain activity. The low transactional count has already been unable to defend the now three-month highest price of $42,351 attained on Sunday.
However, the low transactional count is also a factor of an uptick in accumulation trend seen on the Bitcoin network according to the Glassnode analysts. Smaller holders are also joining the whales in accumulation in expectation of a huge price uptick. Are they getting late for the party? Although this accumulation may act to propel the price higher later in the medium short term, it currently means that a large-scale bullish impulse may take some time to develop. Price may dip even further in the immediate short term.
“One of the most aggressive accumulators since May are the Shrimp to Crab cohorts holding < 10 BTC. These smallholders now own an all-time high of 13.8% of the total coin supply with the trend of accumulation clearly accelerating from May onwards. Of particular note is the 1 to 10 BTC cohort (bottom light green in chart below) which distributed since Jan and have returned to accumulation.”