- Bitcoin’s on-chain activity has hit a historic low due to market uncertainty and economic factors.
- Despite the drop in transaction volumes, long-term Bitcoin holders are retaining their assets, showing strong confidence.
- The current price volatility aligns with historical post-halving corrections, deviating from typical cycles.
Bitcoin’s on-chain activity hits a multi-year low amid market uncertainty, but long-term holders remain confident. This article explores the factors behind this trend and its implications for the crypto market.
Bitcoin’s On-Chain Activity Hits Multi-Year Lows
According to data from Santiment, Bitcoin’s on-chain transaction volume has plummeted to levels not seen since 2019. This decline in activity follows Bitcoin’s all-time high in March 2024 and suggests that traders are hesitant to move their positions due to market volatility.
Market Reaction and Analysis
Market analysts have noted the sharp drop in transaction volume. Bitcoin tested the $60,000 support level on May 10 after briefly reaching $63,500. Some traders suggest that institutional players may be manipulating the market to prevent significant breakouts during weekends when the ETF market is closed.
Price Performance and Economic Influences
Bitcoin’s price performance has been volatile, with the cryptocurrency struggling to maintain its position above $63,000. Bearish signals from US economic data and hawkish comments from Federal Reserve officials have dampened bullish sentiment. The University of Michigan Consumer Sentiment Survey showed a significant drop from 77.2 in April to 67.4 in May, while inflation expectations increased, adding to market concerns.
Long-Term Holders Maintain Confidence
Despite recent price drops, long-term Bitcoin holders remain optimistic. Data from CryptoQuant shows that these holders have not sold their assets after Bitcoin’s peak at $73,000. At the time of writing, Bitcoin bulls are still fighting for market control, despite a broader market sell-off that brought the price down to an intra-day low of $60,492.63.
Conclusion
While Bitcoin’s on-chain activity has hit multi-year lows, long-term holders are showing confidence in the cryptocurrency’s future. This trend suggests a strong belief in Bitcoin’s long-term value, despite short-term market volatility and economic uncertainty. As the market awaits major economic data and upcoming events, including PPI and CPI reports and a speech from Fed chair Jerome Powell, these factors may influence Bitcoin’s trajectory in the coming weeks.
