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, Active Bitcoin addresses at their lowest stage since April 2020, Forex-News, Forex-News
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Active Bitcoin addresses at their lowest stage since April 2020

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, Active Bitcoin addresses at their lowest stage since April 2020, Forex-News, Forex-News

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, Active Bitcoin addresses at their lowest stage since April 2020, Forex-News, Forex-News
, Active Bitcoin addresses at their lowest stage since April 2020, Forex-News, Forex-News

According to data from the analysis firm Glassnode, the number of active Bitcoin addresses, is at a very low point. The point at which these addresses are located, in terms of usability, is equivalent to the same in April 2020. Likewise, this decrease in activity could suggest weak demand, which in the long run would have an impact on the price of the digital asset .

The data was cited by the CoinDesk news portal. In this, it is highlighted that the low activity expresses a moment of low interest. In addition, it is highlighted that, during times of increased activity in addresses, this translates into an increase in supply and coincides with upward trends.

«The momentum cycle is over for now and the market is unable to attract new users at the same rate”Considers Charlie Morris of ByteTree. This is one of the factors that point to the prolongation of a bear market in the main cryptocurrency. Another factor that keeps the coiner community on hold is the upcoming difficulty setting. It is expected to be more than 26% on the downside.

Can the low number of active wallets influence the price of Bitcoin?

As noted above, the low number of active wallets could have a direct impact on the price of Bitcoin. This is Philip Gradwell’s appreciation of the Blockchain firm Chainalysis, consulted in the aforementioned news portal. According to him, the ebb and flow in the magnitude of wallet activity is proportional to value.

«A high magnitude of use reflects a higher demand for cryptocurrencies, which drives the price up», He stressed. According to this vision, the aforementioned dynamic also applies in the opposite direction. In other words, the current conditions for this indicator could be expected to signal a downtrend.

At the time of writing, the price of Bitcoin is hovering around $ 33,000, holding down 2.04% in the last 24 hours. It should be noted that it failed to stay above $ 36,000 after several attempts last Wednesday.

In that sense, the low number of active portfolios could have its contribution in this weakness of the bulls in the price of Bitcoin. However, it cannot be considered the only factor that could be playing to keep the price of the pioneering digital currency in the red.

Other possible factors in the price drop

The average of 10 minutes for each block of the Blockchain network, at this moment is distorted. The massive disconnections in China have caused an unprecedented drop in the hashrate of this digital currency. Last week, the time between blocks went up to about 20 minutes.

This last fact leads directly to an adjustment in the difficulty of the network. According to data from Btc.com, it is estimated that the next adjustment, which will be shortly, could fall by more than 26%. This has two results, the first is that it is easier to mine and the rewards to active miners will be higher. The other factor is that there is a more vulnerable network in terms of security.

A weak network generates nervousness among investors, who could move their capital to other assets. The selling pressure, in this case, would reinforce the downward trend of the price. Thus, the low number of active Bitcoin wallets plus the weakness of the network, complement each other to hinder the rise in the price of the cryptocurrency.

, Active Bitcoin addresses at their lowest stage since April 2020, Forex-News, Forex-News
According to the analysis firm Glassnode, the number of active Bitcoin wallets is as low as April 2020. Source: Glassnode

The capitulation of the miners

The migration of miners from China to as far away as the United States is a slow and complex process. Meanwhile, those miners will have to liquidate part of their bitcoins to cover the huge expenses of moving and reinstalling their infrastructures.

That sale by miners, known as ‘capitulation’, could flood the bitcoin market. In this way, the selling pressure could be an additional factor to the weakness of the Bitcoin price in the buy and sell market. Probably, this fact is behind the exhaustion in terms of the activity of the addresses.

All these factors must be taken into account when making a fundamental analysis of the price trend. Likewise, it should be taken into account that there are other factors that continue to exert their influence. Among them, the active campaign to discredit digital mining stands out.

It must be remembered that, precisely, this narrative managed by Tesla CEO Elon Musk, was responsible for driving the price to the current hole. In mid-May, the price of the popular digital currency was approaching $ 65,000, when the aforementioned businessman gave his lunge. At that time it announced the suspension of the use of BTC in the trade of its electric vehicles due to the alleged contamination from mining. The result was a sharp drop in price.

Signs of exhaustion

Amid this negative news conjuncture, interest in cryptocurrency has dropped considerably. Consequently, this behavior can be seen in the low volume of active Bitcoin portfolios in recent weeks. The number of them is 758,165, which is equivalent to April 2020.

It can be considered that the lack of positive news that outweighs the negative ones is a factor that generates exhaustion. A good part of the people who have their savings in Bitcoin are witnessing its decrease in fiat equivalence, which generates nervousness.

That anxiety, in simple terms, influences that, for now, those small investors do not want to continue injecting into Bitcoin. Some crypto influencers, like MicroStrategy’s Michael Saylor and Twitter CEO Jack Dorsey, are making efforts to keep investors excited.

One of these efforts the The B-Wrod, an event that will take place later this month. It seeks to attract institutional investors and large companies to invest in Bitcoin. It should be noted that Elon Musk and Jack Dorsey will meet there to discuss the essential aspects of Bitcoin.

Data to take into consideration

  • The Bitcoin market appears to enter a stage of exhaustion, triggered by selling pressure and other negative news.
  • All these facts could be the cause of the current drop in demand, which is reflected in the decrease in the number of active Bitcoin wallets.
  • The exhaustion and selling pressure would not have allowed Bitcoin to stay above $ 36,000 per coin.
  • At the time of writing, the price of the pioneer cryptocurrency is barely holding above $ 33,000.
  • The momentum of the cryptocurrency is failing to increase the rate of attraction of movement.

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