Bitcoin Active Addresses Stay Low, A Hint That Demand Isn’t There Yet
27 September 2022 - 5:00AM
NEWSBTC
On-chain data shows the number of active Bitcoin addresses have
remained at a low value for a while now, suggesting there isn’t
much demand for the crypto currently. Bitcoin Active Addresses Have
Continued To Move Sideways Recently As pointed out by an analyst in
a CryptoQuant post, the BTC network activity has been low in recent
days, implying there isn’t enough demand for a bull rally just yet.
The “number of active addresses” is an indicator that measures the
total amount of addresses on the Bitcoin blockchain that have been
taking part in some activity, whether that be sending or receiving.
When the value of this metric is high, it means the network is
observing a lot of activity right now. Such a trend shows the
general interest around the crypto is high among traders currently.
Related Reading: Glassnode: Bitcoin Is Currently In “Bear To Bull”
Transition Period On the other hand, low values of the indicator
can suggest the chain isn’t viewing much trading activity at the
moment. Now, here is a chart that shows the trend in the Bitcoin
active addresses over the last few years: Looks like the value of
the metric has been quite stagnant in recent months | Source:
CryptoQuant As you can see in the above graph, the quant from the
post has highlighted the relevant periods of trend for the Bitcoin
active addresses. Historically, bear markets have observed low and
stagnating values of the indicator. The reason behind it is that
large declines in the price usually scare away newcomers and
short-term traders from the crypto, thus killing off activity on
the network. Related Reading: Bitcoin (BTC) Bear Market Price
Prediction As XRP Pumps Off SEC News In the times leading up to
bull runs, the market has generally seen a gradual buildup of
active addresses, which eventually hit a peak alongside the price.
This kind of uptrend signals increasing demand for Bitcoin among
all kinds of traders. Most recently, the metric has been stuck in
sideways movement as the crypto has been in the middle of a bear
market. There still hasn’t been, however, any sign of the number of
active addresses going up yet. The analyst explains that this
recent low demand suggests BTC still hasn’t built up any stable
setup for a long-term sustainable rally that can lead to a new bull
market. BTC Price At the time of writing, Bitcoin’s price floats
around $18.8k, up 1% in the past week. Over the last month, the
crypto has lost 12% in value. The below chart shows the trend in
BTC’s price over the past five days. Looks like the value of the
crypto hasn't shown much movement during the last few days |
Source: BTCUSD on TradingView Featured image from Hans-Jurgen Mager
on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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