Only the HODLers Remain
The relatively low utilisation of Bitcoin block-space has beenwidely discussed of late, with a case to be made on both sides as towhether it is bullish, bearish, or both:
Bull case is that it is a result of growing adoption of efficient transaction techniques such as SegWit, transaction batching, and usage of Lightning Network.
Bear case is that the 50%+ correction in May resulted in a flushing out of many retail traders and investors, and thus interest in the protocol has waned since early 2021.
The most likely case is both of these are in effect.
The chart below shows that transaction counts have indeed declinedsince May, returning to what could be considered a 'bearish onchainactivity channel'. Higher transaction counts are characteristic ofbullish conditions as new entrants swarm into the network and demandfor block-space increases accordingly. Conversely, lower transactiondemand can signal fewer market participants are active, and lessrelative interest in the asset.
Transaction counts are currently at around 175k to 200ktransactions per day which are similar to levels seen in the 2018bear market.
