There has been a significant decline in on-chain transaction volume and wallet mobility in the Bitcoin network since 2021. While there have been serious declines in the number of daily unique wallets and new wallet formations in the last five years, market experts interpret these developments as a sign of a decrease in speculative demand and maturation in investor behavior.
Decline in Network Activity
According to data shared by Santiment, the daily number of unique wallets transacting on the Bitcoin network has decreased by approximately 42 percent in the past five years. In the same period, new wallet creations decreased by 47 percent to approximately 291 thousand per day. According to current data, around 650 thousand wallets now interact with the network daily, and this figure is significantly lower than the peak levels in the 2021 cycle.
Pressure in the Market, But No Crisis
Glassnode’s analysis revealed that despite falling activity, the market was experiencing pressure similar to past cycles. While the Bitcoin price was at $67,000, unrealized losses amounted to 19 percent of the total market value. Data shows that a loss of this magnitude has been seen before during sharp correction periods in May 2022.
In Glassnode’s statements, it was stated that “The current market pressure is parallel to the trend seen in May 2022.”
In the past, similar levels of losses have been observed as a sign of selling waves or the final stages of a bear market. However, in the current situation, there is no extreme panic or mass loss of interest compared to previous cycles.
Small Investors Accumulate, Cautious View of Medium-Scale Wallets
In Santiment’s analysis based on wallet groups, it is seen that the trends between different investor segments differ. Total assets in wallets holding 0.1 to 1 BTC reached the peak of the last 15 months, and an additional accumulation of 1.05 percent has occurred since the record price level on October 5. This indicates that small investors consider price declines as a buying opportunity.
In Santiment’s statement, the statement “Wallets holding 0.1-1 BTC reached the highest level of the last 15 months and continued their additional purchases” stood out.
In contrast, the total balances of wallets holding between 1 and 10 BTC fell to the lowest level in the last 38 months. While there was a 0.49 percent decrease in this group, analysts state that medium-sized investors took cautious positions in the recent fluctuations.
This mobility is a typical process of the market cycle; It shows that while larger investors are reducing their positions, small-scale participants are starting to absorb the supply in the market.
Looking at the overall picture, it is noteworthy that the number of transactions and new wallets on the Bitcoin network has decreased significantly after the high activity period in 2021. However, this calm is seen as a result of less speculation and strengthening of longer-term investor behavior rather than a weakening of the Bitcoin network.
Latest data indicates that the Bitcoin market is experiencing a consolidation phase where noise is reduced, movements are more structured and investors tend to protect their long-term positions.
