Amidst a backdrop of subdued market activity and a complex macroeconomic landscape, Bitcoin’s (BTC) price has succumbed to prevailing bearish pressures in recent weeks.
These forces have driven the cryptocurrency to relinquish the psychological support level of $26,000 once more, marking a significant setback for the premier digital asset.
The negative sentiment surrounding BTC has also been reflected in its on-chain activity. Notably, Bitcoin’s on-chain transaction volume witnessed a significant drop to a 3-year low, crypto behavior analytics platform Santiment highlighted on August 28.
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What does this signal?
This on-chain data is based on the number of BTC peer-to-peer payments, exchange deposits, and withdrawals, as well as miner expenses, Santiment added. While the decline doesn’t necessarily signal bearishness, it “certainly indicates trader FUD.”
In crypto, FUD refers to “Fear, Uncertainty, and Doubt,” representing negative sentiment or rumors spread within the crypto community that create doubt and anxiety about a particular asset or the market as a whole.
As can be seen from the above chart, the drop in BTC network activity represents a substantial decrease of more than 90% since its peak in mid-2022.
Bitcoin price analysis
At the time of publication on August 29, BTC was standing at $26,013, reclaiming this important threshold in a volatile 24-hour period.
The biggest crypto coin’s price remained almost unchanged over the past week, although it lost over 11% on the monthly chart amid a broader market downturn.
Further Bitcoin declines?
Meanwhile, in his Monday analysis, cryptocurrency analyst Ali Martinez warned that BTC may not have bottomed yet, citing historical data related to the Proof of Work (PoW) Floor Pricing Model.
According to the analyst, this level currently sits at $14,800, indicating a potential downside of over 42% compared to the cryptocurrency’s present price.
This model refers to a concept used by crypto investors and analysts to determine potential price floors during bear markets; however, a drop to $14,800 would be strongly opposed by a robust support level at $20,900, Martinez explained.
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