Even though most cryptocurrency markets show signs of recovery, there is still a long way to go. For Bitcoin, several metrics – including overall transactions – keep hitting new lows, which may prove rather problematic. For now, all crypto markets remain in a relatively uneasy state.
Bitcoin Transactions Decrease Rapidly
Several metrics can depict how healthy a cryptocurrency network is at any given time. The number of active addresses is a crucial metric, as is the transaction volume. However, looking at the number of transactions is perhaps the essential aspect of all. For Bitcoin, that particular metric has now hit a two-year low at a rather unfortunate time.
One would expect there to be more transactions after the recent market dip. Transactions can indicate users either buying or selling Bitcoin for whichever reason. Additionally, many merchants accept Bitcoin payments today, yet they too will note a decrease in transactions lately.
It is unclear why the number of transactions is on the decline at the moment. Hitting a two-year low after a market retrace by nearly 50% seems like an unusual coincidence. It also indicates the recent market dump was likely triggered by funds already stored on exchanges and other trading platforms.
Coinciding with the decrease in overall network transfers is a significant drop in addresses sending BTC to exchanges. Although it is merely a one-month low, it is an intriguing development. Fewer addresses sending Bitcoin to exchanges don’t automatically mean there is less BTC on trading platforms, however.
Bitcoin Receiving Addresses Trend Downward
Another metric that is interesting, albeit not necessarily positive, is the Bitcoin receiving addresses one. More specifically, there is a substantial decrease in receiving addresses over the past month and a half. With a current six-month low in place for receiving addresses, there is a bit of a worrisome situation in place.
The current decrease in transactions, combined with a low in receiving addresses, creates an intriguing dynamic. It seems to indicate there are a lot of funds on exchanges and trading platforms already. However, some people might just be holding on to their funds as well. The lower price makes it infeasible for most people to spend Bitcoin or even sell it.
The coming days and weeks will prove crucial for Bitcoin. Its price remains subdued with relative ease, and some of the network activity has dropped off significantly. For lesser cryptocurrency networks, that would be problematic. The world’s leading cryptocurrency, on the other hand, can often overcome such setbacks with some ease.