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Analyst: The decline in the number of bitcoin transactions could be a sign of a declining market


The speed of circulation and the volume of weekly bitcoin transactions have reached very low levels. Experts believe that even if the price of Bitcoin remains at $ 33,000, there is still a possibility of a deeper fall.

to the the report In the early hours of July 14, the Telegraph surprised traders with a fall of $ 31,550 and was able to regain its position to $ 32,900 that morning.

A recent analysis by James Bennett, CEO of ByteTree, paints a mixed picture of what might be waiting for Bitcoin. According to Bennett, a sharp fall from the $ 34,000 resistance could be a warning to buyers and sellers, while the $ 30,000 to $ 32,000 level still serves as price support.

According to Bennett, the price of Bitcoin stabilized at $ 34,000 after declining miner sales orders and increasing accumulation. He warned, however, that various criteria indicated a reduction in in-network activity. This means that bitcoin is still in neutral areas; An issue that reduces the willingness of key players to invest in the market.

As Bennett said, the volume of weekly bitcoin transactions has fallen sharply since April, reaching a peak of 1.48 million bitcoins from a peak of 2.57 million bitcoins on January 9th.

Analyst: Reducing the volume of bitcoin transactions could be a sign of a declining market
Bitcoin weekly transaction volume chart

As a result of the recent fall in the price and volume of bitcoin transactions, the total value of bitcoin network transactions has reached its lowest level since December 2020 at $ 23.6 billion.

Analyst: Reducing the volume of bitcoin transactions could be a sign of a declining market
Graph of the total value of bitcoin network transactions

Regarding the decrease in the volume of activities within the Bitcoin network, Bennett said:

Bitcoin is unlikely to experience a new uptrend and may even start a downtrend.

The speed of bitcoin circulation reached its lowest level in 195% on July 11 (July 20). Turnover refers to the number of times an asset is traded in a given period of time. This significant decline started from the peak of 593% of the money circulation speed on May 23 (June 2). According to Bennett, turnover speed is a separate indicator of price and measures the dynamics of the network.

Analyst: Reducing the volume of bitcoin transactions could be a sign of a declining market
Bitcoin rotation speed chart

Bennett has said:

In the second half of last year, from July (July) to December (December), the speed of bitcoin circulation was constantly increasing and the price of bitcoin followed this trend. Now that the speed of circulation has slowed down throughout the year, prices have fallen as a result.

On the plus side, it eliminates unhealthy sugary foods from one’s diet. This intra-chain standard has been reduced in recent months following the ban on mining activities in China. The bans were so widespread that many Chinese miners are now out of business or moving to other countries.

Analyst: Reducing the volume of bitcoin transactions could be a sign of a declining market
Inventory chart of bitcoin miners

Bennett said that since the bitcoin stock of miners has almost stabilized and is on the verge of rising, it can be said that miners are accumulating again, and this could indicate the continuation of the process of stabilization of bitcoin prices.

Analyst: Reducing the volume of bitcoin transactions could be a sign of a declining market
Institutional Investor Dominance Chart in the Bitcoin Market

Institutional Investor Dominance Chart shows the activity of 20% of the most held bitcoin investors. The index has been steadily rising since July 1, indicating that long-term bitcoin investors have increased their activity in recent days, when the price was above $ 31,000.

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