In 2024, the number of active addresses on the Bitcoin network have dropped to levels not seen in three years. According to data from CryptoQuant, the number of active addresses has returned to figures last observed when Bitcoin was priced at around $45,000.
Reduced Bitcoin Activity Signals Market Disinterest
This means that the overall activity on the network has reduced, which may mean that fewer transactions are being conducted on this network. This may be because there is little interest in owning Bitcoin or it could mean that the market is not interested in it.
The reduced activity on the Bitcoin network could harm the price of Bitcoin in the foreign exchange market. Such measures mean that, in return, there are usually fewer trades that take place, and this directly affects the fact that there are reduced fluctuations in price. It can lead to situations in which the price increases peak for a longer period and temporarily stabilizes, which can worry investors who regard it as a sign of decreased demand for the cryptocurrency. The price of Bitcoin has been ranging within $71,000 to $50,000 for the past 180 days.
Decreased BTC Activity Sparks Debate on Future Relevance
Some investors might find the situation with the decrease in active addresses and the subsequent price reduction as a good buying signal. It could be seen as an opportunity to buy bitcoins at cheaper prices with an expectation of price increase in the near future.
However, if a decrease in network activity is perceived as the weakening or irrelevance of the asset, this may result in even less attention being paid to it. This might lead to formation of new support levels which may be more points of entry for investors in the market.
Altogether, the trends, observed by CryptoQuant, for 2024 indicate a decrease in the level of active addresses on the Bitcoin network and in the popularity of the cryptocurrency. Its consequences can be either the preservation of this trend for an extended period or renewed interest in Bitcoin. Following these trends will likely remain relevant for investors as they make their decisions in the contemporary market.
