27 Jun 2022

The Bitcoin network hasn’t been drowsier in a long time

The bitcoin blockchain has gone into hibernation mode as the crypto winter marks its presence.
On-chain (6).svg
We usually see very high on-chain activity during bull markets. This high activity further increases when the market crashes, as market participants scramble to get out of their positions. When the bitcoin price finally stabilizes at a low price, the on-chain activity usually drops to extremely low levels, as people lose interest. It looks like we are in such a period right now.The average transaction value is back at its normal level of around $18k after sitting at the abnormally $37k last week, which was likely caused by the big market movements incentivizing market participants to move their coins into or out of exchanges. As bitcoin has stabilized at around $20k, the spot market has calmed down, and as a result, the large on-chain transactions have stopped.
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Source: Bytetree
The drop in on-chain activity has led to a substantial decline in the daily transaction fees, and they are now sitting at only $312k - their lowest level since June 2020. We also see a massive reduction in active addresses, which are now at the lowest since August 2021.The block production rate is still slow, as the poor profitability of mining has forced many miners to unplug their ASICs. This has led to a significant drop in ASIC prices.Due to the current depressed profitability of mining, the hashrate will likely stay relatively flat in 2022 unless we see a steep rebound in the bitcoin price. In that case, the hashrate will explode since many machines are on the sidelines, and the public miners have massive upcoming machine deliveries.
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