Bitcoin Demand On The Rise, But Slow Compared To Previous Cycles

Bitcoin on-chain data suggests that demand for cryptocurrency is on the rise again, albeit slower than observed during previous cycles. According to CryptoQuant, a key indicator of market activity is the “active addresses” metric, which measures the daily number of unique Bitcoin addresses engaged in transactional activity on the blockchain.

Bitcoin’s demand rise is positive but slow vs. past cycles. Investors remain cautious as active addresses recover from a bear market, and the recent price rally boosted the metric, indicating increasing adoption. “Active addresses” measure individual daily lessons involved in Bitcoin transactions.

Bitcoin Active Addresses Haven’t Grown Much Recently

Active addresses metric attached to detrended price oscillator (DPO). However, the DPO trend shows early signs of exiting the bear market. Demand is still below the levels in previous cycles, and Bitcoin has room for growth as adoption continues.

External factors, such as fears surrounding macroeconomic conditions, could delay the sharp improvement of Bitcoin’s network fundamentals. This could impact investor risk appetite, leading to caution and slow cryptocurrency adoption. Although there has been some increase in demand, investors are still hesitant to embrace Bitcoin fully.

When the value of this metric is high, it means many addresses are making transactions on the network right now. Such a trend suggests cryptocurrency actively attracts users to trade on the chain.

Moreover, low values imply low blockchain usage/activity, and this trend can suggest that demand for the asset is now down.

Past cycles showed a rapid increase in metrics after the bear market. The current process has a slower demand rise; investors may need to be more open. In addition, investors may wait for more favorable conditions to invest in. Caution remains due to cryptocurrency’s volatility.

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In conclusion, while demand for Bitcoin is rising, it is still slower than in previous cycles. The current process shows early signs of exiting the bear market, but external factors and caution among investors may delay a sharper improvement in network fundamentals.

According to CoinMarketcap data, on the daily chart, Bitcoin is currently trading at $$23,009, reflecting a 3.10% decrease in the last 24 hours and down 6.31% in the week.

Source: CoinMarketcap

The author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.

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