The recent decline in Bitcoin active addresses and its implications on market activity.
According to some analysts, the major reason behind the sharp decline in active addresses is the large market grabbed by institutional cash.
Bitcoin’s abnormal activity is now reaching a point that cannot be expected, especially after hitting its all-time high, which adds uncertainty to the Bitcoin price’s future price movement.
The sharp decline in Bitcoin active addresses, which represent total active users on the blockchain, has reduced significantly since the start of the current year. The pattern came into existence after the asset price sparked in 2014 and after the 2021 bull cycle.
According to the Sept. 3 research report from CryptoQuant contributor “Avocado onchain,” Bitcoin price is not behaving like it usually does during a downturn phase. However, it has been ranging and more often moving sideways within a broad range, exhibiting no clear direction.
The durable decline in wallet activity shows that users ceased their activities and can be considered ‘freezing’ their wallets. The lead analyst at Swyftx Pav Hundal said to a crypto trading firm that “a large and growing portion of the market is being dominated by institutional players that do not store their coins in hot wallets.”
While the amount of daily net new addresses has been declining constantly since the first ETFs appeared in January. One might infer that this means that wallet address movement data is getting less useful as time goes by.
“Active address numbers have been in freefall since the ETFs launched in January. It’s possible that what we’re seeing right now is a slow decline in the relevance of wallet address movement data.”
Bitcoin‘s advocate Timothy Peterson says “Timothy Peterson” to explain the declining activity on Bitcoin‘s blockchain. He further stated that it might be because people prefer ETFs or due to some other reason.
Bridging this, however, is a revelation made by 10x Research stating that most might expect a predictable four-year cycle for Bitcoin after the April halving, but that is not always the case.
A Sep. 3 post on X by 10x Research explained that the Bitcoin current movement is unpredictable, which can turn into a massive gain after a price shift and demand rise.
Meanwhile, some analysts believe that the Bitcoin annual commuting return is almost over, now people need to put in more investment to see better returns.
