Bitrabo Editorial
Recent on-chain data indicates that the number of active Bitcoin addresses has dropped to notably low levels. This development may have implications for the cryptocurrency’s market price.
Bitcoin’s 30-Day Moving Average for Active Addresses Falls to 1 Million
In a recent post on X, CryptoQuant analyst Axel Adler Jr highlighted a decline in the BTC Active Addresses metric. This measure tracks the number of unique addresses engaging in transaction activities on the Bitcoin blockchain daily.
The unique count of active addresses is reflective of how many users are interacting with the network, thus providing insight into the current level of activity on Bitcoin.
An increase in this metric indicates that more users are participating, suggesting greater interest in the blockchain. Conversely, a decline implies diminishing investor interest, as fewer transactions occur.
The following chart illustrates the movement of the 30-day and 365-day moving averages (MAs) of Bitcoin Active Addresses over the past few years:
The chart clearly shows that the 30-day moving average of active addresses has been decreasing over the last year. Although there was a brief uptick during the recent price rally, this was short-lived as the asset entered a period of consolidation.
Sudden price changes, like earlier rallies, often attract significant attention from investors, but the current plateau appears to have led to a swift decline in user engagement.
After the 30-day MA resumed its downward trend, it fell below the 365-day MA, and this relationship has persisted since then.
This signals that current monthly Bitcoin activity is beneath the yearly average. Presently, with the 30-day MA near 1 million, we are seeing levels comparable to those in July 2021.
This drop in July 2021 was associated with China’s crackdown on BTC mining, which negatively impacted Bitcoin’s price. However, the network managed to recover from this downturn, leading to a significant rally later on.
Historically, for Bitcoin to sustain upward momentum, an increase in active addresses is crucial, as new users are vital for maintaining price rallies. Until we see a rebound in active addresses, Bitcoin might struggle to initiate another substantial price increase.
Current Bitcoin Price
Bitcoin had risen above $58,000 earlier today but has since fallen back and is now trading at approximately $57,700.