As the price of Bitcoin fell sharply four weeks ago, network activity declined as investors started stockpiling their coins. The pattern is changing as the number of daily transactions increases again, and the coins are on the move.
Glassnode has posted a chart of active Bitcoins showing how the number flowing through the network started to increase exponentially last August, before levelling level off last month. Now, the number is picking up once again.
As seen in this chart from Blockchain.info, overall network activity is also rising again after a sharp decrease in March.
The main takeaway from this data is that once again the main cryptocurrency is on the move. The shifts in network behaviour may be fairly low but they also reflect a transition away from hodling Bitcoins to using them.
Such rises are most likely due to an increase in trade, which will inevitably arise as prices rise. Many investors see the improvement of the market as an opportunity to profit quickly from what is obviously an increasing cryptocurrency demand.
It should be remembered that the upcoming halving of the block also offers a powerful incentive to acquire Bitcoin now before the supply declines in mid May. Fear of inflation and a continuing global economic downturn are also pushing many to place their savings in safe havens, which are ideally suited for Bitcoin and other cryptocurrencies.
While the level of operation on the Bitcoin blockchain ebbs and flows from month to month, it should be noted that the network continues to operate as expected. Fees remain small and confirmation times are comparatively short.
The network will start showing signs of congestion at about 400,000 transactions a day, which is substantially more than the current number. This last thing happened in 2017 which resulted in slow transactions and high fees. The Lightning Network currently exists to help prevent these issues from ever occurring again, but more research is needed to make it secure and user friendly enough for mass use.
Assuming that the number of active Bitcoins will continue to rise along with the increasing acceptance of cryptography is rational. Activity is accelerating across the blockchain space, most of which occurs in areas like decentralised finance and supply chain tracking. Current data shows clearly that interest in this new asset class is continuing to rise.