The leading cryptocurrency, Bitcoin (BTC), is encountering difficulties as it attempts to break the $67,000 resistance level. Recently, Bitcoin reached a 24-hour high of $67,697 but then slightly pulled back, currently trading around $66,886.
What Caused the Decline in Interest?
This minor volatility is occurring amidst a noticeable decline in activity within the Bitcoin ecosystem, particularly in terms of new address creation. Six months ago, the network was bustling with activity due to the excitement surrounding spot Bitcoin ETFs, developments like Ordinals, and the anticipation of the upcoming halving event. This excitement pushed the weekly average number of new Bitcoin addresses to levels last seen in December 2017. However, recent data suggests a significant decrease in this trend, with the seven-day moving average of new addresses falling to levels not observed since 2018.
According to The Block’s data, the number of new addresses has dropped from 625,000 daily six months ago to 274,000 currently. This decline mirrors the situation in early 2018, when interest in joining the Bitcoin network also waned after a period of heightened enthusiasm. Other key metrics, such as miner revenue and hash rate, which are crucial indicators of the Bitcoin network’s health and security, have also hit record low levels.
How Does Santiment View BTC Trends?
Santiment’s data reveals that daily active addresses followed a similar downward trajectory, falling from over 73,000 in early March to below 20,000 at present. While this decline might appear negative, it is essential to consider the broader context. Historical data often shows that Bitcoin undergoes significant corrections before major rallies, especially post-halving.
Technical analyses suggest that Bitcoin could dip to around $60,000, a level deemed crucial for accumulating the liquidity needed to support a substantial upward trend after the halving. The relative strength index (RSI) has increased, indicating a short-term bullish outlook and suggesting that Bitcoin could soon turn its current resistance into support. However, the Chaikin money flow (CMF) signals a potential price correction may be on the horizon.
User-Useable Inferences
– The decline in new Bitcoin addresses suggests reduced interest in joining the network.
– Historical patterns indicate Bitcoin often corrects before significant rallies post-halving.
– Technical indicators suggest a potential dip to $60,000 but a bullish trend is plausible.
– Monitoring RSI and CMF can provide insights into future price movements.