Bitcoin on-chain activity slows even though the memecoin, Runes, dominates 35% of on-chain transactions. Data from Bitcoin Magazine shows that even as Bitcoin surged to a new all-time high (ATH) with two years of positive price action, the number of monthly active users on the Bitcoin network remained at the same level as the price. $4,000.
Bitcoin on-chain activity slows, fails to fuel BTC's gains
The Bitcoin network records 35% of transactions from Runes or memecoins on the chain. Runes is a protocol that allows for the creation of fungible tokens on the BTC blockchain. Unlike the BRC-20 and SRC-20 token standards, Runes do not rely on the Bitcoin Ordinals Protocol.
These assets dominated on-chain activity, transaction count, and volume on the Bitcoin network in April-May 2024. Since then, their contribution to the Bitcoin blockchain has declined.
According to data from Galaxy Research, Runes now account for 35% of the more than 99 million transactions on the chain as of January 1.
Of the remaining transactions, financial transactions and BRC-20 token standards account for 60%, 4% can be attributed to Ordinals transactions.
Bitcoin Trading by Type | Source: Galaxy Research
Data from Bitcoin Magazine shows that even as the largest cryptocurrency by market cap has seen positive price action for two years and surged to a new ATH, the monthly active user level for BTC has been consistent since the price was below $4,000, showing the lag between Bitcoin's price increase and its on-chain activity.
Bitcoin Active Address Growth Trend | Source: Bitcoin Magazine
Bitcoin Could Surpass $58,500 Low Before Moving Higher
Bitcoin is currently in a multi-month uptrend. The price is likely to clear liquidity at the support level of $58,526, the high of July 12. Bitcoin will extend the rise to the resistance zone between $69,582 and $70,117.
Bitcoin's target is $70,000.
The MACD momentum indicator shows the signal line crossing above the MACD line, signaling that the underlying trend of Bitcoin is negative. BTC is likely to clear liquidity at its support level and the MACD supports this argument.
BTC daily price chart | Source: Tradingview
Bitcoin could find support at $53,485 in case of further correction.
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