A 7-day moving average of active addresses was noted a few weeks ago for the first time since March 2020. Bitcoin BTC
-2.24%
The network fell below 700,000 as expectations for Rune caused fees to skyrocket after the halving.
This was not unexpected. High fees can price out users and discourage them from interacting with the blockchain.
When fees become unsustainably high, as in Runes, users unwilling to pay the fees will back off. Eventually, the hype will die down and fees will stabilize again, allowing users to come back and transact at more consistent prices.
But that doesn’t seem to be the case lately. The 7-day moving average fell to 689,810 on April 23, but rebounded slightly to 839,400 on April 30 as fees calmed down. The seven-day rolling average of the network’s average transaction fee was $39.15 on April 23, compared to $11.92 on April 30.
The moving average of active addresses was lower than before, at 655,190 on May 12. Meanwhile, the moving average of transaction fees also decreased to $3.86, in line with the pre-halving level.
A similar trend was seen for new addresses on the network, which generally follow a similar pattern to active addresses, given that transactions generate changing addresses. We then send any remaining funds not transferred in the transaction to another address controlled by the sender. This is like getting change back when paying with cash. The moving average of new addresses was 290,000, the lowest since July 2018.
Rune-related trading still accounts for a significant portion of Bitcoin activity, typically accounting for more than half of daily transactions since launch. But the frenetic energy and need to be first in has disappeared, and fees have calmed down as the desire to pay high premiums to get priority trading has waned.
Initially, high fees may have slowed down Bitcoin active addresses, but this no longer appears to be the main culprit. Some people may continue to wait for further signs that the Rune excitement is truly over. A broader market slowdown could also contribute to the decline.
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