Bitcoin Volume Still 79% Lower Than 2021 Bull Run: Glassnode

Data from Glassnode shows the Bitcoin transfer volume is still 79% lower than what was observed during the bull run back in 2021.

Bitcoin Transfer Volume Remains Low Despite The Rally

According to data from the on-chain analytics firm Glassnode, the total transfer volume on the BTC network is just $2.73 billion per day currently. The “total transfer volume” here is an indicator that measures the total amount of Bitcoin (in USD) being transacted on the blockchain daily.

When the value of this metric is high, it means the investors are moving a large number of coins around the network currently. Such a trend is generally a sign that traders are active in the market right now.

On the other hand, low values of the indicator imply the blockchain is observing low activity at the moment. This kind of trend can suggest that the general interest in the coin among investors may be low currently.

Now, here is a chart that shows the trend in the Bitcoin total transfer volume over the last few years:

The value of the metric seems to have been in an overall downtrend since quite a while now | Source: Glassnode on Twitter

Note that the Bitcoin total transfer volume indicator used here is the “entity-adjusted” one, meaning that the transactions being counted here are the ones being done between entities, and not individual wallets.

An “entity” refers to a collection of addresses that Glassnode has determined to belong to the same investor. Making the adjustment for entities has the benefit that all transfers done between the wallets of a single holder are removed from the equation, thus providing a better estimation of the activity on the chain.

From the above graph, it’s visible that the Bitcoin entity-adjusted total transfer volume had surged to some pretty high values when the bull run in the first half of 2021 had taken place.

This trend makes sense, as sharp price actions like rallies are exciting to the general investor, so a lot of users get attracted to the blockchain during such periods and add to the transfer volume.

At the peak during this bull run, the indicator had managed to hit a value of around $13.1 billion. Since then, however, the metric has been in an overall state of decline.

The bull run in the second half of 2021 also observed an uplift in the transfer volume, but the metric still didn’t hit values as high as during the rally in the first of that year.

Bear markets have historically seen this metric drop to low values (as the price tends to display boring sideways price action for large stretches during such periods), so it’s not surprising that the indicator also plunged during the recent bear market.

What may be unexpected, however, is that despite the start of a rally this year, the Bitcoin total transfer volume has still not seen any significant uplifts. The indicator’s value is currently around $2.73 billion, which is 79% lower than the 2021 bull run peak value.

This lack of volume would suggest that the cryptocurrency doesn’t have anywhere near the same interest behind it that it did in 2021, which could possibly be worrying for the sustainability of the rally.

BTC Price

At the time of writing, Bitcoin is trading around $26,800, down 2% in the last week.

BTC consolidates sideways | Source: BTCUSD on TradingView

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com