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Bitcoin Enters Hibernation Mode As Network Activity Lulls
Bitcoin has seen a tremendous slow down in network activity following the market crash in mi-June. This drawdown was expected as a reduction in network activity usually follows a rush to get out of the digital asset during the decline. This lull has brought various metrics back towards normal territories and daily miner revenues remain drowsy during this time.
Network Activity Slows
After the price of bitcoin had crashed to $17,600, there was a rush to get out of the digital asset. This had led to a tremendous surge in network activity. Average transaction volume had shot up from around $18,000 to $37,000 during the past week as volatility rocked the market. Mostly, these moves were triggered by fear that the price of the cryptocurrency would continue to decline.
Related Reading | Holding Back The Bears: Why Bitcoin Must Break $22,500
However, as the price of bitcoin has stabilized, the network activity has begun to return to normal levels. This is seen in the average transaction value for this week which has fallen by almost 50% to return to the $18,000 level. Additionally, on-chain activity has now dropped so low that it has now entered what is referred to as a hibernation mode.
Transactions per day on the network have also declined with the stability returning back to the market. This number had been at 252,382 on average for the past week but now sits at 242,737 representing a -3.82% drop.
BTC price declines to $19,000 | Source: BTCUSD on TradingView.com
The same has been the case for the total daily transaction volumes. While investors had scrambled to exit their positions, daily transaction volumes had risen to more than $9 billion. However, with bitcoin stabilizing at around $20,000, this value has dropped to $4.4 billion, a 51.75% change from the prior week.
Bitcoin Miners Take Hits
Bitcoin miners have been one of the worse-hit when it comes to the changes that are happening in the market. An example is the daily miner revenues that are being recorded for the last couple of weeks. It had declined significantly in the month of June, and there has been no recovery in sight.
The prior week had seen daily revenues touch $18.3 million per day, and with the last week, there has not been much change. A 2.02% rise meant that daily miner revenues rose to $18.69 million, while the percentage made up by fees dropped by 0.7%.
BTC hashrate declines | Source: Arcane Research
It is also shining through in the hashrate which has also taken a bit of a nosedive. After hitting a new all-time high earlier in the month, the decline has been apparent so far. It is a direct result of decreased profitability, affecting the block production rate.
Related Reading | Bitcoin Records Worst Performance For June, Will It Get Better From Here?
The number of blocks produced per hour last week came out to 5.85, and since hashrate is expected to remain depressed due to low profitability, there may not be much recovery in the block production either. This decline has also translated to lower ASIC prices.
Lastly, fees per day also dropped significantly during this time. After touching $437,159 in the prior week, a 28.59% drop saw fees per day for last week come out to $312,191.
Featured image from Finbold, charts from Arcane Research and TradingView.com
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