Bitrabo Editorial
According to a recent report from Glassnode, there has been a drop in Bitcoin’s transfer volume, which may indicate potential challenges for BTC in the near future.
Declining Bitcoin and Exchange Transaction Volumes
Glassnode’s latest weekly report highlights a decrease in the Entity-Adjusted Transfer Volume for Bitcoin. This particular metric measures the overall Bitcoin volume involved in blockchain activities.
The Entity-Adjusted Transfer Volume refines the data to reflect transfers occurring between distinct entities, defined by Glassnode as groups of addresses identified as being owned by the same investor through their analysis.
Transfers between wallets belonging to a single holder do not significantly influence the market dynamics; thus, using the Entity-Adjusted Transfer Volume allows for a more accurate depiction of the trading activity.
The report includes a chart that illustrates the trend of Entity-Adjusted Volume along with its 30-day and 365-day moving averages over the last several years.
As per the data, the current daily Bitcoin Entity-Adjusted Transfer Volume stands at approximately $6.2 billion. While this figure isn’t inherently low, the downward trend observed recently is noteworthy.
Analysis of the 30-day moving average indicates a steady decline in network volume, which has recently dipped below the 365-day moving average. Glassnode describes this development as a generally negative signal.
Earlier this year, the monthly average volume soared above the yearly average due to heightened interest in cryptocurrency when Bitcoin’s price reached new all-time highs.
The subsequent volume decrease likely correlates with Bitcoin’s recent lack of price movement, causing investor disinterest.
This sentiment can also be reflected in another Bitcoin trading metric: the Combined Exchange Inflow/Outflow Volume, which gauges the total Bitcoin available to and from centralized exchange wallets.
The graph indicates that this exchange inflow/outflow volume trend mirrors that of the transfer volume. It reveals a more pronounced divergence, with the 30-day moving average significantly falling below the 365-day average.
According to the report, this signifies a reduction in investor participation and decreased activity among speculators under the current pricing conditions.
Bitcoin Price Updates
Earlier today, Bitcoin saw a drop to approximately $55,500; however, it quickly rebounded to around $56,700.