The Bitcoin network has seen a significant decline in its average block size and transaction rates, coinciding with a fall in its price to around $64,100. This drop in block size, a measure of transaction data included in each block, indicates a sharp fall in Bitcoin blockchain activity, which hit a yearly low on June 7.
Transaction Rates and Miner Profitability
Simultaneously, the network’s transaction per second (TPS) rate declined in June, indicating a reduction in activity and potentially reduced miner profitability due to decreased post-halving BTC block rewards.
Benjamin Charbit, co-founder and CEO of Darewise Entertainment and a genesis member of the OPAL foundation, commented on these challenges:
“The two main challenges that Bitcoin keeps facing are the lack of programmability and the need to scale. To address these, [a] significant focus is on layer-2 solutions and the implementation of OP_CAT.”
Halving Implications
The BTC halving event, which occurred in April, reduced block rewards for miners by 50%, effectively decreasing profits and incentives to contribute to the blockchain’s activity. Reaching highs of around 28 TPS and lows of below 4.5 TPS through June, the average TPS at the time of writing was 9.12 TPS.
Despite the downturn for BTC block size and TPS, Charbit expressed optimism for the future:
“I expect the market to recover five months post-halving. The current time is great to focus on building and deploying capital to accumulate, as the floor price of most blue-chip collections has been affected.”
Runes Minting Market Activity
Despite the overall downturn in the BTC blockchain, the performance of the Runes minting market tells a different story. According to a post from Leonidas on June 19, the Runes minting market remains profitable, reflecting continued strong user activity on the BTC blockchain.
The secondary market performance of the top 10 largest Runes mints has ranged significantly from as low as -82.76% to as high as +1,194.42%, indicating strong market activity.
Charbit noted the impact on the Ordinals protocol:
“This decrease has impacted the Ordinals protocol by reducing the number of opportunities to inscribe digital artifacts on the blockchain, resulting in less frequent and lower volumes of Ordinals transactions being included in blocks.”
Bitcoin Market Trends
The recent drop in price and coincidental fall in network activity could signal the start of a prolonged correction. Crypto analyst Rekt Capital discussed the potential for continued BTC price correction, noting clusters of price action near the range high resistance at ~$71,600.
According to Rekt Capital, BTC was “getting very close” to retesting the $64,000 and $62,500 levels, identified as daily Chicago Mercantile Exchange gaps, representing areas in the price chart with noticeable differences between the closing price on one day and the opening price the following day.
Summary
- Bitcoin network’s average block size and transaction rates have significantly declined.
- TPS rates have decreased, indicating reduced activity and miner profitability post-halving.
- BTC halving event in April reduced block rewards by 50%, impacting miners’ incentives.
- The Runes minting market remains active and profitable, despite the overall downturn.
- Optimism remains for market recovery five months post-halving.
- Analysts predict potential for continued BTC price correction, closely watching specific price levels.