Transaction activity at 2-year high
Data shows that the average number of Bitcoin transactions has risen to the highest level since April 2021, indicating that the asset’s price may be bullish.
Bitcoin transactions occur at an average rate of 309,500 per day
According to the latest weekly report from Glassnode, the number of transactions is currently significantly above the average for the year. The relevant indicator here is the “transaction count”, which, as the name already suggests, measures daily transfers on the Bitcoin blockchain.
When the value of this metric is high, it means that many transactions are taking place on the BTC network right now. Such a trend suggests that traders are currently active in the market.
On the other hand, low values suggest that the network is not seeing much activity at the moment. This trend may indicate that overall interest in the cryptocurrency is currently low among investors.
Now, here’s a chart showing the trend of Bitcoin transaction numbers as well as its 30-day and 365-day simple moving averages (SMA) over the past few years:
The value of the metric seems to have been elevated in recent days | Source: Glassnode's The Week Onchain - Week 12, 2023
The graph above shows that the number of Bitcoin transactions has seen some highs in recent months. This trend is not surprising, as rallies that the asset is currently observing tend to be exciting for investors. Therefore, they are attracted to the blockchain in such times.
Interestingly, the recent levels of the indicator are higher than those observed during the bull run in the second half of 2021. The 30-day SMA of the metric had now increased to 309,500 transactions per day, the highest the metric has been since April 2021, when the bull rally in the first half of 2021 was at its peak.
There have only been 627 days in the entire life of the asset (equivalent to 12.2% of BTC’s history) with a higher average number of daily transactions in 30 days.
In general, high transaction count values may indicate that not only old users are showing high activity, but also that new users are joining the network. Since the indicator’s value has been quite significant recently, it is a likely sign that cryptocurrency adoption has increased.
Sustained high transaction numbers can provide a sustainable basis for bullish momentum in the long term as new users entering and transacting on-chain are what keep the Bitcoin economy moving.
From the chart, it is clear that the 2017 bull run, the April 2019 rally and the 2021 bull run all saw fairly high monthly average values of the indicator in the startups, showing that this theory works in practice.
BTC price
At the time of writing, Bitcoin is trading around $27,800, up 14% in the past week.
Looks like BTC has slipped below $28,000 | Source: BTCUSD on TradingView
Featured image from Traxer on Unsplash.com, Charts from TradingView.com, Glassnode.com
