The data shows that the bitcoin bear environment has left the market dormant as transaction fees are extremely low.
Bitcoin on-chain activity remains low as price action remains stale
According to the latest weekly report from Arcane Research, the past week saw the lowest average daily transaction fees since April 2020.
A “transaction fee” is an amount that senders have to attach to their transactions when transferring them on the bitcoin blockchain.
It is one of two sources of revenue for miners (the other is fixed block rewards), and therefore, they usually handle transactions with higher fees first.
The BTC network has an upper limit for how many transactions can be made in a day, and thus whenever there is a large amount of investor activity, the chain is closed.
Investors who don’t want to wait for their transfers tend to have higher-than-average fees attached to their transactions.
Some other investors may likewise now try to weed out these senders who charge higher fees and thus blow the average fee.
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However, in times of low activity, there is no incentive for investors to opt for higher fees and the average remains low.
Now, here is a table that shows how various metrics related to the bitcoin network have changed during the past seven days:
The value of the fees per day seems to have plunged 10% over the past week | Source: Arcane Research's The Weekly Update - Week 26, 2022
As you can see above, the daily transaction volume has been around $4 billion recently, up from typically $6 billion during the previous year.
Bitcoin fees have fallen by more than 10% per day over the past week as the value of the metric is now around 279k. This average daily charge is the lowest since April 2020.
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The historically low activity on the blockchain during this bear market is likely due to stale price activity that is causing investors to lose interest in crypto.
The number of active bitcoin addresses has also remained undervalued over the past week, the report said.
At the time of writing, bitcoin price is floating around $20.1k, up 0.3% over the past seven days. In the past month, crypto has lost 33% in value.
The chart below shows the coin’s price trend over the past five days.
Looks like the value of the crypto has surged up over the last few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Arcane Research