Historic drop : Less than a million active addresses on the Bitcoin network !

The Bitcoin blockchain, often seen as a key indicator of the vitality of the crypto market, is currently experiencing a period of minimal activity. The number of active addresses on the network has dropped to a historic low, with fewer than one million users. While this indicator reveals a significant decline in investor interest, this situation could have profound consequences for the Bitcoin market, particularly with regard to the crypto’s ability to kickstart a bullish cycle.

A historic drop in active addresses on the Bitcoin network

On-chain data reveals that the number of active addresses on the Bitcoin network has fallen below the one million mark, a threshold that had not been reached since July 2021. This period coincided with China’s strict mining ban, a situation that caused a sharp collapse in Bitcoin prices and a marked decline in activity on the blockchain. At the time, the ban forced many miners to leave China, which was then one of the world’s largest hubs for this activity. Today, the active address indicator, which reflects the number of users interacting daily with the network, is experiencing a similar decline. Such a situation makes Bitcoin less attractive to speculators.

This situation is accentuated by the comparison of the 30-day and 365-day moving averages of active addresses. Data shows that activity is below the annual average, illustrating a growing disaffection among users. During the Bitcoin price surge earlier this year, active addresses temporarily increased, but the downward trend quickly resumed with price stabilization.

Potential consequences for the Bitcoin market

Historically, every major bullish market movement has been preceded by a significant increase in the number of active users. Indeed, a sustainable market recovery will require an uptick in network activity. In other words, without a renewed interest from users, Bitcoin might struggle to initiate a new bullish cycle, despite positive signals from other indicators.

This prolonged decline in active addresses could also be interpreted as a sign of stagnation in the crypto market as a whole. If new users do not enter the market en masse, the broader adoption of Bitcoin and cryptos could be delayed. However, some analysts believe that this slowdown phase could be the calm before a new bullish storm, a period where institutional investors, less sensitive to short-term fluctuations, continue to accumulate positions. In any case, close monitoring of the evolution of active addresses remains crucial to anticipate the next market moves.

The drop in active addresses on the Bitcoin network should not be interpreted as a sign of a definitive decline for crypto. While current activity is low, market cycles show that periods of calm often precede significant bullish moves.