Fresh data from Glassnode, a blockchain analytics platform, shows that on-chain transactions on Bitcoin, the world’s most valuable network, fell to an all-time low in the past three months. That there are fewer transactions suggests that holders are unwilling to sell and are more inclined to HODL.
Bitcoin On-chain Transactions Shrinking
Another notable finding from this data shows that 95% of all circulating BTC supply has not changed hands in the last month. This further cements analysts’ view that more holders are not ready to change ownership, directly contributing to the shallow levels of transfers in the last three months.
This development was recorded when Bitcoin prices moved sideways for an extended period while remaining boxed within the bullish range established in June and July 2023. In July 2023, prices roared above $31,500, registering multi-month highs.
However, the coin has since retraced and is trending below $30,000, a psychological resistance level. Technically, the frequency of on-chain transactions can relay important metrics that analysts can use to gauge interest and network utilization.
All transactions are unique and must be recorded on-chain. Usually, the more transactions there are, the more users are willing to move value.
From the price point, however, it could mean that holders (if there are more transfers) are eager to sell, exiting their positions, especially if prices are contracting. At spot rates, prices are moving horizontally but remain within a bullish frame buoyed by supportive fundamental factors that could catalyze demand in the coming few months.
Still, it should be noted that although the number of on-chain transactions has stagnated, analysts didn’t factor in transactions executed via the Lightning Network (LN) or Bitcoin trades on centralized exchanges like Coinbase or Binance. While significant, the number of LN transactions is relatively lower than those conducted on-chain. Meanwhile, CEXs must batch transactions before eventually sending them on-chain for confirmation.
Is BTC Ready For A Break Above $32,000?
That more are HODLing might not only support prices but also reveal the conviction among holders that BTC might be a better store of value in the long haul. It is still unclear whether many people will choose to hold ahead and after Bitcoin halves miner rewards, making the coin more deflationary.
Overall, more traders are bullish, predicting that the coin will likely bounce higher, with some predicting a break to new highs above July highs of around $32,000. This rally is once the United States Securities and Exchange Commission (SEC) approves the first spot of Bitcoin Exchange-Traded Funds (ETFs) and the network halves miner rewards in 2024.
