The Bitcoin network has experienced a significant decline in its average block size and transaction rates, coinciding with a fall in price to around $64,100.

The drop in block size — the measure of transaction data included in each block — indicates a sharp fall in Bitcoin (BTC) blockchain activity, which hit a yearly low on June 7.

Chart depicting the average block size on the Bitcoin blockchain. Source: Blockchain.com

The network’s transaction per second (TPS) rate simultaneously declined in June, indicating a reduction in activity and potentially reduced miner profitability due to decreased post-halving BTC block rewards.

Speaking with Cointelegraph, Benjamin Charbit, co-founder and CEO of Darewise Entertainment and a genesis member of OPAL foundation, said:

“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.”

Related: Oil land buyer LandBridge makes a nod to crypto miners in $320M IPO

Halving implications

The BTC halving event occurred in April and reduced block rewards by 50% for miners, 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.

Bitcoin transaction rate. Source: Blockchain.com

Despite the downturn for BTC block size and TPS, Charbit expressed enthusiasm for the months to come, stating:

“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.”

Related: ‘No clear catalyst’ for bloodbath as top altcoins fall double digits

Runes tell a different story

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

According to an X post from Leonidas on June 19, the Runes minting market remains profitable and reflects continued strong user activity on the BTC blockchain.

Source: Leonidas

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 continued strong market activity. 

On the topic of Ordinals, Charbit told Cointelegraph:

"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.”

Related: Traders unbothered by Bitcoin’s sub-$65K levels, say BTC price remains ‘high and steady’

Bitcoin market ebb and flow

The recent drop in price and coincidental fall in network activity could just be the start of a prolonged correction.

Crypto analyst Rekt Capital recently discussed the potential continued correction of BTC forming “clusters of price action near the Range High resistance at ~$71,600.”

According to the analyst, on June 17, BTC was “getting very close” to retesting the $64,000 and $62,500 levels, identified as daily Chicago Mercantile Exchange gaps.

These gaps represent areas in the price chart where noticeable differences can be seen between the closing price on one day and the opening price the following day.

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