Bitcoin’s network is showing some unusual activity lately. While the number of active users is dropping, the total amount of Bitcoin being moved around is actually increasing. Let’s break it down.
Active Users Down, Transaction Volume Up
Data analysts at Glassnode have noticed a split in Bitcoin’s activity metrics. The number of unique Bitcoin addresses involved in transactions (the “Active Address Count”) has fallen. This is a significant drop, below the typical range, suggesting less retail investor participation. This happened after Bitcoin’s price hit a record high and then fell.
Meanwhile, the total value of Bitcoin transferred on the network (“On-Chain Transfer Volume”) has actually gone up
by almost 8%, exceeding typical levels. This is puzzling, because fewer users seem to be active.
What’s Going On?
The key is understanding who’s using the network. The Active Address Count mostly reflects activity from smaller investors. The On-Chain Transfer Volume, however, is heavily influenced by large investors (“whales”) moving massive amounts of Bitcoin.
So, the drop in active users likely reflects retail investors pulling back after the price drop. But the increase in transaction volume suggests that large investors are taking advantage of the situation, perhaps repositioning their holdings.
Bitcoin Price Continues to Fall
In the last 24 hours, the price of Bitcoin has continued to fall, currently sitting around $109,900. This downward trend adds to the overall picture of a market shift.