The Bitcoin market recently revealed a significant divergence between price and on-chain activity: Despite the continuous challenge to historical highs, the daily transaction count has quietly fallen, and here's what might be happening in the subtle changes of the Bitcoin market.
Transaction Volume Hits Bottom, Price Soars
The seven-day moving average of Bitcoin network transactions recently reached a 19-month low, with approximately 317,000 transactions according to The Block data, which is the lowest since October 2023. Additionally, YCharts indicators show that only about 256,000 transactions were packed into blocks on June 1, 2025. The cooling of transaction activity has allowed some extremely low-fee transactions to be completed, even including transactions below Bitcoin Core's default relay minimum (1 sat/vB).
Mempool founder Mononaut reported a transaction with almost zero fees (0.1 sat/vB, about $0.01) that was mined by MARA through its low-fee transaction channel Slipstream after being dormant for a month. Mononaut believes this was a carefully designed transaction:
"Meticulously crafted with only the finest hexadecimal characters, this transaction cost only 11 Sats, approximately $0.01, and sat in the mempool for a month." Such deliberate transaction placement to trade at below-market prices has sparked some controversy, with some considering it spam on Bitcoin.
Core Policy Dispute: Tug of War Between Openness and Order
In response, 31 Bitcoin Core developers issued an open letter on June 6, arguing that low-fee or non-standard transactions should not be refused for relay if miners are willing to pack them. They believe this is crucial to Bitcoin's nature as an anti-censorship system, emphasizing that this is not an endorsement of non-financial data use, but an acceptance that Bitcoin might be used for purposes not everyone agrees with, and pushing users to private channels would undermine decentralization.
However, this statement drew criticism from some community members. Jan3 founder Samson Mow stated on X: "Bitcoin Core developers have been gradually changing the network to enable spam, and now seem focused on removing barriers for spammers. Simply saying 'this is the status quo, too bad' is dishonest."
One core of the dispute is that Bitcoin Core developers removed the 80-byte data relay limit, allowing larger data embedding. Developers argue this helps predict transaction packing and speeds up block propagation, but critics worry it could lead to centralization and "spam" issues.
Reduced Supply, Increased Wallets
Despite the decline in transaction count, other on-chain indicators tell a different story. Bitcoin supply on trading platforms has dropped to a near-seven-year low (less than 11%), mainly due to the long-term holding (HODLing) trend and increased institutional adoption, with ETFs and corporate buyers continuously absorbing market liquidity.
Moreover, Santiment data shows that large holders' ("whale") Bitcoin inflows have significantly grown 145% to 214% in the past 7 to 30 days. Wallet creation is also increasing, with nearly 557,000 new wallets created on May 29, 2024, the highest single-day record since December 2023.
Simultaneously, indicators show that transaction volume in USD terms remains massive, sometimes exceeding $44 billion per day, suggesting frequent large institutional transfers.
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