Bitcoin (BTC) Registers Peak Transaction Output Activity
The Bitcoin network went through a spike in transaction output activity, reaching peak levels in more than a year.
The Bitcoin (BTC) network saw a sudden spike in the value of transaction output, suddenly rising to the highest level in two years. The sudden transaction activity includes returned coins, which increase the total value.
The reason for the spike in activity is, generally, the Bitcoin UTXO model, in which each transaction generates another transfer of “change” back to the user’s own wallet. But the reason behind the sudden transaction activity may be different. BTC outputs reached the highest level since January 2016, when the outputs spiked to above 38 million BTC net, outpacing the available supply in turnover.
One possible explanation is that Thursday saw a significant backlog of BTC transactions, as much as 20,000 pending transactions in the mempool. This activity may be due to attempts to send coins on exchanges. The other potential explanation is a dusting attack, an event where multiple small transactions are sent out, to map out wallets and addresses.
Analysts saw the BTC network activity related mostly to change volume, and centered on one specific wallet address. The address was extremely active on August 22. The wallet sent out significant outbound transactions, then sent out small change to its multiple addresses.
Alternative explanations include a technical movement of funds related to the XAPO wallet acquisition by Coinbase. Other potential explanations may include transfers from exchange wallets. The round transactions also resemble the movement of funds by Plus Token, the crypto scheme that scammed investors in China and Korea in the past months. It must be noted the bulk of transactions is “change”, that is, no payment of value has taken place.
The Bitcoin network is used as one indicator for the potential price movement of the coin. Large spikes in activity often precede a significant price move. BTC currently hovers with a price of $10.176.94, bouncing off a recent slide under the $10,000 mark. With BTC at a crossroads, all network indicators are closely watched for the potential to foretell a price movement