The leading cryptocurrency Bitcoin (BTC) is experiencing a phase where it is trying to surpass the $67,000 resistance level. Recently, it reached a 24-hour high of $67,697 but then slightly retreated and is currently trading around $66,886.
Interest in Bitcoin Declines
The minor volatility occurred at a time when the Bitcoin ecosystem, especially in terms of creating new addresses, showed signs of declining activity. Six months ago, the Bitcoin network was full of activities supported by the excitement for spot Bitcoin ETFs, developments like Ordinals, and the anticipation of the upcoming halving event. This led to the weekly average number of new Bitcoin addresses almost reaching peak levels last seen in December 2017. However, recent data may indicate a significant decline in this trend. The seven-day moving average of new addresses on the Bitcoin network has fallen to levels not seen since 2018.
Specifically, according to The Block’s data, the number of new addresses dropped from 625,000 daily six months ago to 274,000 at the time of writing. This decline in new address creation reflects the situation in early 2018 when interest in joining the Bitcoin network similarly waned after a period of increased interest. Other key metrics also showed a decline. For example, miner revenue and hash rate, critical indicators of the Bitcoin network’s health and security, reached record low levels.
Santiment’s BTC Report
According to Santiment’s data, daily active addresses also followed the same path, falling from over 73,000 in early March to below 20,000 at the time of writing. While the decline in these metrics may seem negative, it could be important to understand the broader picture. Historical data may show that Bitcoin often undergoes significant corrections before a major rally, especially after the halving.
Technical analyses may indicate that Bitcoin could drop to around $60,000, a level seen as crucial for gathering the liquidity needed to support a significant upward trend post-halving. The relative strength index (RSI) recorded an increase, highlighting a short-term bullish outlook by suggesting that Bitcoin could soon turn its current resistance into support. However, the Chaikin money flow (CMF) could indicate that a potential price correction might be near.
