Bitcoin and Ethereum network transaction volumes are down by 37.5% and 33% respectively below the May peaks. Currently, the count on the Bitcoin network is around 200,000 per day while that of Ethereum is just 450,000 addresses transacting per day. Most of the decline in transaction count on the Ethereum network was witnessed this past week, according to Glassnode analysts.
“On-chain activity on both chains has remained quiet relative to bull market highs, even as price momentum continues upwards, and bullish trends in supply dynamics remain in play.”
“Supply dynamics seem to suggest an extremely robust underlying demand is present, and this should continue to be quite constructive for prices if the trend continues. Aggressive spending of older coins would be a key invalidation signal to watch out for.”
At the same time, the percentages of young coins held – or those coins held lesser than three months continue to fall – now standing at 15% and 12.5% on both Bitcoin and Ethereum respectively. According to the analysts, this shows a strong trend to HODL on both networks. This trend is also proven by the high coin maturations of 50% and 70% in Bitcoin and Ethereum networks respectively. Non-zero addresses in both networks also continue to grow, which solidifies the notion that more people are choosing to accumulate than sell-off.
Given the supply data for both Ethereum and Bitcoin, “the current market trend is historically strong for the bulls,” wrote the analysts.
However, demand for NFTs on Ethereum is bringing an unexpected change. While transaction fees on the Bitcoin network are down in response to the falling on-chain transaction count, Ethereum fees are not. Glassnode analysts said this could be a result of the strong demand for NFT trading and investing in the Ethereum network.
Meanwhile, on-chain transaction data for four blue-chip DeFi tokens AAVE, COMP, UNI, and YFI shows that investors are not as much interested in DeFi tokens. This could be as a result of the popularity of NFT – in other words, more of them are interested in NFT than DeFi, wrote the analysts.