The volume of transactions on the Bitcoin network has increased dramatically in the last week, which blockchain monitoring firm Glassnode attributes to investors de-risking.
Last week, the Bitcoin (BTC) mempool was flooded with 42,800 transactions. Because of the hefty fees paid per transaction, Glassnode’s lead analyst believes they were “urgent” purchases. According to bitinfocharts, an on-chain data tracker, the average charge jumped to $2.72 last week, approximately 15% higher than the regular average. On May 9, the findings were published in the Glassnode “Week On-chain” report.
On a blockchain network, transactions are forwarded to the mempool before being confirmed in a block.
The larger the charge paid on a transaction, the more likely it will be chosen above others.
Investors paid higher-than-average fees, according to Glassnode, to prioritize their bids in order to de-risk their portfolios or add collateral to their margin positions, since the price of bitcoin has dropped 19 percent in the last seven days. Fees for on-chain transactions corresponded with exchange deposit rates by just over 15%, and they were only greater in May 2021, during another period of significant sell-offs.
For most of 2022, BTC inflows to exchanges outweighed outflows, but that trend reversed this week, with inflows exceeding outflows by more than $50 million.
According to Glassnode, the entire amount of exchange-related volume was only reached in October and November, matching the bull market’s peak in late December and early January of 2017.
Since the middle of April, BTC accumulation has been on a downward trend, according to Glassnode. The largest accumulators of any cohort of wallets up to whales during the past week were “Shrimps,” who own less than an entire Bitcoin, although even their accumulative strength was poor compared to previous months this year.
Those in the top cohort with at least 10,000 coins were the biggest distributors or vendors. According to Glassnode, distribution has been larger than accumulation for the majority of 2022, however the biggest accumulators have been those with less than one BTC to those with ten.
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