Historically, the price of bitcoin is an indicator of blockchain health, with a high activity in correlation often with a strong and positive action. However, the largest cryptocurrency market seems to have witnessed a significant change, the prices now less sensitive to changes in activity on the chain.
For example, the price of bitcoin continues to maintain more than $ 95,000 and seems to be set to recover the level of $ 100,000 despite the sustained drop in blockchain activity. A chain analysis company weighed how and why this is possible for the flagship cryptocurrency.
Why the price of the BTC is less correlated with activity on the channel
Alphractal cryptographic analysis platform common In a new post on X, the main reasons why the price of Bitcoin managed to remain afloat despite the volume of transactions and the active addresses at low levels. According to the company, the price increase in BTC is not necessarily correlated with increased use of blockchain.
First, Alphractal acknowledged that the Bitcoin market experienced a dynamic change when the US funds negotiated on the stock market (ETF) were approved in January 2024. The value of the BTC is now motivated by capital entries through these financial products rather than the blockchain activity.
Source: @Alphractal on X
The chain company also mentioned that the historically low volatility on the market had a major role to play in the low activity of the Bitcoin network. With a relatively little price movement, traders are less encouraged to take new positions, which leads to a lower chain activity.
In addition, Alphractal mentioned that the price of Bitcoin was largely maintained by the activities of speculative merchants through derivatives and other financial instruments. Consequently, there was a reduced daily adoption and a limited practical request for the Bitcoin network.
Alphractal has also referred to the macroeconomic uncertainty that has darkened the global financial markets in recent weeks. According to the chain analysis company, this market condition, even if it improves, has most investors who expect clearer bulls before making a movement.
Finally, Alphracttal has highlighted the volumes of artificial exchange among the main reasons for the price of Bitcoin which remains afloat. “Certain exchange volumes can be inflated, creating a feeling of deceptive activity while the real use of the network remains modest,” added the platform on a chain.
Bitcoin Price at a glance
To date, the BTC price amounts to around $ 96,150, reflecting a drop of more than 1% in the last 24 hours. Despite the action of the prices jerky this weekend, the first cryptocurrency is still up by almost 2% on the weekly time, according to Coingecko data.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Istock star image, tradingview graphic
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