Gauging Bitcoin’s [BTC] price trends as key metric hits new peak
- Bitcoin’s active addresses defy expectations, setting a new record and potential market shifts.
- Long-term holders of Bitcoin soar to an all-time high, with implications for future price dynamics.
A recent deviation from one of Bitcoin’s [BTC] key metrics that may significantly impact its price trend has just been observed per new data. This unexpected shift has caught the attention of investors and analysts alike as they try to decipher its implications for the cryptocurrency’s trajectory.
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Furthermore, some reports suggest a gradual shift in the behavior of BTC holders was affected by the FTX collapse. Coins not spent since the incident are slowly becoming part of long-term holdings.
Bitcoin active addresses set a record
Like many other financial assets, Bitcoin is subject to trends and patterns that can provide insight into its price movements. New data from Cryptoquant has revealed a fascinating twist in Bitcoin’s active addresses pattern.
The chart indicated that Bitcoin’s price tends to ascend following a hash rate drop when the number of active addresses surpasses a certain range. For the better part of this year, the active addresses metric dwindled between 900,000 to 1.1 million addresses per day.
However, the pattern collapsed on 1 May. Active addresses metric skyrocketed to a new record of nearly 1.3 million – the highest figure in over a year.
The surge in active addresses suggests a potential shift in the market dynamics, sparking interest and speculation amongst traders and analysts alike.
Post-FTX Bitcoin shifting to long-term holdings
In the aftermath of the FTX collapse, an intriguing phenomenon was observed: a gradual accumulation of unspent BTC. These coins, untouched for a period exceeding 155 days, tend to transition into long-term holdings (LTH).
Data from Glassnode revealed a staggering 14.3 million coins falling under this category. Also, this accumulation propelled the number of long-term holders to an all-time high, constituting a remarkable 74% of the circulating supply.
Possible trigger for the address metric
The disruption in the pattern of active addresses can be partially attributed to the enthusiasm surrounding the Ordinals craze.
Furthermore, data from Dune Analytics indicated that daily inscriptions experienced a significant surge on 1 April. The surge coincided with the day the active address metric reached its highest point in nearly a year.
This suggested a correlation between the influx of new participants and the spike in active addresses.
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Implications of LTH activation
Additionally, with the shift in the long-term holding (LTH) threshold, about 26% of the total Bitcoin supply was currently active. This implied that long-term investors hold a significant portion of Bitcoin.
Also, it is important to consider the potential impact if these long-term holdings were to be introduced for trading. The influx of such a huge supply could trigger a price drop.