Could BTC surpass six figures in the coming months?

In recent days, the markets have observed how the price of oil has been rising. Bitcoin (BTC) reached new all-time highs, surpassing $70,000. However, a closer reading of activity on the blockchain reveals a strikingly different picture.

According to data tracked by Glassnode, the dollar value of average transfers on the Bitcoin blockchain remains significantly below the peak reached in 2021. This discrepancy between the rising price and economic activity on the blockchain partly reflects a strong withholding sentiment in the market, a research firm notes.

Blockware Solutions analysts, in their latest Blockware Intelligence newsletter, note: "Average transfer volume on the blockchain (in dollar terms) is well below the 2021 bull market peak. Hardly any value is moving on the blockchain. No one wants to sell.

Glassnode's metric considers the US dollar value of total BTC transferred on the blockchain, only accounting for successful transfers. At the time of going to press, the average volume of seven- and 14-day transfers was below $200,000, in stark contrast to $1 million and more during the 2021 bull market.

The recent approval of spot Bitcoin ETFs by Wall Street, listed on the Nasdaq, has been pointed to as the main reason behind Bitcoin's latest rally. This has resulted in a concentration of spot volume in ETFs, which also explains the low volume on the blockchain.

However, other indicators suggest that investors who survived the bear market of 2022 are holding on to their bitcoin reserves in anticipation of a continued rise in prices. For example, the percentage of bitcoin supply that was last active three to five years ago continues to rise.

Analysts project that Bitcoin's price could surpass six figures in the coming months, even topping $150,000. Blockware analysts add: "When we see the price really start to move, volume on the blockchain will skyrocket. Older coins will be sold on the exchanges. Until then, low volume on the blockchain is a sign of supply-side illiquidity.