The latest on-chain data for Bitcoin shows a decline in activity levels. Data shows that the number of Bitcoin daily transactions has fallen to around 217k. This figure was last seen in August 2018.
The drop in daily transactions is in tandem with its drop in price. Since it last tested highs of $64k, Bitcoin has lost about 44% of its value and is currently in a range between $36k and $40k.
Besides the daily transaction activities, the number of active Bitcoin addresses has also fallen sharply. As of Sunday 6th May, the figure stood at 940k. Similarly, the number of new BTC addresses has also seen a drastic drop and now stands at 372k a day.
A combination of declining volumes and the price has also impacted Bitcoin’s on-chain volumes. At the moment, transaction volumes have dropped by 55% to $7.7 billion, from highs of $17.3 billion.
The drop in the on-chain transactions is a confluence of multiple factors. One of those that stand out is the high transaction fees. At its recent peak, transaction costs for BTC transactions had shot up to $53.
That’s quite high and has pushed transactions into alternatives such as altcoins and stable coins. The number of exchanges that are allowing for direct transactions in fiat, stable coins, and alts. This has lowered the reliance on the leading crypto asset for on-ramping.
However, the drop in BTCs on-chain transactions has positively impacted transaction costs. At the moment, transaction fees are also down by 87 percent, from a high of $53 to about $7.