Onchain Highlights

DEFINITION: Bitcoin’s active addresses are the number of unique addresses that were active in the network, either as a sender or receiver. Only addresses that were active in successful transactions are counted.

Bitcoin’s active addresses have seen significant fluctuations recently. Following the April 2024 halving, the number of active addresses dropped to a three-year low, driven by a spike in transaction fees and network congestion. This fee increase, partly due to new protocols like Runes, has impacted Bitcoin’s utility for daily transactions, causing a notable decline in network activity.

Historically, active addresses have been a reliable indicator of market phases. For instance, active addresses provided insights into user engagement and market sentiment during previous bear markets. 2022 data showed a stagnation in active addresses, aligning with typical bear market patterns observed in past cycles. The cyclical nature of Bitcoin’s market forces usually has periods of reduced activity followed by renewed engagement as market conditions improve. However, current lows in active addresses haven’t been seen since 2019, while Bitcoin is back near all-time highs.

The post Bitcoin active addresses plummet to five-year low appeared first on CryptoSlate.

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