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Bitcoin on-chain volume hits a 1-year high with only 3.6% coming from exchanges



Bitcoin’s on-chain transfer volume grew considerably over the past month, ultimately hitting a 1-year high of 3.2 million BTC on September 9. At the same time, visible on-chain exchange activity has been dropping; only 3.6% or 115,000 BTC were transacted via trading platforms on the day.

Bitcoin on-chain transfer volume. Source: Glassnode.

Bitcoin fund flow ratio. Source: CryptoQuant.

This does not necessarily mean that the exchange trading volume has declined, as trading on centralized exchanges almost always happens off-chain — if anything, it has gone up.

Bitcoin exchange trading volume. Source: Kaiko.

Most on-chain activity is registered on centralized exchanges when users deposit or withdraw funds. Thus, this trend may actually indicate that users are choosing to move their assets back and forth less often.

Since the growth of Bitcoin’s on-chain transfer volume is likely not caused by exchange activity, it is possible that it stems from greater adoption of the asset in the economy. The last time this metric was higher was August 21, 2020, when it appeared to spike to almost 25 million BTC. This seems to have been anomalous though, as we have no way of knowing exactly what caused it.

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Fresh Bitcoin ETF hopes back BTC’s swift rally above $40,000




Crypto investors are seeing gains in Ether (ETH) and Bitcoin (BTC) today after the successful launch of Ethereum’s London hard fork and a series of new Bitcoin ETF filings resulted in a rally that propelled BTC price 9% higher and Ether gained 11.75% which brings the altcoin closer to the elusive $3,000 level.

Data from Cointelegraph Markets Pro and TradingView shows that after an early morning sell-off that saw BTC price fall to $37,280, bulls stepped in and the ensuing high volume spike sent BTC price to an intraday high at $40,775.

BTC/USDT 4-hour chart. Source: TradingView

Recent comments from the United States Securities and Exchange Commission Chair Gary Gesler about the viability of a Bitcoin ETF were followed by several new ETF applications being filed on Aug. 5 and investors are hopeful that the chance of approval has increased.  

Related: Fed governor says CBDCs remain ‘a solution in search of a problem’

Regarding the current bullish price action, analyst Will Clemente III posted the following chart showing BTC’s past performance and noted that the yellow line “served as resistance to the 2017 dead cat, support in January 2021, and the level that price dropped once broken through in May.”

Top/Bottom models for Bitcoin. Source: Glassnode

Clemente said:

“In my opinion, this would be a key level ($54K & rising) to watch for confirmation/rejection. (2013 vs. 2017 reaction)”

The overall cryptocurrency market cap now stands at $1.662 trillion and Bitcoin’s dominance rate is 45.6%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.