Bitcoin activity on-chain is approaching historic lows

Since reaching a modern record high in mid-March, Bitcoin’s price has continued to trade in a consolidation range. This sluggish price action has been a source of concern for most investors, especially when the top cryptocurrency recently lost support at $60,000.

Interestingly, price is not the only Bitcoin metric that has cooled since the first quarter of the year. Data analytics firm Santiment revealed that activity on the Bitcoin network has also declined over the past few months.

How historically low on-chain activity affects the BTC price

IN modern post on Platform X, Santiment revealed that on-chain activity on the Bitcoin network is approaching historic lows. This finding is based on a noticeable downward trend in various indicators, especially transaction volume, daily busy addresses and number of whale transactions.

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According to blockchain intelligence platform, investors are making fewer transactions using BTC since the main cryptocurrency hit a modern all-time high price. As a result, Bitcoin activity on the chain dropped to its lowest level since 2019.

Analyzing metrics, Santiment found that transaction volume on the pioneering blockchain is falling to its lowest level in the last decade. The data analytics company defines transaction volume as a metric that tracks the total number of coins executed for a given asset over a specific time frame.

Moreover, Santiment mentioned in its report that the number of daily busy addresses, which measures the number of distinct addresses that participated in a BTC transaction on a given day, has reached its lowest level since January 2019.

Source: Santiment/X

The blockchain intelligence platform also revealed that whale activity on the Bitcoin network has slowed down. The number of whaling transactions (over $100,000) has fallen to its lowest level since behind schedule 2018, according to Santiment data.

At first glance, the decline in on-chain activity seems to be a worrying trend and a symptom of an unstable market condition. Santiment noted, however, that this decline does not necessarily have to be related to upcoming declines in BTC prices – as has been seen in recent weeks.

The analytics firm said the decline in online activity was more indicative of “crowd fear and indecision” among traders. Ultimately, this highlights the connection between on-chain activity and Bitcoin market sentiment.

Bitcoin price at a glance

According to data from CoinGeckoBitcoin is trading just above $60,770, with just a 0.2% price decline over the past day.