Bitcoin (BTC) has struggled with uncertainty over the past few months. It has become increasingly difficult to determine the direction of its next moves. However, that’s not the only factor that’s currently piquing investors’ interest. Bitcoin’s spot cash transaction volume has fallen to levels not seen in six years.
BTC volumes dramatically low
Recent data released by analytics provider CryptoQuant shed light on the dramatic drop in Bitcoin trading volumes. Over the past few weeks it has oscillated between 8,000 and 15,000 transactions per day, a significant difference from March 2023, when it reached 600,000 transactions per day.
Caue Oliveira, an analyst at CryptoQuant, explains the decline by relating it to growing concerns over the macroeconomic scenario. In his words:
“The U.S. Central Bank’s decisions are contributing to a growing sense of uncertainty, leaving investors waiting for a possible recession.”
In recent days, the U.S. Federal Reserve (Fed) announced it would keep interest rates between 5.25% and 5.5%, which is in line with current U.S. economic policy and market expectations.
Low BTC trading volume, an extremely positive sign
However, Oliveira believes that the decline in Bitcoin cash transaction volume can also be interpreted as a sign of “growing investor confidence.” This indicates that Bitcoin holders would rather keep their coins than sell them, which may be a sign of long-term faith in the cryptocurrency’s potential.
Oliveira adds, “Instead of hunting for quick profits through short-term trading, more and more people are treating Bitcoin and other cryptocurrencies as long-term investments. They are more interested in holding on to their coins, believing in their future value, rather than selling at the first sign of profit.”
Data confirmed by more metrics
Recent analysis by IntoTheBlock confirms these observations. The analytics platform reveals that long-term Bitcoin investors remain unfazed by current market conditions, continuing to hold onto their assets. According to IntoTheBlock’s data, long-term hodlers currently hold 13.44 million BTC, down only slightly from the record high of 14.599 million. This corresponds to 69% of the total supply of Bitcoin in circulation.
The term “hodlers,” as defined by IntoTheBlock, refers to investors and entities that acquired their Bitcoins at least a year ago. This clearly suggests that many Bitcoin holders believe in the long-term potential of the cryptocurrency, regardless of short-term market fluctuations. BTC’s spot trading volume may be at record lows, but belief in Bitcoin’s future remains unchanged.