Key Points
- Bitcoin’s active addresses have seen a decline, indicating a decrease in network activity.
- This decrease in active addresses has coincided with increased volatility for Bitcoin, affecting its upward momentum.
Bitcoin [BTC] has seen a 1.68% increase over the last 24 hours. However, the digital currency has been struggling to maintain an upward momentum for the past month.
Specifically, BTC has been trading below $100k for the past fortnight.
Decline in Active Addresses
Notably, these struggles are not limited to Bitcoin’s price alone, but also its active users. Crypto analyst Axel Adler has noted a significant decrease in Bitcoin’s active addresses.
Adler observed that following the peak of BTC prices at $107k a week ago, the number of active addresses on the network has seen a decline.
This decline has resulted in Bitcoin’s active addresses falling below the annual average, hitting a low of 1.1 million.
This trend is worrisome for BTC as it indicates a decrease in network activity, with fewer investors actively participating.
Impact on Bitcoin
The decline in active addresses has coincided with increased volatility for Bitcoin. This has resulted in Bitcoin struggling to maintain an upward trend, leading to consolidation as active users decrease.
These market conditions suggest that the decrease in active addresses has impacted Bitcoin’s demand side, which is crucial for maintaining a strong upward momentum.
If this low demand continues for a prolonged period, institutions may sell to cover operational costs, leading to further downward pressure on Bitcoin’s price.
If the current trend continues, Bitcoin may potentially drop to $94,992. Conversely, if the demand for Bitcoin recovers, the price might attempt to reach $98,830.