June 9, 2023

The third quarter (Q3) of 2022 was filled with intense testing of crypto assets with Bitcoin. [BTC] It’s in the heart. The king of crypto assets has, recently, seen a decline in its traction due to the development of major blockchains like Ethereum [ETH] and Cardano [ADA].

However, BTC still remains the largest market cap crypto asset by a country mile. While the coin price fell again in the previous quarter, another strange pattern emerged from the on-chain data.

Old BTC, new story

BTC has witnessed a price slide in recent months on the back of sustained macro pressure. Another big sell-off started last week after the launch of Ethereum Merge. However, BTC has witnessed a downward volatility trend in light of these events. The August 2022 average 30-day volatility has decreased by 20% from the 80% observed in June.

Source: Messari

One of the main effects of decreasing Bitcoin price volatility has been pointed out by Messari recently Report. A lower Bitcoin volatility has resulted in lower liquidations across the broader crypto market.

In total, long liquidations amounted to $5 billion in August 2022, less than half of what was seen in June ($10.8 billion). Total short liquidations were also significantly lower. In August, short liquidations recorded nearly $3.5 billion, compared to $6.6 billion in June.

Source: Messari

A network conundrum

Along with the relocation, the BTC network also underwent some changes in the previous quarter. Additionally, there has also been a slowdown in funded addresses for the network. In Q3 2022, funded addresses grew only 1.1% compared to 2.5% in 2022. Furthermore, the number of funded addresses decreased for the first time in August 2022 after 10 months of growth

The network also witnessed a 4% decline in average daily active addresses to 890,000 compared to Q2 2022. However, Messari states that,

“Active addresses appear to have returned to their baseline of activity after the cycle peaked with prices in Q4 of 2021.”

Source: Messari

It was a similar story for BTC from the previous quarter with daily trading largely unchanged. In fact, they continue to record more than 250,000 daily transactions a year. However, there was a decrease in average transaction fees as the average fee per transaction decreased by 21% to $1.4.

Source: Messari

At the time of writing, BTC stands amid intense speculation in the crypto community about its future. BTC price traded below $18,900 with sellers following last week’s gains.

This move puts BTC’s weekly losses at 7% as it battles a bear market.

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