The cryptocurrency analysis company Alphractal has analyzed the reasons why on-chain activity remains below expectations despite Bitcoin prices hovering over $95,000. According to the company's report, despite the optimistic atmosphere in the market, trading volume and the number of active addresses remain at record lows.
According to Alphractal's findings, there are seven main reasons that lead to this situation:
1️⃣ Prices are determined by external factors rather than on-chain usage levels: The current price of Bitcoin is driven by external factors such as institutional capital flowing into spot ETFs rather than actual on-chain usage.
2️⃣ Low volatility: Low volatility reduces the trading momentum of traders, leading to a decline in on-chain transactions.
3️⃣ Artificial stock market volume: The exaggeration of trading volume on some exchanges can obscure the actual level of usage on the network.
4️⃣ Actual demand is limited: The price of Bitcoin is mainly maintained through derivatives and speculation rather than daily use on-chain.
5️⃣The market is in a consolidation phase: Investors tend to wait for macroeconomic developments or clear signals. This limits the volatility of the coin.
6️⃣The popularity of Layer 2 solutions: Layer two solutions like Lightning Network move transactions off-chain, making activity on the main network appear low.
7️⃣ Shift speculative activities to other networks: Networks such as Ethereum, Solana, and Base are attracting intensive trading activities such as DeFi, staking, and memecoins, causing the dynamism on Bitcoin's main chain to decrease.
Alphractal stated that the current situation indicates that Bitcoin is beginning to be regarded as a "financial asset" rather than a "blockchain technology." This shows that the link between on-chain usage and pricing is gradually weakening.
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Despite the rise in Bitcoin's price, why is interest in BTC still low? 7 reasons listed.
The cryptocurrency analysis company Alphractal has analyzed the reasons why on-chain activity remains below expectations despite Bitcoin prices hovering over $95,000. According to the company's report, despite the optimistic atmosphere in the market, trading volume and the number of active addresses remain at record lows. According to Alphractal's findings, there are seven main reasons that lead to this situation: 1️⃣ Prices are determined by external factors rather than on-chain usage levels: The current price of Bitcoin is driven by external factors such as institutional capital flowing into spot ETFs rather than actual on-chain usage. 2️⃣ Low volatility: Low volatility reduces the trading momentum of traders, leading to a decline in on-chain transactions. 3️⃣ Artificial stock market volume: The exaggeration of trading volume on some exchanges can obscure the actual level of usage on the network. 4️⃣ Actual demand is limited: The price of Bitcoin is mainly maintained through derivatives and speculation rather than daily use on-chain. 5️⃣The market is in a consolidation phase: Investors tend to wait for macroeconomic developments or clear signals. This limits the volatility of the coin. 6️⃣The popularity of Layer 2 solutions: Layer two solutions like Lightning Network move transactions off-chain, making activity on the main network appear low. 7️⃣ Shift speculative activities to other networks: Networks such as Ethereum, Solana, and Base are attracting intensive trading activities such as DeFi, staking, and memecoins, causing the dynamism on Bitcoin's main chain to decrease. Alphractal stated that the current situation indicates that Bitcoin is beginning to be regarded as a "financial asset" rather than a "blockchain technology." This shows that the link between on-chain usage and pricing is gradually weakening.