Despite weak blockchain activity, Bitcoin remains held at $95,000 – Analytics firm explains why
Historically, Bitcoin price is an indicator of blockchain health, and high volume of activity is often associated with strong and positive price action. However, the largest cryptocurrency market seems to have undergone a major shift, with less prices now and less responsive to changes in on-chain activity.
For example, despite the continued decline in blockchain activity, Bitcoin prices continue to hold over $95,000 for selling for more than $95,000. A chain analysis company’s way of flagship cryptocurrencies and why it might be possible.
Why BTC prices are not related to on-chain activities
Crypto Analytics platform Alphractal shares in a new post on X that the main reason why Bitcoin prices remained on the ground despite low transaction volume and active addresses. According to the company’s data, the price increase in BTC is not necessarily related to increased blockchain usage.
First, Alphractal acknowledged that the Bitcoin market experienced a dynamic shift when the U.S. Spot Exchange Trading Fund (ETF) was approved in January 2024. Now, the value of BTC is driven by capital inflows from these financial products rather than blockchain activity.
Source: @Alphractal on X
The on-chain company also mentioned that the market has historically low volatility in the midst of low Bitcoin network activity. Due to the relatively small price, traders are less motivating new positions, resulting in lower link activity.
In addition, Alphractal mentioned that the price of Bitcoin is mainly maintained by speculative traders through derivatives and other financial instruments. As a result, the daily adoption and actual demand for the Bitcoin network are limited.
The letters also suggest that macroeconomic uncertainty has clouded global financial markets in recent weeks. According to the chain analytics company, despite improvements in this market situation, most investors are waiting for clearer bullish signals before taking any action.
Finally, the glyph emphasizes one of the main reasons why Bitcoin prices remain floating. “Some exchange volumes can be exaggerated, creating a misleading sense of activity, while real network usage remains modest,” the Chain Platform added.
The price of Bitcoin is clear at a glance
As of this writing, BTC is about $96,150, reflecting a drop of more than 1% over the past 24 hours. The Prime Minister’s cryptocurrency is still growing nearly 2% over the weekly timeframe despite the price drop this weekend, according to Coingecko.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured images from Istock, charts for TradingView
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