Definition. This chart tracks the momentum of economically meaningful Bitcoin throughput by comparing the monthly average 🔴 of the entity-adjusted transaction count against the yearly average 🟢, plotted over the raw daily count (faint orange) and price (grey). Healthy network adoption is often characterized by an uptick in daily active users, more transaction throughput, and increased demand for blockspace (and vice-versa), making the number of transactions on-chain an effective tool to gauge the magnitude, trend and momentum of activity across the network.

Technical. Entity-adjusted transaction counts filter out transfers between addresses belonging to the same entity, isolating economically relevant activity. The momentum traces are simple moving averages of this filtered count:

• Monthly Average = sma(Entity-Adjusted Transaction Count, 30) 🔴
• Yearly Average = sma(Entity-Adjusted Transaction Count, 365) 🟢

Interpretation. Due to intraday volatility in on-chain activity metrics, the absolute value of transactions on any given day can be uninformative. However, comparing the magnitude and trend of transactions on a monthly and yearly basis can be much more informative — the crossovers underline relative shifts in dominant sentiment and help identify when the tides are turning for network activity:

• Monthly 🔴 > Yearly 🟢 indicates an expansion in on-chain activity, typical of improving network fundamentals, and growing network utilization.

• Monthly 🔴 < Yearly 🟢 indicates a contraction in on-chain activity, typical of deteriorating network fundamentals, and declining network utilization.

Hint: The barcode tool at the bottom of the chart will return a value of 1 🟡 when the 30D-SMA is trading above the 365D-SMA, signalling positive momentum.

Notes. Built from Entity-Adjusted Transaction Count. The unfiltered version of this chart is Transaction Count Momentum; the same framework applied to volume is charted in Transfer Volume Momentum (Entity-Adjusted).