On-chain data shows the Bitcoin Active Addresses metric has been going up recently. Here’s what this could mean for the asset’s price.
Bitcoin Active Addresses Has Recently Reversed Its Trend
As explained by CryptoQuant author IT Tech in a new post on X, demand for Bitcoin appears to be returning among the investors, according to the trend in the Active Addresses.
The Active Address is an indicator that keeps track of the total number of addresses participating in some transaction activity on the BTC blockchain.
When the value of this metric is high, it means many unique addresses are making moves on the network. Such a trend implies a high interest in trading assets among investors.
On the other hand, the low indicator suggests the holders may not pay much attention to the cryptocurrency as they aren’t making too many transactions.
Now, here is a chart that shows the trend in the 14-day Exponential Moving Average (EMA) of the Bitcoin Active Addresses over the past year:
Looks like the value of the metric appears to have been on the rise in recent days | Source: @IT_Tech_PL on X
As is visible in the above graph, the 14-day EMA of the Bitcoin Active Addresses had been on a consistent decline earlier in the year, but since last month, the indicator has bottomed out and seen a sharp reversal in trend. This suggests that user activity on the network is making a comeback.
Historically, the asset getting such high interest has generally led to volatility. This is because a large amount of moves happening at once can provide the fuel needed for sharp price action to occur.
The volatility emerging from this can take the cryptocurrency in either direction, meaning that a rise in Active Addresses may not necessarily lead to a bullish outcome.
That said, a high indicator value is generally needed to maintain a rally; price runs that fail to attract attention usually go down out before long. Thus, the recent recovery seems set in terms of at least this.
Another indicator that gauges investor demand is the volume of the retail investors (that is, of transfers less than $10,000). As an analyst pointed out in a CryptoQuant Quicktake post, the 30-day change in the retail volume has recently witnessed a surge into positive territory.
The value of the indicator appears to have been going up recently | Source: CryptoQuant
This surge in retail volume is another indication that demand for Bitcoin has been returning recently, which could add to the sustainability of the current run.
BTC Price
Bitcoin has seen a setback in its recovery during the past day as its price has come down to $67,200 after having traveled beyond $69,000 just yesterday.
The price of the coin appears to have been riding an uptrend recently | Source: BTCUSDT on TradingView