• The metric of “active addresses” is used to measure the daily total amount of Bitcoin addresses participating in some transaction activity on the chain.
• Demand for Bitcoin has been returning recently, but the rise has been slower than what previous cycles saw at a similar stage.
• The active addresses indicator has seen some increase with the latest rally in the price of Bitcoin, but the rise has still not been too significant.
Bitcoin Active Addresses
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. 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 cryptocurrency is actively attracting users to trade on its chain currently. On the other hand, low values imply not many users are making transfers on its blockchain at present moment.
Bitcoin Activity Chart
Here is a chart that shows trend in bitcoin active addresses over last few years: Looks like value of metric hasn’t moved much recent weeks | Source: CryptoQuant As shown above graph ,bitcoin active address had come down to relatively low value during bear market ,but recently some improvement have registered indicator . During volatile moves investors rush to trade ,hence why metric can show elevated values . A example of activity suddenly coming back like this can be seen around time FTX collapse chart . As price began move sideways again following crash ,active address also sank down again .
Demand For Bitcoin
The metric has seen some increase with latest rally price bitcoin ,but rise still not been too significant . In bear markets price usually endlessly consolidating ,so not many users find coin interesting trade . During volatile moves however investors rush to trade hence why metric can show elevated values .
To sum up ,the active address metrics have registered improvement with latest rally bitcoin price but overall still slow compared what previous cycle saw similar stage . Investors should take note when this indicator showing elevated values as could mean demand asset strong currently .