According to onchain data from IntoTheBlock, the proportion of active Bitcoin addresses has decreased to its lowest level since November 2010
The weekly active wallet ratio reached a low of 1.22% in June and a peak of 1.32%. The most significant ratio of the month was last observed in November 2010.
Furthermore, the number of active purses has plummeted to its lowest level in several years. The number of active purses was 614,770 on May 27, the lowest since December 2018.
A declining active address ratio suggests a lack of purchasing and selling activity among holders, indicating a market consolidation phase.
According to Juan Pellicer, a senior researcher at IntoTheBlock, the declining wallet activity rate of Bitcoin is due to a lower level of retail participation than in previous cycles.
“Institutional capital, rather than retail investors, was the driving force behind this year’s surge to a new all-time high,” Pellicer reported to Cointelegraph.
“Retailers may have been less inclined to invest in cryptocurrency than in the past due to the broader economic climate.”
The activity rate has decreased as investors prepare for increasing whale movements, including the Mt. Gox trustee’s intention to commence distributing payments to creditors in July.
Additionally, more oversized holders, including those affiliated with governments, were observed engaging in sales activities.
Pellicer further explains that the concentration of bearish trading activity results in a significant amount of it being conducted off-chain, which has a negligible effect on chain address activity statistics.
Is Runes experiencing difficulty?
The decrease in activity may seem counterintuitive in light of the recent introduction of Runes, a fungible token protocol, to the Bitcoin ecosystem in conjunction with the most recent halving event in April.
It was anticipated that Runes would offer miners an alternative revenue stream, which was achieved on the first day. Miners received record-high trading fees on the day of the halving.
However, transaction fees have since returned to their pre-halving levels, as miner reserves, which represent the new Bitcoin held by miners, are also at 14-year lows.
Pellicer informed Cointelegraph that Runes had experienced a decrease in activity; however, the current state of these assets is a transient lull rather than a permanent decline due to their cyclical nature.
In the interim, memecoins and celebrity currencies have garnered the attention of speculators betting on the potential for substantial gains in the cryptocurrency market.
Despite Bitcoin’s widespread reputation for volatility, its current condition can be regarded as stable when contrasted with lower-cap memecoins.