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Perfect storm brews for Bitcoin as on-chain transaction value drops to a 3-month low

Perfect storm brews for Bitcoin as on-chain transaction value drops to a 3-month low

On Wednesday, December 22, an intriguing indicator in terms of total Bitcoin (BTC) transactions surfaced following the digital assets’ recent substantial inflow.

Evidently, Bitcoin’s on-chain transaction value has fallen to a three-month low based on the hourly chart seven-day monthly average, according to the most recent data given by on-chain metrics platform Glassnode.  

Bitcoin transaction volume in BTC. Source: Glassnode

Glassnode tweeted:

“Transaction Volume (7d MA) just reached a 3-month low of 124,802.190 BTC. Previous 3-month low of 124,858.013 BTC was observed on 02 November 2021.”

Bitcoin’s trading volume below $6 billion

Interestingly, the transaction volume equates to just over $5.94 billion on the dollar chart. It’s worth noting that the last time Bitcoin’s transaction value was this low was when BTC was trading over $61,000 and just a week before it reached its all-time high.

Bitcoin transaction volume in USD. Source: Glassnode

What is particularly noteworthy while the transaction volume hits a three-month low is the fact that the Bitcoin market is in a struggle between bulls and bears as the leading digital assets aims to break above the crucial $50,000 barrier.

Indeed, Bitcoin is now experiencing different supply trends as it appears long-term holders are holding and accumulating, and miners are accumulating, according to the latest market data. Furthermore, Bitcoin supply is transitioning from a liquid to an illiquid state at a pace of 100,000 BTC each month, as seen in the chart below.

Bitcoin illiquid supply change (30d Moving Average). Source: Glassnode

Glassnode noted:

“Illiquid coins are those sent to an address with little history of spending, generally associated with investor accumulation, and bull market buyers.”

Bitcoin needs to break $50.5k to be bullish

Elsewhere, prominent crypto trading analyst Michael van de Poppe highlighted that leading cryptocurrency needs to break above $50,500 to say that we are back in bullish territory he stated:

“The first breakthrough has happened on Bitcoin. But, we still need to break enough levels to state that we’re bullish. Overall, a breakthrough at $50.5-51.5K and I’m convinced. Also, 2022 should become a great year overall.”

Currently, the flagship digital asset is trading at $48,699, up 0.05% on the day and 2.24%over the last week, with a total market cap of $920.8 billion.

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