Transaction counts, active addresses, and price action have a correlation with some coins, and this explains increased activity during rallies. Longhash has recently published a report which suggests that some coins may reveal the intentions of their holders, based on on-chain activity.

According to the report, Bitcoin revealed the strongest relationship between on-chain transaction and price action. The connection is not only linked to both long term and historical, but also the latest rallies and price slides. Both the number of transactions and active addresses appear to have a fairly positive connection with BTC’s price.

Bitcoin daily transactions also recovered from January 1, after they fell to a low of 250,000 per day. As the price began to rise up, Bitcoin on-chain transactions are now near 350,000 per day.

There was a similar relationship for Litecoin (LTC). Since both BTC and LTC are widely represented on exchanges, they can be moved between markets for arbitrage. Moreover, increased activity may be related to realizing profits. Ethereum (ETH) also showed increased transactions, though there was a weaker correlation to market prices.

On the other hand, networks like Tron (TRX) showed almost no correlation or very slight one, between price action and transactions. TRX tokens may be moved without transaction fees, leading to increased transactions which are not always linked to using exchanges.

Binance Coin (BNB) also showed an inverse correlation between token movement and price action. This can be attributed to the fact that BNB, like other native exchange tokens is mostly used for trading or payment of other fees and investment activities. As such, the BNB coin is only used within the Binance ecosystem. Thus BNB is not always stored on personal wallets, and actually sits within the exchange. Longhash warns traders not to rely on transaction count levels for price action. For instance, rapid selling of Bitcoin can also lead to temporarily increased transactions.

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