On-chain data shows that active bitcoin addresses have continued to see a sharp decline recently, a sign that could be bearish for btc.
Active bitcoin addresses have recently seen their biggest drop since 2021
As noted by an analyst at CryptoQuant Quicktake btc-Active-Addresses-not-painting-a-pretty-picture” target=”_blank” rel=”noopener nofollow”>mailactive btc addresses have seen a decline since March this year. An address is said to be “active” when it participates in some type of transactional activity on the network, either as a sender or receiver.
The Active Addresses indicator tracks the unique total number of such addresses making transfers on the bitcoin blockchain every day. Unique active addresses can be considered the same as unique users visiting the network, so the metric essentially tells us about daily btc traffic.
Now, here is a chart showing the trend in the 100-day simple moving average (SMA) of active bitcoin addresses over the past few years:
<img data-recalc-dims="1" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/10/Is-the-Bitcoin-bull-run-already-over-Quant-sounds-alarm.png" alt="Active bitcoin Addresses” width=”1600″ height=”900″/>
The value of the metric appears to have been going down in recent months | Source: btc-Active-Addresses-not-painting-a-pretty-picture" target="_blank" rel="noopener nofollow">CryptoQuant
As shown in the chart above, the 100-day SMA of active bitcoin addresses had been rising throughout 2023 and early this year, but since March, the metric has seen a sharp change and its value is now falling rapidly. . The reversal occurred around the time of btc's new all-time high (ATH), so the indicator's decline is likely occurring due to the consolidation the coin has been stuck in since then.
Investors find sharp price action such as rallies exciting, while sideways movement is boring, so Active Directions recording a slowdown in a period like now is not too strange. However, what may be worth noting is the magnitude of the decline that the metric's 100-day SMA has seen. Its value is already below the lowest point seen in the 2022 bear market and could soon fall below the 2021 low as well.
bitcoin generally requires an active user base to sustain any rally, so the indicator value that has witnessed a crash recently could be a bearish signal. “You shouldn't be surprised if btc price starts catching up with the address activity trend very soon,” the quant notes.
While the trend of active addresses appears negative, CryptoQuant CEO Ki Young Ju said in an x x.com/ki_young_ju/status/1840693093362016487″ target=”_blank” rel=”noopener nofollow”>mail that bitcoin is still in the middle of the bull cycle.
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/10/Is-the-Bitcoin-bull-run-already-over-Quant-sounds-alarm.jpeg" alt="Difference in bitcoin Growth Rate” width=”4000″ height=”2250″/>
Looks like the value of the metric has been positive in recent days | Source: x.com/ki_young_ju/status/1840693093362016487/photo/1" target="_blank" rel="noopener nofollow">@ki_young_ju on x
The above chart shared by Young Ju shows the trend in the difference of bitcoin growth rate, which is an indicator that compares the growths of btc market capitalization and realized capitalization.
The last of them, the realized limit, is an on-chain capitalization model that basically tells us about the amount of capital that investors as a whole have invested in the cryptocurrency.
Currently, the indicator is green, which means that the market capitalization is growing faster than the realized capitalization. “When market capitalization grows faster than realized capitalization, it may indicate a bull market; The opposite could indicate a bear market,” explains the CEO of CryptoQuant.
btc Price
bitcoin has seen a continuation of its latest decline over the past day as its price has now fallen to the $62,700 level.
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The price of the coin has seen a steep decline over the last couple of days | Source: BTCUSDT on TradingView
Dall-E Featured Image, CryptoQuant.com, TradingView.com Chart
