2 years ago
Date: 20 Apr 2022 - 12:54
Despite being more than 3000 up in the past two days bitcoins price trajectory has been on the downfall on a more macro scale. According to a recent analysis the primary reason for this could be the massive drop in the network activity especially inflows and outflows to and from cryptocurrency exchanges.BTC Exchange Activity PlummetsIt was precisely six months ago when the largest cryptocurrency by market cap spiked to an alltime high of nearly 70000 perhaps fueled by the hype surrounding the firstever BTC futures ETF going live in the US.As the hype dispersed in the following months and other macropolitical events took center stage such as the US raising interest rates the rumored end of the COVID19 pandemic and the war between Russia and Ukraine bitcoin slumped in value. At one point it was down by more than 50 from its peak in just months.BTC rallied once again at the end of March and neared 50000 but the start of April was bearish once more and the asset fell below 40000 weeks later.The analysts from CryptoQuant believe there could be another reason behind these sporadic price movements the network activity. In a recent post they explained the correlation between BTCs price developments and inflowsoutflows from cryptocurrency exchanges.Essentially they argued that the declining network activity is connected to a rapid price fall which is confirmed by the graph below.Bitcoin Price vs Network Activity. Source CryptoQuantHistorically a huge drop in address counts inflows and outflows lead to a significant price correction for BTC.As the picture above demonstrates the network activity has dumped to its lowest levels since before the late 2021 rally.Network Fees Down TooAlthough the declining network activity could spell more trouble for BTCs upcoming price movements theres at least one positive outcome coming from this. The average transaction fees have declined to their lowest levels in about a year in line with the number of transactions.BlockchainCom shows that the average costs now stand around 1.4 and were even down to 1.04 a few days back. Just for reference they reached an alltime high during the April 2021 bull run at over 60. During November 2021 price spike the fees were around 3.Bitcoin Transaction Fees. Source Blockchain.com
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Crypto Overview Show morenavigate_next
| USDT Market | Price | Change (24H) | Market Cap | Last 7 Days |
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39997.79 $ | 0 % | 760.32 Billion $ |  |
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3001.33 $ | 0 % | 360.05 Billion $ |  |
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1.001 $ | 0 % | 82.65 Billion $ |  |
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398.86 $ | 0 % | 59.29 Billion $ |  |
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1.004 $ | 0 % | 50.96 Billion $ |  |
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101.49 $ | 0 % | 33.28 Billion $ |  |
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0.122 $ | 0 % | 31.52 Billion $ |  |
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0.7024 $ | 0 % | 30.96 Billion $ |  |
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82.96 $ | 0 % | 29.44 Billion $ |  |
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0.9455 $ | 0 % | 29.42 Billion $ |  |
Crypto News Show morenavigate_next
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