The rate of active bitcoin addresses plunges to a level not seen in 13 years!

The cryptosphere is in turmoil: Bitcoin is experiencing a historic drop in the rate of its active addresses. Not seen in over a decade, this decline raises questions about investor engagement and market dynamics. Why are transactions declining, and what does this trend mean for the future of the world’s most famous crypto?

Historic drop in active bitcoin addresses rate

The ratio of active bitcoin addresses dropped to just 1.22% for the month of June. This is the lowest level since November 2010, reflecting a notable reduction in selling and buying activity among bitcoin holders. The week of May 27 saw just 614,770 active addresses, a figure that hasn't been this low since December 2018.

This drop in the number of active bitcoin addresses indicates consolidation, with less frequent transactions. However, 85% of bitcoin holders are currently making profits at the current price, which could discourage new buyers due to potentially limited upside potential. Additionally, the concentration by large holders stands at 12%, indicating relatively decentralized ownership and reducing the risks of price manipulation.

Furthermore, 70% of bitcoin holders have held their assets for more than a year, showing strong confidence in the future of crypto. However, the presence of 25% medium term holders and 5% short term holders suggests some liquidity and recent buying activity.

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Bulls versus bears: an indecisive market

The crypto market is currently witnessing a clash between bulls and bears. The sentiment index between the two camps has historically been more optimistic, but that gap is narrowing, indicating growing caution or even pessimism among traders. This development could be linked to low address activity, a sign of a lack of user engagement or new investments in bitcoin.

Technical analysis, notably using the Ichimoku cloud and the RSI divergence indicator, shows a potential bullish trend. Bitcoin price is slightly above the Ichimoku cloud, a typically bullish signal. The RSI indicator, currently around 10, signals a major divergence with relatively high momentum compared to the average, which could indicate an uptrend if the RSI moves back above the mid-50 line.

However, net network value (NVT) shows volatility and a general downward trend in usage relative to network valuation, suggesting that current price levels are not sustainably supported by actual transactional usage.

The fall in the ratio of active bitcoin addresses to levels not seen since 2010 reflects a phase of market consolidation. Despite positive technical signals, investor caution and market volatility make forecasts uncertain. Bitcoin holders will need to monitor these trends carefully to anticipate future movements.

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