The seven-day average for the number of daily bitcoin transactions has reached a two-year low, recently dropping below 160,000 for the first time since March 2016. The lull in transactions coincides with the weekly volume of bitcoins exchanged through peer-to-peer (P2P) trading volume on Localbitcoins recently dipping below 6,000 for the first time since February 2014.
Number of Confirmed Daily BTC Transactions Hits Two-Year Low
The number of confirmed daily bitcoin transactions has dropped substantially in recent weeks, with blockchain.info data indicating that the seven-day average falling from an all-time high of nearly 350,000 on the 16th of December 2017 to reach lows of between 150,000 – 155,000 during February 2018.
The recent lull comprises the first time that the seven-day average has dropped below 160,000 since March 2016, during which the price of BTC hovered between $400 – $450 USD.
Fluctuating Market Cycles
The drop in transaction volume has interpreted by some analysts as indicating a bearish outlook for the BTC markets.
The chief investment officer of Newscape Capital Group, Charles Morris, has described transaction volume as signifying movements in price direction. “We had a hype-cycle and now it’s cooling down. We just may be entering a bear market,” Mr. Morris stated.
Kyle Samani of Multicoin Capital has argued that the reduction in transaction volume is reflective of many businesses moving away from using BTC as a means of payment, stating “Merchants, payment processors and online gambling are moving off of Bitcoin.”
Localbitcoins Global Trade Volume Reaches Four-Year Low
The reduction in transaction volume coincides with a significant drop in the number of bitcoins traded globally on Localbitcoins.
Coin.dance data indicates that the total number of bitcoins traded on Localbitcoins has twice fallen below 6,000 in the last ten weeks, during the weeks of the 30th of December 2017, and the 24th of February 2018 respectively. Curiously, the lull in BTC volume around the 30th of December followed the all-time high for the weekly dollar value of Locabitcoins’ P2P trading.
By Samuel Haig
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