The data shows that, despite Bitcoin’s price rising, on-chain activity has not improved in the past week. Why is this happening?
Bitcoin’s value is $ 50,000 but activity is slow
According to this week’s edition of Arcane researchReport: On-chain activity seems to be slow to recover despite high prices for the cryptocurrency.
This indicator measures activity using Bitcoin’s 7 day average number of active addresses indicator. It gives the number addresses that have seen transactions during a given time period.
Here’s a graph of the average daily number of active BTC accounts (7-day average) and their price:
Source :| Source: Arcane Research
The graph above reveals two things. The graph above shows two things. First, the number active addresses is currently just below 900,000. This indicates that the indicator has recovered from the lows of 750,000 following the price crash.
Second, the Bitcoin price has now reached $ 50,000 but activity has not increased as dramatically. The active addresses are at the same level as they were in the summer 2020, when the price was $ 10,000. The same metric was worth 1.2 million during the bullish rally that took place in 2021.
Build-up of Bitcoin ‘buckets of addresses’ suggests $ 50,000 overshoot is sustainable| Build-up of Bitcoin ‘buckets of addresses’ suggests $ 50,000 overshoot is sustainable
Now, the question is, “Why is the indicator not catching up to the price this year?” This trend could have two possible explanations.
The first is that a low number of active addresses may be a bearish indicator. Investors might not be interested in Bitcoin right at the moment, so they haven’t moved their funds there.
Another reason is that BTC is increasingly seen as a store value by investors, so they don’t have any reason to move their coins. This would be a bullish signal to the market, as there are more long-term holders in the network.
What’s next for BTC’s price?
Bitcoin’s price is currently trading at $ 48,000 as of this writing, an increase of 5% in the past seven days. The cryptocurrency has seen 40% growth in the past month.
Below is a chart that highlights BTC price trends for the past three months.
BTC falls sharply after a touch above the $50k mark. Source: BTCUSD| Source: BTCUSD on TradingView
The price of Bitcoin is currently falling rapidly after breaking through the $ 50,000 mark, which could indicate that there is a bearish market.
Similar reading: As Bitcoin surpasses $ 50,000, indicators suggest a rally to ATH| As Bitcoin exceeds $ 50,000, indicators look like rally to ATH
However, it is not yet certain. There will be further price increases. If activity increases significantly, BTC could be bullish instead.