NEWSLETTER
On-chain data shows that bitcoin transaction volume has seen a sharp drop from its peak last year. Here's what this could mean for btc.
bitcoin transfer volume has dropped to just $11.2 billion
in a new <a target="_blank" href="https://x.com/glassnode/status/1882467945210920982″ target=”_blank” rel=”noopener nofollow”>mail On x, on-chain analytics firm Glassnode has discussed the latest trend in total transfer volume for bitcoin. “Total transfer volume” here refers to a metric that measures the total amount of cryptocurrency (in USD) that is being involved in transactions on the network every day.
When the value of this indicator is high, it means that investors are moving around large amounts on the blockchain. Such a trend suggests that trading interest in the asset is high.
On the other hand, the metric being low implies that traders may not be paying much attention to the asset as they are not engaging in much trading activity.
Now, here is the chart shared by GlassNode, showing the trend in total bitcoin transfer volume over the past few years:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2025/01/Bitcoin-Volume-Crashes-46-Are-Investors-Losing-Interest.jpeg" alt="bitcoin transfer volume” width=”4096″ height=”2306″/>
The value of the metric appears to have been climbing in recent days | Source: <a target="_blank" href="https://x.com/glassnode/status/1882467945210920982/photo/1" target="_blank" rel="noopener nofollow">Glassnode on x
In the chart, the version of the total bitcoin transfer volume shown is the “entity-adjusted” one. What this means is that the indicator only tracks transfers that occur between different entities, not individual addresses.
An 'entity' is a cluster of addresses that the analytics company has determined belong to the same investor. Transactions between wallets of the same owner are naturally not relevant to the broader market, so adjusting the entities can make the indicator output more accurate.
From the table, it is visible that the total transfer volume adjusted by the entity witnessed a sharp increase towards the end of last year. This rise in the indicator came as the cryptocurrency explored new all-time highs (ATHS) beyond the $100,000 mark.
Investors generally find such rallies exciting, so it's not surprising that the one in the final months of 2024 also garnered a lot of attention.
Since reaching an ATH of $20.7 billion in December, however, the metric has witnessed an extended drawdown, implying that activity has decreased on the network. Today, the chain is processing just $11.2 billion in inter-entity volume, a decline of nearly 46% from the peak.
Investor transaction activity is what provides the fuel for rallies to be sustainable, which is why the slowdown in the cryptocurrency price has emerged following volume reduction.
That said, while the latest volume is significantly lower than the ATH, it is actually still very high compared to history. As GlassNode has highlighted in the chart, there have only been 67 days in the life of btc where the network has seen a greater amount of transaction activity.
btc price
At the time of writing, bitcoin is trading around $105,300, up almost 3% over the last seven days.
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Looks like the price of the coin has been moving sideways over the last few days | Source: BTCUSDT on TradingView
Featured Image by Dall-E, Glassnode.com, TradingView.com Chart
