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Title: Bitcoin On-Chain Demand Rising, But Slower Than In Previous Cycles Post by: Hydrogen on February 26, 2023, 11:57:52 PM Quote On-chain data shows demand for Bitcoin has been returning recently, but the rise has been slower than what previous cycles saw at a similar stage. Bitcoin Active Addresses Haven’t Grown Much Recently As pointed out by an analyst in a CryptoQuant post, the market activity rapidly changed after the bottom formed during the previous cycles. The relevant indicator here is the “active addresses,” which measures the daily total amount of Bitcoin addresses that are participating in some transaction activity on the chain. The metric only measures unique addresses, meaning that if an address takes part in multiple transfers in a single day, it’s still counted only once. The indicator also accounts for both senders and receivers in this measurement. When the value of this metric is high, it means a large number of addresses are making transactions on the network right now. Such a trend suggests that the cryptocurrency is actively attracting users to trade on the chain currently. On the other hand, low values imply not many users are making transfers on the blockchain at the moment. This kind of trend can suggest that demand for the asset is low currently. Now, here is a chart that shows the trend in the Bitcoin active addresses over the last few years: https://i.ibb.co/WtQFz06/chartchart.jpg Image link: https://i.ibb.co/WtQFz06/chartchart.jpg (https://i.ibb.co/WtQFz06/chartchart.jpg) As shown in the above graph, the Bitcoin active addresses had come down to a relatively low value during the bear market, but recently some improvement has been registered in the indicator. In bear markets, the price is usually endlessly consolidating, so not many users find the coin that interesting to trade. During volatile moves, however, investors rush to trade, hence why the metric can show elevated values. A recent example of activity suddenly coming back like this can be seen around the time of the FTX collapse in the chart. As the price began to move sideways again following the crash, the active addresses also once again sank down. The metric has seen some increase with the latest rally in the price of Bitcoin, but the rise has still not been too significant. In comparison, the 2018-2019 cycle saw the activity rapidly going up following the bear market bottom formation. The quant has also attached the annual active addresses detrended price oscillator (DPO) to better illustrate the difference between the current and the previous cycle. As is visible in the graph, the trend in the DPO is only showing early signs of the bear market exit so far in the current cycle. “At this time, fears external to the network may be impacting full demand returns and delaying a sharper improvement in network fundamentals,” explains the analyst. “The understanding of a possible turbulent year in terms of macroeconomic conditions has not yet enabled a feeling of greater risk appetite and investors remain cautious.” https://bitcoinist.com/bitcoin-on-chain-demand-rising-slower-cycles/ .... There are usually not many technical or market mechanic indicators cited when speculating upon future bitcoin price trends. This is partially due to a significant amount of trading volume occurring off chain with banks and other entities who trade BTC in considerable volumes, whose statistics are not publicly disclosed. Here we have a case where we can confirm that on chain volume and demand are rising. Although not as quickly or enthusiastically as in previous cycles. These statistics may also confirm that bitcoin and crypto assets are continuuing to gain mainstream mass adoption. Which could correlate with unbanked demographics. In countries like the USA populations of homeless or "unhoused" demographics are on the rise. Considering its more difficult to have a bank account while lacking a permanent home address, it could represent a natural progression for many to turn to assets like bitcoin which have fewer account restrictions. Title: Re: Bitcoin On-Chain Demand Rising, But Slower Than In Previous Cycles Post by: jackg on February 27, 2023, 12:28:10 AM "This kind of trend can suggest that demand for the asset is low currently." - it could also mean supply is low too? If there's not as many new people in the space or not many have returned yet to move their funds then there might be fewer coins circulating than would normally.
What if a lot of the traders who believed the "bitcoin will go to $300k" have just been lurking and holding their coins. Or what if ftx scared people off so much there's people using dexes or peer to peer methods so fewer addresses are being used? Title: Re: Bitcoin On-Chain Demand Rising, But Slower Than In Previous Cycles Post by: dansus021 on February 27, 2023, 12:30:59 AM It's just my opinion but I think the older addresses are still in dormant/sleep mode. Maybe we don't see many new active addresses because some people might use the old address and buy bitcoin and just hold it and see where the market is going to be.
And we are still at an early stage of bullish maybe this become one of a reason too, or we can see more active address when the world economy is settling down interest rates down and etc. Title: Re: Bitcoin On-Chain Demand Rising, But Slower Than In Previous Cycles Post by: el kaka22 on February 27, 2023, 10:01:19 PM I would guess that even if it is not a bull run that will break above ATH price, it is definitely a bull run that will go up as much as we would like to see it. This is a good result and should always be something that could help people out in the long run.
I believe that we shouldn't be really worried about the upcoming cycle and how much it will go up, as long as it goes up that is something good for us to be proud about. I am happy and excited about the potential we have, and it will definitely end up with something that will benefit us all. I wouldn't get a x100 leverage and long it, maybe it will have some downs here and there, but it will do great in the long run. |
