U.Today – In a recent analysis, CryptoQuant indicated that the total number of active addresses on the network has hit new lows in 2024, reaching the same level as three years ago, when the BTC price was trading at around $45,000.
A decrease in active addresses shows less overall activity on the Bitcoin network, implying that fewer transactions are taking place, which could reflect a lack of interest in using the network at the moment.
This lack of interest could affect the price of Bitcoin, correlating with evidence of low trading volumes.
Lower network activity typically results in lower volatility, which can lead to a period of price stability emanating from a trading range or consolidation. Bitcoin has traded sideways for about 180 days, with prices ranging between $49,050 and $73,000.
For some investors, a drop in active addresses and price can be interpreted as a buying opportunity, however, this can vary. If the market perceives the drop as a sign of weakness or lack of relevance in the current macroeconomic environment, new supports could emerge, thus creating new entry points.
Bitcoin Price Action
Bitcoin price action has been stagnant and investor sentiment has been apathetic for the past six months.
According to Glassnode, a notable shift has occurred over the past three months: downward pressure has increased, causing the market to suffer its most substantial drop of the cycle.
From a broader perspective, however, Bitcoin spot price is trading roughly 22% below its recent ATH of nearly $74,000, indicating a relatively modest decline compared to previous bull market regimes.
While the average Bitcoin investor is still profitable overall, the short-term holding group is still significantly underwater on their holdings, making them a source of risk currently.
At the time of writing, BTC is up 1.55% over the past 24 hours to $57,148 according to data from CoinMarketCap.
This article was originally published on U.Today
