There has been a decline in the on-chain activity of Bitcoin and Ethereum over the past couple of days. Glassnode in a recent tweet reported that the on-chain activity of Bitcoin and Ethereum have returned to Dec-Jan 2020 levels.
As seen in the tweet above, Bitcoin and Ethereum have seen a drastic decline in the past couple of months. On-chain transactions are cryptocurrency transactions on the blockchain and verified by the network’s state.
On-chain transactions are only deemed valid when the blockchain has been updated to reflect the transactions on the public ledger.
On-chain transactions provide security and transparency since they can’t be altered after being validated and logged on the network. On the other side, on-chain transactions have several drawbacks, such as higher fees and longer processing times.
Whereas there was a considerable increase in activity and trade volume from September to May, the collapse began in mid-May when a series of events occurred one after another, leading to the collapse of cryptocurrencies.
If sideways cryptocurrency trading continues over the next several months, this fall might linger longer and we can expect a further decline in the activity.