Bitcoin (BTC) has been making headlines once again as its price surged to new record highs, surpassing the $70,000 mark. However, despite these impressive price movements, the actual economic activity on the Bitcoin blockchain seems to be lagging rather than thriving.
According to insights from research firm Blockware Solutions, this disparity reflects a prevailing sentiment of holding among investors in the market.
In the latest edition of the Blockware Intelligence newsletter, analysts noted that the average on-chain transfer volume in USD remains significantly lower than the peak observed during the 2021 bull market. This suggests a reluctance among holders to sell their Bitcoin, contributing to the subdued on-chain activity.
Glassnode, a data tracking firm, defines transfer volume as the U.S. dollar value of the total BTC transferred on-chain, considering only successful transfers. Presently, the seven-day and 14-day average mean transfer volume stands below $200,000, a stark contrast to the levels exceeding $1 million seen during the peak of the 2021 bull run.
The recent surge in Bitcoin’s price can be attributed primarily to the embrace of Nasdaq-listed spot Bitcoin ETFs by Wall Street. Consequently, much of the trading volume has been concentrated within these ETFs, leading to the observed low on-chain volume.
However, additional metrics suggest that investors who weathered the bear market of 2022 are holding onto their Bitcoin in anticipation of further price appreciation.
Notably, the percentage of Bitcoin supply that has remained inactive for three to five years continues to rise, indicating a belief among holders in an imminent price rally.
Many analysts foresee Bitcoin’s price surpassing six figures in the coming months, with projections reaching well above $150,000.
As Blockware analysts suggest, a significant surge in on-chain volume is expected once the price gains momentum, as older coins are likely to be moved to exchanges for selling. Until then, the subdued on-chain volume serves as an indicator of limited supply-side liquidity.
At the time of reporting, Bitcoin was trading at $69,212, marking an increase over the past 24 hours. Concurrently, the CoinDesk 20 Index, reflecting broader market sentiment, also recorded an uptick.
