Bitcoin Forum

Had anyone noticed how drastically decreased the number of Bitcoin transactions in last 2 months?  In last 5 years with the exception of 2018 Bitcoin had between 9 million and 10 million transactions every month. In April and May there was around 8 million and this month seems to be even below 7 million. There was no such bad month in the last 4 years. Is this a clear sigh we are already yin bear market or reasons are more fundamental and more serious for Bitcoin than just price and speculation.

Can't that just be a sign that people are just holding? Not many people buying but no many selling either. In fact, rather than a bear market, we have been moving sideways lately, which has been good for sending transactions with cheap fees.

That might be one of the reasons however some more thorough and deeper analysis should be carried out to get to more precise answer. Also, transaction fees are not higher comparing to previous period so why such decline might remain slight mistery but the real reason at the end might be quite simple.

It's probably because of the high price of bitcoin and everyone starts to hold their bitcoins and started to be firm in holding. There could be more transactions in the past years but it also includes the small transactions.

With the news that we've got lately for this bull run, there has been millions worth in a single transaction and maybe those tx's have been merged and that's one factor why it's lessen in the last two months.

So far I'd say it seems pretty clear we're not in a bear market, just a cool off period of the bull market, so I wouldn't worry about a bear market unless the price tumbles down to like $20k.

I'd say a mix of people are holding, there's more third party networks (ie Paypal) operating with Bitcoin now which means there are many more transactions happening for each on-chain transaction that there used to be, and also after a big price fall txs tend to clear up as well.

Wouldn't think it's anything to worry about.

Alot more internal transactions I think and fees are very discouraging to activity, I'm never too bullish on BTC when fees get silly because Im determined the mainstream and quite ordinary budgets of the masses are far more important then the latest statement from Elon.
   I'd say its a reflection of the price and maybe the percentage of speculators.    Consider the amount of BTC being held inside a fund which then resells that unit of ownership and adds a management fee and so on, its no longer an on chain transaction at that point.   We certainly do have an ongoing trend of mainstream FIAT involvement or put simply holders.   I'd rather crypto activity rises but it wont be linear how we develop.

Very possible, we also saw this kind of action of Bitcoin for multiple bear markets we experienced.
If this is already the bear market, I am glad that we are still far from the all-time-high of the previous bull run which is around $19,000.
Which is that is a very good thing, it's kinda Bitcoin as time goes by becomes more mature and less volatile.

It is not drastic decrease and it is like before the new year when price was stable like today. There are a couple of factors that always contribute to the number of transactions and the main one is the price change. Price doesn't necessarily have to go down to decrease the number of transactions it has to stay stable and right now price is moderately stable so people are staying away from trading which means their bitcoins are already withdrawn from exchanges and are in their wallets not moving hence less on-chain traffic.

Another big factor is the shitcoin market pump and dumps. The past month we saw the huge altcoin dump and then their slower decline which practically ended the pump and dumps for now. Again this means that traders pulled their bitcoins out and are not going back again. Bitcoin stability and altcoin dumps means that they are also not going in and out between the two markets hence a lot less on-chain transactions.

P.S. Price being stable is NOT called bear market!

Maybe the holders of bitcoin are holding so hard, as you see usually those with big capital invest in bitcoin instead of altcoins and probably because people who
make small amount of transaction choose to use other altcoins because of the fee.Remember that bitcoin in 2018 was frequently used for paying things online, now most of payment gateway also accepts other cryptocurrencies that are cheap in fee
so it could boost the number of transactions but I really doubt it's because of bearish market.

Transactions and volumes are down in the last month or so. I think this has to do with it being Summer. Generally markets trade sideways in the Summer hence the term "Sell in May and Go away!".

Everything is down, transactions for both ETH and BTC. Trading volumes are down. Open interest is down for derivaties. The futures premiums are completely flat. The amount of search terms for crypto and twitter posts are also down.

Who knows. It might be like 2013, where it peaked in April and then bottomed in July while making a new ATH back in November.

How the hell did the number of transactions relate to a bear market. Decreasing transactions just simply means that less people are exiting the market, and the same could be entering. It just simply means they've either left for good, or are holding, and seeing as the price isn't really dumping, it's more likely that they're actually holding it and are just waiting for price to actually change. I mean, would you, as a trader, go in and out of a market that is currently stable? That's just a plain waste of money to pay for fees if I do say so for myself. I guess interest is completely flat since there hasn't been any changes, but no interest doesn't equate to a failing market.

It’s a CRAB MARKET! The price is “crabbing” from side to side. It’s probably an indication that buyers and sellers have reached an equilibrium. Buyers bid low and don’t want to FOMO, then sellers bid too high and want to sell higher for a better deal. Market might also be in “pre-FOMO”. 8)

The lower number transactions means that more Bitcoins have been concentrated in the hands of less people/companies.More people and companies have decided to just HODL their Bitcoins,instead of sending them here and there.Another major factor are the increased transaction fees.
Anyway,having less transactions also means that mass Bitcoin adoption isn't going anywhere and the crypto community simply isn't growing.This is disturbing...

Actually, fees have hit rock bottom yesterday and we still had empty blocks so, no fees aren't the problem anymore, but individual usage is indeed declining.
And I'm saying individual because while the number of tx has indeed dropped to the lowest since 2018 there is another way of looking at things:

https://i.imgur.com/Jfrbpwc.png

While outputs have also dropped a bit, they are still a lot over 2018, close in line with 2020, so it means that the growth is coming from people and services making multiple payments and once back in 2018 we had an average of 4k per block now we're at 6k.

Anyhow usage was already going down, maybe now that LN has gained a bit of attention with the Salvador news we might see merchants adopting it even in other parts of the world, otherwise, in one two years, probably 90% of all the tx will be in and out of exchanges.

I find this normal. The bulk of transactions is related to trading bots. If everybody is waiting for something to happen (i.e. a recovery near the last ATH), the number of transactions cannot be too high.
And there's something else too: centralized exchanges and wallets learned to send in bulk. This means that you may get to maybe 5-10 times less transactions, but fatter ones.

This might mean that people are looking forward to the days in the near future when Bitcoin would once again rise past $60,000. It means people don't want to spend now because the price is still very low. They probably have much confidence that the price would still make it beyond the recorded ATH within the year. Why would they spend their Bitcoin at $39,000 when weeks from now it could once again get back at $60,000?

Traders were crushed when coins dropped from 64k to 31k

billions of dollars of wealth were lost.

So my guess is the degenerate traders were tapped out and thus movement has slowed.

Also smart traders are able to hodl coins that are down.

Ie purchased at 50k down to 40k if you hodl you have not lost.

So you tapped out the traders that were nuts.
only smart traders are left that took a break and are hodling.


I ladder buy and sell.

I have buys at

31031
30030
29029
28028
27027
26026
25025
24024
23023
22022
21021

and sells at

55055
56056
57057
58058
59059
60060
62062
64064
66066
68068
70070
72072
74074

and i hodl a lot off the exchange

i have not done many trades sonce we are in the middle zone

32k to 55k

Probably people are not buying things with bitcoin yet and they only hodl because the prices are still going low and they might want to hold on to it for awhile not doing anything with it for now.

We're all here having assumptions here but there's no accurate answer that I found above.

The reason could be;

• Traders might trap when there's a sudden correction of the price and prefer to Hold their asset on exchange
• At a low price, everyone prefers to hold than spending it
• Know how to send bulk transaction or start using Light Network
• It's summertime, and time to have a break in trading

If you will see, mostly when the price was dumped no one will cash out or trade their Bitcoin.  It's a sign that they keep holding their assets and didn't get panic sell even there's a FUD that keeps spreading.

The rate of transactions is not necessarily related to the price. There are many things that have changed since 2017, for example:
 - The increase in transfers outside the network: This case includes the lightning network and all the ways that lead to the closure of currencies.
 - Increased transfers within centralized platforms: such as Binance, Coinbase, PayPal and others.
 - Bitcoin fees are higher compared to altcoins.

all above will make people not using bitcoin main chain

Directly proportional to Holding.

People are not giving a shit about tweets from influencers, They are trusting the instinct that crypto is the future and in long term, they will earn great profits. No matter what happens in a few weeks or months in the long term crypto is everything.

People are just holding and holding and holding. (at least the people I know)

Regards

You must have a very deep pocket to be able to do this and make a significant profit. I used to trade with USDT-BTC and attempted to do this also. I later on realized I shouldn't have even started it. I came out short of funds, either BTC or USDT. I found myself hanging at a certain price that left me no more step to make. Had I done this when the price of Bitcoin started rising from $20,000 to $60,000 and then falling from $64,000 to $30,000, I still would've ended up stuck in the middle.

Then who are those selling that keep declining the market. If I'm not mistaken, the whale just manipulate, they don't take part in the day to day trading. They could just make one of few trades that'll cause panic in the market then the retail investors begin selling their bags to either secure profit or minimize lost in anticipation of buying cheaper as the believe the price is to decline further.

I won't be too quick to come to a conclusion on what this development is trying to say as it could mean many things. Lets not forget people equally hold there coins on exchange so their activities within the exchange can't be monitored as it doesn't get recorded in an open ledger (blockchain)

Perhaps I'm a bit weird since I think it's the exact opposite ^{[it led to fees going down drastically as well]} :)
^{- Based on all of the previous ATH moments that were followed by crashes of that extent [purely based on what I've experienced and could recall], I expected this to happen and it did [quite normal].}

I conclude that the number of bitcoin transactions decreases every month as the number of holders increases, whether it's just buying it at the current lowest price or at the highest price then both are very optimistic that the market will recover soon, for me it's a positive thing because people can control themselves from FUD and they know the market is being manipulated by big whales.

Some people have taken profits from trading at all time high prices and they are back to hodling BTC and cooling down, number of transaction was showing record low in last few weeks
and good thing about that is that we can pay much lower fees and consolidate our coins more, but it all looks to me like a quiet time before a big storm.

I think he meant that AFTER the fall, like after the fall price didn't went down any longer so it is only the people who are holding that is left. Which makes sense, when the volume is down it is the volatility that is down and not the price, because there are tons of people who would not sell under 30k whereas not as many people who would sell over 50k, so the drop makes sense and staying here makes sense at the same time as well.

I do not know what is going to happen in the future, I never do, but I will not make my decision based on volume for sure, it is not a good indicator, there are tons of other indicators to go with and volume is not one of them. What does it give you, people not buying/selling? I mean it does mean people are not buying but as much as that we also have people are not selling at the same place as well, if it was a high on selling then the price wouldn't be up now and sellers would drop the price to sell more and more, so it is just... stable now that's it.

 Its very obvious why it happened on this month because after the hard fall a bunch of ppl hide at the very stable coin in the market wherein probably until now since market still not showing good progress..  And for me this situation cannot be compared from the history of bitcoin itself in my personal opinion, because there's a big difference to be honest and seems this the most worst situation because of being so stagnant since the massive decline ended..

Perhaps a lot more people are turning into long-term hodlers? That or very few people have been really utilizing bitcoin for transactions. The latter is understandable considering how ‘expensive’ bitcoin transfers are if we were to convert fees to USD, which a lot of people have been doing since the rise of bitcoin’s price. Either way, a periodof decline on network activity usually happens after price crashes, so it could be hinted to that—but of course we’re not entirely sure.

That's the thing that makes this more "interesting" let's say!
For the first time this year, we had an empty mempool, for the first time we had 1sat/b tx getting confirmed during the week and not just on weekends with half-full blocks being mined sometimes for almost an hour.

I don't know if you can label all of them long term holders and I assume a lot of them are just waiting for a moment to cut losses or just to rake in a small profit but at the same time, I bet a lot of this new generation holders are not keeping their coins in their own wallets, leaving coins on exchanges or custodial wallets to have them ready to dump probably so less traffic back and for between wallets.  Oh, and I know people have kept saying that the number of coins on exchanges has declined but that is only true if somehow you're able to monitor all addresses an exchange has and to date, nobody has been able to that even for Coinbase alone.

Funny though, now you can buy a cup of coffee with 4 cents fee but....nobody wants coffee anymore!

Yeah, all signs definitely point towards a bearish season for BTC.

The macro conditions are somewhat deteriorating as well. Stock prices have dropped somewhat in terms of the Dow's adjustment, and commodity prices such as gold and silver have also dropped significantly.

Investor sentiment overall has pulled back drastically with prospects of continued future pumps a lot more slim. Be wary and on the lookout for cheap coins here.

Stock prices barely dropped due to the FOMC. Today we had a gap down on the stock indicies because SPY and Dow30 ETFs had a dividend so thats why it dropped a large amount. The bigger drops were with Gold and Silver. However bitcoin seems to have taken a bigger drop.

This is bearish because it sets a bad sentiment. People are assuming inflation is not bad as they assumed and people are buying the dollar again. The dollar was very cheap and people want to get in now before it goes higher and higher. So bitcoin is suffering as a result.

Who knows. Maybe next week this entire move can easily reverse and we can be at ATH in stocks and BTC might go back >$40K again.

Several good possibilities already pointed out. Maybe someone should compile them. The Hodling maybe a reason. For example, The inertia of not having sold at ATH and then waiting for the ATH to even use Bitcoin for things you normally were doing already, i something that actually happens.

One thing that I feel is contributing is the decrease is shifting of crypto investment scene towards centralized coins and several other platforms. These "projects" keep mushrooming beyond anything we expect. After the bloodbath of ICOs, you'd think that people would learn their lessons and not throw money on repetitive, clearly scam projects on centralized chains. Seems that I am wrong. Psychology and greed works differently. People still continue to put money into these shady projects and keep getting rugged.

It doesn't matter to them as long as they can sell their tokens at a higher price within a few days. They then move onto the next one with hype. This has become a rinse and repeat for devs as well as communities. Its literally madness and it shows no signs of slowing down.

Earlier, If you had to put money into these projects, you needed BTC. Now, these people are content taking up any token as long as they can find liquidity for that in Uniswap. Hayden maybe pretty proud of his unicorn but I think the time isn't far when regulators will come down pretty heavily on the AMMs that are enabling these pump and dump schemes.

Didn't notice it but I was expecting mempool to fill up after the last difficulty adjustment (13 or 14% was it?) but could still send 1 sat/byte txs and they went through fine.

Not sure if anyone mentioned, didn't scroll every page but maybe it's also layer2 eating up some of those txs? Lightning use with the Arnhem bitcoin city merchs have been slowly picking up after a huge drop during Covid lockdown (shops finally open again in past couple of weeks). Small nett effect I guess but maybe but that plays a role? Is it possible also more people sending each other on consumer apps that are off chain?

This could be that more investors are holding other than selling off their coin. I would really be a surprise package to see how many people were patient enough buying and holding the dip. At this phase of the market you wouldn't expect transactions to flow in as supposed there must certainly be a decline in volume waiting for an uptrend to begin again.

Actually if you notice that prices of Bitcoin were not too much high in the past say in 2016 it was just worth $900 only and people were making transaction at that time and fees was also low.But now the case is different as the prices are still above $35k and people are preferring to hold instead of spending them in hope of getting high profits and learning from past experience that btc could hit $100k or so.This might be the case along with other factors like use of Lightning network and making off chain transaction or using single transaction to make multiple payments covering fees issue also.If we talk about this year then many memecoins or say shitcoins were in the hype under some influence due to which btc market saw a drop in trx rate as people were converting btc to other altcoins to make profits without any knowledge blindly.So these factors might have jointly cause this fall in TRX rate.But soon with btc being adopted by major population then it will rise eventually.

The number of transactions is declining because the prices in the market have also declined too much. People seem like they started waiting for better times to sell their coins.

It is a sign that everyone is holding their coins most probably in exchanges and waiting for the market to move in either direction.
If you want to have a conclusive study you need to check the liquidity and volume of trade in exchanges as well along with the volume of transactions and if the volume is high in exchanges and the liquidity is low then we can assume that the bear market is approaching but the decline in number of transactions does not necessarily mean the bear is near.

Yeah, as several members here said. I personally also think that this is because many people are holding BTC right now due to the crash price.
I am personally also doing this because the price of Bitcoin is still down while I got some of the BTC while above $45. So keep holding is my own way. ANd maybe there are so many people who are doing the same.

And moreover, many parties are also holding BTC because they know what will happen in the next months? You know, there is so much FUD spreading at this time, isn't normal? Or probably there are some certain purpose about it?  ;D >:( 8)

This seems to me to be the most likely explanation, a lot of those that were willing to trade their coins got completely destroyed by the correction we saw and the rest are just long term holders that are not interested in trading their coins and give them away to the whales, however we are not going to need to wait that long to know which side is right as if we see a further decrease in the price then this could mean there is a negative trend when it comes to adoption, but if the price goes up then this means that people were being conservative and simply taking care of their coins.

The decline of Bitcoin transactions may be caused by the bad trend in crypto market lately. People who are holding Bitcoin, prefer holding it to selling it at a cheap price. While people who want to buy Bitcoin, are waiting for a sign for the market recovery. Unfortunately, there are too many bad issues, so they don't want to buy and decide to wait for. This situation makes a lower interest to sell-buy Bitcoin in the market.

A lot of fuds circulating around is a proof that people are holding their bitcoin to avoid more losses if they continue to sell and it's actually helping to avoid stacking more transactions and look how fast it is to send and receive bitcoin with the uncongested blocks? Elon Musk is one of the example that lead the market to make fuds that would eventually dump the bitcoin price but people aren't fan of people who manipulate the market and is taking advantage to those small traders that's why they were against to Elon tweets but there are some people who still follow him but we can't do anything about that it's their choice.

This is just natural revolution, they have lost nothing till they sell so the question is why were they forced to sell and if its by their own hand then we cant really blame crypto for their losses but themselves.  Usually its about leverage and trading multiples of what they have the ability to own in that time, if I see a frothy market I know these people are always going to get caught out because its just so tempting to act this way but no money is free there is a risk and cost to their actions.
   Long term we have a net bias upwards and positive gains from utility and the help that BTC can give to people across the world to enable commerce that might not otherwise occur and save people especially in countries without any stable currency.   I can remember Zimbabwe (https://mises.org/library/zimbabwe-best-performing-stock-market-2007) blowing up its currency before BTC was around, people were devastated the ordinary poor and workers which is most of us.  Without a stable way to exchange value it reduces all business and harm occurs so they had to resort to grams of gold which is really not practical to carry out and the prices to do this were horrible, something like 1 gram of gold for a bundle of bread.  BTC is not just a play thing, it can help people and I hope it continues to improve this far more then I care about the absolute price moves, alot of transactions are speculative based but actual business settled matters most.

I can think of few reasons that may explain this decline in number of transaction:
- Recent sudden price drop: those who bought bitcoin during the bull run will have to wait till the price start increasing again.
- Current price stability: due to price stability, traders switch to other more volatile altcoins.
- Lightning Network: the number of Lightning nodes has doubled during the last year alone. It rose from ~5000 nodes to more than 10.000 nodes.
- Internal exchange transfers: due to the network high fees, most users make their transactions off-chain through exchanges.
- WBTC and alike.

At least this is a good opportunity for bitcoiners to enjoy low transactions fees and fast confirmations.

^^ The last point is important I think in that a proper market has to have an advantage to the lower prices as well as the higher prices.   People gaining or losing on their trades does not matter so much as the underlying gain by actual regular users so it cant be stated enough that lower fees and the lower pricing to BTC even could raise genuine interest from longer term user base and that is why Bitcoin does not collapse as so many have predicted so often.    Same deal could be applied to almost anything, especially commodities in that somebody has to have a use for that product and ideally they are gaining when the price is dropping so in that market there is a buyer and a seller and somebody is always winning hence we continue and longer term Bitcoin prospects remain on track imo.

I remember back in 2014 when the mempool was near empty, you never had to check what fee to use. The default fee everybody used back then was 10000 sats. Which at $200 a coin was like 2 pennies. I would basically do daily withdraws from my exchange, sometimes for small amounts less than $100.

Would send it back and forth pretty much, never had to worry about fees. Now 7 years later I rarely do any Bitcoin transactions. If I want to move across exchanges I use alts like LTC. Before I used to use ETH but those fees are also high from time to time.

And I am pretty sure many other people do the same, hence the reduced transaction volumes goes down. $20 a fee might be cheap sometimes but when you think of it, look how much stuff you can buy yourself for $20. And the fees add up. It’s not normal paying $200 a month just to do a few crypto transactions.

Instead of being worried about the things we do not control people need to take advantage of the situation with the mempool which is almost empty, this is the opportunity to make all of those transactions that you wanted to make but you were unable to because of the huge fees you had to pay, after all for months the mempool was busy as hell and people were complaining about it and now that it is empty people are complaining about it once again and not doing anything to take advantage of it.