• Bitcoin Active Addresses recently have not seen much growth, as indicated by an analyst in a CryptoQuant post.
• The indicator measures the daily total amount of Bitcoin addresses that are participating in some transaction activity on the chain.
• With the latest rally of Bitcoin’s price, the metric has seen some increase, but it is still not too significant.
Bitcoin On-Chain Data Shows Low Demand Recently
On-chain data suggests that demand for Bitcoin has been returning recently, but at a slower pace than seen in previous cycles at this stage.
What Is Measured With Active Addresses?
The relevant indicator here is the “active addresses,” which measure the daily total amount of Bitcoin addresses that are participating in some transaction activity on the chain. This metric only counts unique addresses, meaning an address taking part in multiple transfers within one day is counted once. It also accounts for both senders and receivers in its measurement. When values are high here, it indicates that many users are making transactions on the network currently and thus demand for the asset must be high as well. Conversely, low values suggest not many users are making transfers on the blockchain at present, implying low demand for the asset currently.
Recent Trend In Active Addresses
A chart showing recent trends in active addresses paints a picture of market activity rapidly changing after bottoming out during previous cycles:
Looks like value of this metric hasn’t moved much lately | Source: CryptoQuant
The graph shows how active address values dropped to relatively low levels during bear markets while suddenly spiking up when FTX collapsed and then quickly dropping again following sideways movements afterwards. With the latest rally of Bitcoin’s price however, more improvement was registered with this indicator – although still not significant enough yet.
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Recent rallies with Bitcoin’s price have led to some improvement with active address metrics – though still not as significant as was seen previously at similar stages during past cycles