• Bitcoin’s price has been trading just below the $25,000 level for the past five days.
• Analysts are worried that Bitcoin’s rally may soon run out of steam due to a lack of improvement in active addresses.
• However, other on-chain metrics such as daily transactions suggest that the Bitcoin network is still active and could lead to a break above resistance at $25,400.
Bitcoin Price Sideways Below $25,000
The Bitcoin (BTC) price continues to go sideways just below the $25,000 level, with traders trying to assess whether the world’s largest cryptocurrency by market capitalization has enough oomph to muster another breakout above key resistance. For the last five days, sell pressure ahead of the August 2022 highs in the low $25,000s has kept a lid on prices. Technicians think that a break above this level and the May 2022 lows around $25,400 would open the door to a swift move higher to next major resistance area around $28,000.
Analysts Worry That Active Addresses Aren’t Improving
An analyst at respected crypto analytics firm CryptoQuant recently expressed concern about one key on-chain metric that isn’t improving sufficiently – active addresses. Active Addresses includes all addresses sending and receiving BTC and provides an indication of how active market demand is for Bitcoin; however Yonsei_dent noted that this hasn’t increased much since 2021 began. Data presented by crypto-analytics firm Glassnode showed that most recent 30-day moving average of Bitcoin active addresses was around 954,000 – only up around 50,000 since start of year – and well within 875,000-980,000ish range of last 14 or so months.
Past Bull Markets Correlated With Sharp Rise In Active Addresses
Historically sharp rallies in Bitcoin price have coincided with sharp rises in number of active addresses; examples include H1 2019 and post-pandemic 2020/early 2021 rallies which led to periods of strong market demand for Bitcoin. This suggests that unless active address numbers increase significantly there may be limited upside potential left in current rally cycle for BTC price appreciation.
Other On-Chain Metrics Show Network Activity Is Still High
The good news is that plenty of other on-chain metrics paint a better picture when it comes to network activity levels surrounding Bitcoin; notably 30-day moving average number of daily network transactions recently rose above 300k for first time since April 2021 when BTC price was around $60k – while it doesn’t always correlate with BTC price rallies it certainly isn’t negative either!
Overall analysts remain divided between those who believe bulls can push past resistance at $25k+ into new highs closer towards $30k mark versus those concerned about lacklustre performance from some key metrics like active address numbers which don’t yet point towards further upside potential from current rally levels for BTC prices yet