Nobody Wants to Sell BTC, Analyst Says as Bitcoin's On-Chain Activity Limps

Bitcoin's (BTC) price recently rose to new record highs above $70,000. Still, the real economic activity on the Bitcoin blockchain is limping along, not sprinting.

The divergence partly represents strong holding sentiment in the market, according to one research firm.

"Average on-chain transfer volume (USD Denominated) is well below the 2021 bull market peak. Hardly any value is being moved on-chain," analysts at Blockware Solutions said in the latest edition of the Blockware Intelligence newsletter. "Nobody wants to sell."

Data tracking firm Glassnode defines transfer volume as the U.S. dollar value of the total BTC transferred on-chain. The metric considers only successful transfers.

At press time, the seven-day and 14-day average mean transfer volume stood below $200,000, a far cry from $1 million and higher during the 2021 bull market, data tracked by Glassnode show.

Wall Street's embrace of the Nasdaq-listed spot bitcoin ETFs has been the primary reason for bitcoin's latest rally. In other words, the spot volume has been concentrated in ETFs, which also explains the low on-chain volume.

Nevertheless, other metrics also indicate that investors who survived the 2022 bear market are holding onto their coin stash in anticipation of a continued price rally.

For instance, the percentage of bitcoin supply that was last active between hree and five years ago continues to increase. Several analysts expect bitcoin's price to rally into six figures in the coming months, eventually peaking well above $150,000.

"Once we see the price really start to move, that's when on-chain volume will surge. Older coins will move to exchanges to be sold. Until then, low on-chain volume is a sign of supply-side illiquidity," analysts at Blockware said.

Bitcoin changed hands at $67,700 at press time, up 5% on a 24-hour basis. The CoinDesk 20 Index, a broader market gauge, was up 5% as well.