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The key indicator predicts the decline of BTC
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Bitcointhe first and largest cryptocurrency has quadrupled in price since the start of 2023, reaching a new high of $73,798 in March, supported by demand from US exchange-traded funds.
However, crypto analyst Ali’s recent remarks may suggest a worrying trend: a significant one recession in the on-chain activity related to the exchange for Bitcoin.
On-chain activity refers to transactions and interactions recorded directly on the blockchain. This metric could be crucial in understanding the behavior and sentiment of market participants. Increased on-chain activity often correlates with greater investor interest and higher trading volumes, while a decline may suggest the opposite.
As analyst Ali pointed out, Bitcoin’s decline in on-chain trading-related activity could signal a period of declining investor interest and reduced network usage.
As fewer transactions occur on exchanges, this suggests that traders and investors are keeping their assets in cold storage, reducing their trading activity or reflecting a decline in interest among investors.
The decline in on-chain activity may not necessarily be a negative indicator of Bitcoin’s long-term prospects. It could simply reflect a period of consolidation or that of investors waiting on the sidelines amid lackluster activity in the market in anticipation of a big move. However, this suggests that investors and traders are currently less engaged with Bitcoin than in previous periods of high activity.
Bitcoin fell to a more than one-month low due to a lack of news market drivers slowed this year’s record surge.
Bitcoin has tumbled about 14% since reaching an all-time high of nearly $74,000 in March, on the back of growing optimism over the approval of U.S. Exchange Traded Funds that directly hold the largest cryptocurrency. Adding to the gloom are changing expectations for the reduction in US interest rates, which have reduced demand for riskier assets.
Bitcoin fell to a low of $63,300, its lowest level since May 15, during Friday’s trading session, and is now up 0.31% in the previous 24 hours at $64,232.
About the author
Tomiwabold Olajide
Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analyzes and trading predictions on estimated market trends. Tomiwabold graduated from the University of Lagos.