Emily Walker
The data on the blockchain indicates that Bitcoin’s transaction volume has significantly decreased since reaching its peak last year. Here’s what that may mean for BTC.
Bitcoin Transaction Volume Drops to $11.2 Billion
According to a recent update from Glassnode, a firm specializing in on-chain analytics, Bitcoin’s Total Transfer Volume has been trending downwards. This metric represents the total daily transactions of Bitcoin, measured in USD.
A high value for this metric indicates that investors are actively moving significant amounts of Bitcoin, suggesting strong market interest. Conversely, a lower value points to reduced trading activity, implying a lack of investor focus on the asset.
Glassnode included a chart illustrating Bitcoin’s Total Transfer Volume over the past few years:
The chart displays the “Entity-Adjusted” Total Transfer Volume, which counts transactions between distinct entities rather than individual wallets. An ‘entity’ refers to a group of addresses identified as belonging to the same investor. This adjustment makes the data more relevant for market analysis since transactions between a single entity’s wallets don’t influence the broader market.
The graph reveals that the Entity-Adjusted Total Transfer Volume surged toward the end of last year, coinciding with when Bitcoin surpassed the $100,000 mark. Such price rallies often generate significant excitement among investors, similarly to how the final months of 2024 attracted attention.
However, since reaching a peak of $20.7 billion in December, the volume has experienced a notable decline, now registering at just $11.2 billion. This marks a nearly 46% decrease from its all-time high.
Investor transaction activity is crucial for sustaining price rallies, which may explain the recent price slowdown following the drop in volume.
Nonetheless, while this volume is considerably lower than its peak, it remains quite substantial in the context of Bitcoin’s history. Glassnode noted that there have only been 67 days in Bitcoin’s existence when transaction activity exceeded the current level.
Current BTC Price
As of now, Bitcoin is valued at approximately $105,300, reflecting a nearly 3% increase over the past week.