Expert Raises Alarm Over Low Bitcoin Active Addresses Amid 50% Price Surge
According to research on the recent performances of Bitcoin, the leading digital asset lacks on-chain transactions volume and active addresses that comes with the bull market scenario. The crypto analytic platform, CryptoQuant released an appraisal of the 2023 price rebound for Bitcoin while warning that the largest digital token might be weaker than it appears.
A Difference With Bull Market
According to the on-chain metric released by CryptoQuant, the recent green flips with occasional bull signals not seen in years, despite appearing cheerful, is a cause for concern among industry analysts. In one of his writings, a CryptoQuant contributor with the alias Yonsei_dent stated that the 2023 price rebound for Bitcoin does not align with the previous bull rallies.
He explained that active addresses on the Bitcoin network did not increase even as the BTC/USD pair gained nearly 50% in its year-to-date performance. In the Quicktake blog post, the contributor noted that active addresses determine the total number of addresses sending and receiving BTC.
In this case, he added, the metric has provided a look at how active addresses on the Bitcoin network have been in recent weeks. Part of the blog post reads:
“The laws of supply and demand in every market influence price of assets. For asset prices to rise in the crypto market, there must be an interest in the market accompanied by demand.”
Using a chart to illustrate his points, the contributor revealed that the 30-day moving average (MA) of active addresses on the Bitcoin network spiked at the end of the 2018 bear market. In addition, the March 2020 Covid-19 global market crash is also part of the factors worth considering.
However, he noted that the 2023 price rebound in the crypto market has yet to produce the same trend for BTC. He added that he is concerned with the 2023 rally because it needs to reflect any jump in active addresses for the asset.
Increased Transactions, Reduced Volumes
Another part of the CryptoQuant research also produced similar outcomes regarding investor habits for Bitcoin. Furthermore, another crypto analytics firm, Glassnode, opines that on-chain volume still needs to be higher, with both long and short-term holders unwilling to spend.
The Glassnode analysis added that despite the net growth from on-chain activities and an all-time high in UTXOs, transaction volumes are significantly low for long and short-term token holders.
However, there are encouraging signs of improving market sentiment for BTC, with coins moved to exchanges by long-term holders swimming in profits. Last month, Glassnode data revealed that 58% of long-term holders’ assets sent to exchanges were transferred at a loss, while at the beginning of this week, the figure for the asset was only 21%.
Meanwhile, Bitcoin has continued to see relative price action at the start of the month, with experts anticipating a further rise in value.
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