On-chain data shows the Bitcoin transfer volume has recently reached levels 75% higher than the FTX crash lows as it continues its uptrend.
Bitcoin Total Transfer Volume Has Continued To Go Up Recently
According to the latest weekly report from Glassnode, the BTC transfer volume has increased to $4.2 billion per day now. The “transfer volume” here refers to the total amount of Bitcoin (in USD) that’s being involved in transactions on the blockchain.
When the value of this metric is high, it means that holders are moving around a significant number of coins on the network. Such a trend is generally a sign that the traders are actively participating in the market.
On the other hand, low values imply the blockchain isn’t registering much activity right now. This kind of trend may suggest that the general interest in the cryptocurrency is low at the moment.
Now, here is a chart that shows the trend in the Bitcoin transfer volume over the last few years:
Looks like the value of the metric has been going up in recent days | Source: Glassnode's The Week Onchain - Week 28, 2023
Note that the Bitcoin transfer volume indicator being used here is the “entity-adjusted” one. This means that the metric only keeps track of the volume being exchanged between different entities on the network, rather than just the different individual addresses.
An “entity” is a collection of addresses that are controlled by the same investor. And since a holder moving coins between their personal wallets isn’t of any consequence to the wider network (at least in the context of the current discussion), it makes sense to exclude such transfers from the volume.
From the chart, it’s visible that the entity-adjusted Bitcoin transfer volume had declined to relatively low values during the lows that followed the FTX crash back in November 2022.
Usually, investors find sideways movement boring, so this consolidation period after the crash naturally resulted in traders becoming disinterested and the volumes declining.
With the start of the rally this year, however, fresh interest had returned to the cryptocurrency as the indicator’s value had begun heading up. After the local top in April, though, this uptrend had broken as the asset had gone through a turbulent period.
But with the latest leg in the rally that has taken the cryptocurrency above the $30,000 mark, volumes have once again spiked. Following the latest uplift in the metric, around $4.2 billion is being transacted on the Bitcoin blockchain per day, which is 75% more than the aforementioned FTX lows.
Transfer volume picking up is naturally a constructive sign for BTC, as it shows that there is still elevated interest in the asset among investors. Though, when compared to the 2021 bull run, the current values of the indicator are still significantly lower.
BTC Price
At the time of writing, Bitcoin is trading around $30,400, down 1% in the last week.
BTC has been moving sideways in the last few days | Source: BTCUSD on TradingView
