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BitcoinSistemi 2025-05-04 07:32:09

Despite the Rise in Bitcoin Prices, Why Has Interest in BTC Remained Low? 7 Reasons Listed

Cryptocurrency analysis company Alphractal analyzed the reasons why on-chain activity remained lower than expected despite the Bitcoin price hovering above $95,000. According to the company's report, despite the optimistic atmosphere in the market, transaction volume and the number of active addresses remain at historically low levels. According to Alphractal's findings, there are seven main reasons behind this situation: Price is driven by external factors rather than on-chain usage: The current price of Bitcoin is driven by external factors such as institutional capital inflows into spot ETFs rather than actual on-chain usage. Low volatility: Low volatility reduces the motivation of traders to trade, leading to a decline in on-chain transactions. Artificial stock market volumes: Exaggerating trading volumes on some exchanges may be hiding the true level of usage on the network. Limited practical demand: Bitcoin’s price is mostly maintained through derivatives and speculative instruments rather than daily usage on-chain. The market is in the consolidation phase: Investors tend to wait until macroeconomic developments or clear signals come in. This limits coin movements. Related News: Ripple's Chief Legal Officer Explains Why the SEC Withdrew Its Appeal in the Case Proliferation of Tier-2 solutions: Layer two solutions like the Lightning Network cause transactions to shift off-chain, which makes mainnet activity appear low. Shift of speculative activities to other networks: Networks like Ethereum, Solana, and Base are attracting transaction-intensive activities like DeFi, staking, and memecoins, which is causing the dynamism on the Bitcoin main chain to decrease. Alphractal states that the current situation reveals that Bitcoin is starting to be considered more like a “financial asset” rather than a “blockchain technology”. This indicates that the link between on-chain usage and price is gradually weakening. *This is not investment advice. Continue Reading: Despite the Rise in Bitcoin Prices, Why Has Interest in BTC Remained Low? 7 Reasons Listed

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