Bitcoin on-chain activity declines, price movement sluggish

Activity on the Bitcoin (BTC) network is approaching historic lows, and in the two months since Bitcoin reached its all-time high price, investors have slowed transactions significantly.

Insights from data analytics firm Santiment reveal a slowdown in on-chain activity on the Bitcoin network over the past few months, painting a nuanced picture of the cryptocurrency’s current state.

In a May 11 update on X, Santiment highlighted that on-chain activity on the Bitcoin network is at its lowest level since 2019. This observation is due to the noticeable downward trend in various metrics, including trading volume, daily active addresses, and whale transaction count.

According to Santiment, Bitcoin’s on-chain transaction volumes are approaching a 10-year low, while the number of daily active addresses is at its lowest level since January 2019.

Additionally, the analytics firm’s data shows that whale transactions, typically those valued above $100,000, have slowed significantly, mirroring levels last seen in December 2018.

While the decline in on-chain activity may seem alarming at first glance, analysts at Santiment suggested that it may not be directly related to impending BTC price declines as seen in recent weeks.

Instead, they attribute the decline to “crowdphobia and indecision” among traders, highlighting the complex connection between on-chain activity and market sentiment.

Despite these challenges, Bitcoin’s price has been relatively stable at the time of writing, with a slight increase of 0.1% over the past day, hovering just above $61,000.

Bitcoin 24-hour price chart | Source: CoinGecko

The cryptocurrency recorded a 24-hour trading volume of $12.67 billion, which was 37% lower than the previous day.

In seven days, the Bitcoin price is down 4.6%, meaning it is underperforming the global crypto market, which is down 4.2%, according to CoinGecko data.

As investors move through this period of consolidation and on-chain activity subsides, market sentiment and broader economic factors are likely to play a key role in shaping Bitcoin’s trajectory in the coming weeks.

Bitcoin, Runes protocol

According to the Dune Analytics dashboard, the Runes protocol in Bitcoin has generated $135 million in transaction fees on the cryptocurrency’s largest blockchain.

On-chain data showed that tokens issued under the standard generated more than 2,100 BTC within a week of the halving.

Activity has slowed since then. According to the Dune analysis dashboard cited by The Block, the lowest level of activity was seen in the Runes protocol on Friday, May 10.