Cryptocurrencies

The Bitcoin network has seen a significant decline in average block size and transaction rates.

The Bitcoin network has seen a significant decline in average block size and transaction rates, coinciding with a drop to around $64,100.

The decrease in block size, a measure of the transaction data contained in each block, indicates a sharp decline in blockchain activity for Bitcoin (BTC) – reaching its annual low on June 7.

A chart showing the average block size on the Bitcoin blockchain. source: Blockchain.com

The network’s transaction rate per second (TPS) meanwhile declined in June, demonstrating lower activity and indicating a potential decline in miner profitability due to lower Bitcoin rewards following the halving.

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Cut effects in half

The BTC halving event, which took place in April, reduced block rewards by 50% for miners, reducing profits and incentives to contribute to blockchain activity.

Reaching highs of around 28 TPS and lows of less than 4.5 TPS through June, the average TPS at the time of writing was 9.12 TPS.

Bitcoin transaction rate. Source: Blockchain.com

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Runes tell another story

Despite the current state of the BTC blockchain, the performance of the rune minting market provides deeper insight into the rune token ecosystem and the network as a whole.

According to Leonidas X’s post dated June 19, the rune mining market remains profitable and reflects continued strong user activity on the Bitcoin blockchain.

source: Leonidas

The secondary market performance of the top 10 currencies varied significantly, from a low of -82.76% to a high of +1,194.42%, indicating continued strong market activity.

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The Bitcoin market comes and goes

The recent price drop and occasional decline in network activity may be just the beginning of a long-term correction.

Cryptocurrency analyst Rekt Capital recently discussed the possibility of a BTC correction continuing to form “clusters of price action near the high resistance range at ~$71,600.”

According to the analyst on June 17, Bitcoin was “very close” to retesting $64,000 and $62,500, which were identified as the daily gaps on the Chicago Mercantile Exchange (CME).

These gaps represent areas of the price chart where notable differences can be seen between one day’s closing price and the next day’s opening price.

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