Record low Bitcoin speed suggests BTC could move lower

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In the early hours of July 14, the price of Bitcoin took a surprise hit to $ 31,550 before slowly climbing back above $ 32,900 in the morning session.

The rapid drop near the crucial $ 30,000 resistance set off alarm bells among bulls and bears and while the $ 30,000 to $ 32,000 level continues to function as a support level, a recent update from the ByteTree CEO James Bennett’s market paints a mixed picture of what might be in store for BTC.

According to Bennett’s analysis, the price of Bitcoin has stabilized near the $ 34,000 level due to reduced sales of miners and increased accumulation, but he also warns that several metrics show that the decrease in activity on the network suggests that BTC is still in a neutral zone where there is a reduced appetite from key players.

Bitcoin transactions decline

According to Bennett, Bitcoin’s weekly transactions have been down sharply since April and now stand at nearly 1.48 million transactions, which is down from the Jan. 9 high of 2.57 million.

Number of Bitcoin transactions accumulated over 1 week, sliding. Source: ByteTree

Due to the current market downturn and the decline in transactions, the total transaction value on the Bitcoin network has fallen to $ 23.6 billion, the lowest level since December 2020.

Total value of the Bitcoin transaction accumulated over a week, continuous. Source: ByteTree

Bennett said that due to the decline in on-chain activity:

Bitcoin is unlikely to see its next price rise and it might even see a downward movement. Bitcoin speed drops to record highs

Bitcoin’s speed hit an all-time low of 195% on July 11, a significant drop from its recent high of 593% on May 23. Speed ​​is not a price indicator and measures the dynamism of the Bitcoin network according to Bennett.

Bitcoin network speed. Source: ByteTree

Bennett said:

During the second half of last year, from July to December, the velocity picked up and the price followed. As the velocity declined over the year, the price followed suit again.

Related: BlackRock CEO Reports Weak Crypto Demand From Long-Term Investors

Miners are finally showing signs of accumulation

A positive sign in the market is the recent increase in the accumulation of miners. That figure had fallen in recent months due to China’s crackdown on mining operations to the point that many have shut down completely and are moving to other countries.

Inventory of Bitcoin miners versus price. Source: ByteTree

As the BTC inventory held by miners stabilized and began to rise, Bennett suggested that miners are accumulating again and this can be interpreted as a signal that the price of Bitcoin may be stabilizing.

Institutional dominance to BTC price ratio. Source: ByteTree

The Institutional Dominance Ratio, a measure that monitors the top fifth quintile of the Bitcoin heatmap, also shows an increase from July 12. This suggests that the large Bitcoin holders have increased their activity over the past two days as the price of Bitcoin has increased. held over $ 31,000.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.

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