There is good news and bad news for traders monitoring onchain data for signs of a market recovery. The number of daily transactions has been increasing for months, suggesting that BTC is not used solely for speculative purposes. The daily trading volume is still sluggish, but another bull cycle is still a long way off.
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BTC hands over 350K transactions per day
The average number of daily transactions in the Bitcoin-Core blockchain has been steadily rising since mid-2018 and has recently exceeded 350,000. Except for a wild day at the end of 2017, when BTC recorded a record 490,000 transactions, and in the opening weeks of 2018, when major spikes occurred, Bitcoin sees more sustainable usage than ever before. Since Lightning Network exempts a small but growing number of transactions, along with Liquid, Blockstream's resolution layer, the actual number of onchain transactions is otherwise even higher.
Network usage is not necessarily correlated with price. Often, a blockchain sees continued transaction growth while price stagnates. With all the use the BTC chain is experiencing, it remains trapped in an $ 3,400 to $ 3,700 area. A look at the trading volume shows that for months there was no noticeable upward trend. The year 2019 started cautiously with an average of 50,000 BTC per day – far from the end of 2017, when hundreds of thousands of Bitcoins were traded daily.
BTC fees are currently low
BTC fees had not been a topic of conversation for months, as there was not much to talk about. A BTC transaction can currently be made for around $ 0.25. Although it is almost 50x higher than the average BCH fee, it is still low enough to retain the majority of network users' content. However, BTC users should not expect permanently low fees. As 2017-18 data from Coinmetrics showsAverage BTC transaction fees tend to lag behind average transaction numbers. In other words, it is possible that the increasing number of BTC's daily transactions may cause fees to rise in due course.
Regardless of the direction BTC's billing market takes, continued use of the protocol for its original purpose – sending P2P electronic money – is a good fit for future adoption and pricing. Combined with ongoing behind-the-scenes development work that makes it easier for users to send and receive Bitcoin with confidence, this means that the next phase of growth may be driven by more sustainable fundamentals than speculative mania alone.
Do you think that increased network usage correlates with market prices? Let us know in the comments below.
Images courtesy of Shutterstock, Blockchain.com, Coinmetrics and Bitcoinity.org
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The first BTC transaction hits after 1-year highs, but the volume remains sluggish, first appeared in the Bitcoin News.
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