Bitcoin Bear Market sends chain measurements into a sideways trend
Data show that the Bitcoin bear community has made the market inactive as transaction fees continue to be extremely low.
Bitcoin On-Chain activity remains low as price action remains irrelevant
According to the latest weekly report from Arcane Research, the last week was the lowest average daily transaction fees since April 2020.
The “transaction fees” are an amount that senders must attach to their transactions when transferring to the Bitcoin blockchain.
This is one of the two sources of income for miners (the other is the fixed block rewards), and therefore they usually handle transactions with the higher fee first.
The BTC network has an upper limit for how many transactions can be handled in a day, and every time there is a lot of activity from investors, the chain becomes tight.
Investors who do not want to wait for their transfers to go through only charge a higher than average fee for their transactions.
Some other investors may similarly try to outcompete these senders who set a high fee and in this way the average fees can be blown up.
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But in times of little activity, there is no incentive for investors to opt for higher fees, and the average remains low.
Now, here’s a table that shows how the various calculations related to the Bitcoin network have changed over the last seven days:
The value of the fees per day seems to have plunged 10% over the past week | Source: Arcane Research's The Weekly Update - Week 26, 2022
As you can see above, the daily transaction volume has been only around $ 4 billion recently, a value that was typically $ 6 billion over the past year.
Bitcoin fees per day have fallen more than 10% over the past week, as the value of the calculation is now around 279k. These average daily fees are the lowest they have been since April 2020.
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The historically low activity on the blockchain is probably due to the stale price activity during this bear market which is causing investors to lose interest in crypto.
The report notes that the number of active Bitcoin addresses has also remained at a low value over the past week.
BTC price
At the time of writing, Bitcoin’s price is floating around $ 20.1k, up 0.3% over the last seven days. Over the past month, the crypto has lost 33% in value.
The chart below shows the trend in the price of the coin over the last five days.
Looks like the value of the crypto has surged up over the last few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Arcane Research
