April 2, 2023

The third quarter (Q3) of 2022 is filled with intense scrutiny of the Bitcoin cryptoasset [BTC] at its core.Recently, the king of crypto assets has lost its appeal due to the development of major blockchains such as Ethereum [ETH] and Cardano [ADA].

However, BTC remains the largest market cap cryptoasset by country miles. While the price of the coin fell again in the last quarter, another strange pattern was observed from the on-chain data.

Old Bitcoin, New Story

BTC has seen a price slide in recent months due to ongoing macro pressures. Another major sell-off started last week after the Ethereum merger kicked off. However, in light of these events, BTC has seen a downward volatility trend. The 30-day average volatility in August 2022 is down 20% from 80% in June.

Source: Messari

Messari in the most recent Report. Lower Bitcoin volatility leads to less liquidation across the larger cryptocurrency market.

Overall, long liquidations totaled more than $5 billion in August 2022, less than half of June ($10.8 billion). The total amount of short liquidations was also significantly lower. Short liquidations recorded around $3.5 billion in August, compared with more than $6.6 billion in June.

Source: Messari

Network Conundrum

With the shift in place, the BTC network also experienced some shifts in the last quarter. In addition, the network’s funding addresses have also slowed down. Funded addresses grew by just 1.1% in Q3 2022, compared to 2.5% in Q2 2022. Additionally, the number of funded addresses declined for the first time in August 2022 after 10 months of growth.

The network also saw a 4% drop in average daily active addresses to 890,000 compared to Q2 2022. However, Messari said,

“After the Q4 2021 cycle peaked along with price, active addresses appear to have returned to their activity baseline.”

Source: Messari

A similar story for BTC in the last quarter was that daily trading volumes remained largely unchanged. In fact, they went on to record over 250,000 daily transactions during the year. However, average transaction fees declined, as the average fee per transaction fell by 21% to $1.4.

Source: Messari

At the time of writing, BTC is in a state of intense speculation about its future in the crypto community. BTC prices are also below $18,900, with sellers having the upper hand over the past week.

The move saw BTC lose 7% weekly as it struggled in a bear market.

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