Bitcoin active addresses have significantly declined since early 2024, adding to the uncertainty regarding Bitcoin's future price movements.
Significant Decline in Activity
The number of active Bitcoin addresses has significantly declined since the beginning of 2024, a pattern historically seen after Bitcoin’s price peaks in 2017 and 2021 bull cycles. According to CoinMarketCap, Bitcoin is currently trading at $56,666, its lowest level since August 16.
Shift in Bitcoin Holders' Approach
CryptoQuant analyst Avocado onchain noted that Bitcoin's price hasn’t followed the typical downturn pattern seen in previous cycles. Instead, its price has been moving sideways within a large range, showing no clear direction. This could indicate a shift in Bitcoin holders' approach, with many choosing to hold long-term. Swyftx analyst Pav Hundal also noted that a significant portion of the market is now held by institutional investors who don't use hot wallets.
Analysts on Current Trends
Bitcoin advocate and network economist Timothy Peterson described the significant decline in Bitcoin active addresses as 'completely anemic.' Research firm 10x Research highlighted that despite expectations of a predictable four-year cycle after the April halving event, Bitcoin's market behavior is much more volatile. Analyst Will Clemente believes that Bitcoin's peak compound annual growth rate is likely behind us, and investors might need to invest more to see higher returns.
The current situation with active Bitcoin addresses indicates possible changes in holders' behavior and investment approaches, adding further uncertainty to Bitcoin's future price predictions.
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