A well-known market intelligence tool, IntoTheBlock, has pointed out a strange trend in the current state of Bitcoin that has analysts scratching their heads.
Bitcoin had a strong first quarter in 2024, thanks to more demand from spot exchange-traded funds (ETFs) and large buyers. This rise pushed Bitcoin above its previous all-time high (ATH), which is different from previous cycles where ATHs usually came after the halving event.
Even though people were optimistic at first about this performance, Bitcoin has since entered a phase of sideways stabilization after its all-time high. Recently, IntoTheBlock released an update that talks about this issue and draws attention to an interesting trend in Bitcoin’s network activity: a major rise in transfer activity that sets new records for the Number of Transactions measure.
Bitcoin Price Drops Amid Adoption Concern
There were a lot more transactions after the Runes protocol was added. This is because it made it easier to mint fungible tokens on the BTC network. IntoTheBlock draws attention to the presence of major investors (called “whales”) and increased network activity, which makes one wonder: why is everything so confusing?
Another important measure, “New Addresses,” holds the key to the answer. This measure keeps track of how many new BTC addresses are created every day, which shows how fast the network is being used. In the past, major jumps in new addresses have happened at the same time as bull markets. This shows that investors are more interested and helps the market move forward.
But, despite BTC recent all-time high, the number of new addresses has gone down, which was not expected. Analysts are confused by this difference, which points to a possible slowdown in new user growth that could be stopping Bitcoin from going up.
The data reveals that this surge in usage and whale activity does not involve a significant influx of new participants. In fact, the number of new BTC users has plummeted to a multi-year low, even falling below the levels seen during the 2018 bear market.
Bitcoin is still trading around $65,000 at the time of this report, which is a 7% drop from the previous week. Many people are closely watching to see if the cryptocurrency will soon pick up speed and attract new users.
(Image source: IntoTheBlock.com/Dall-E; chart source: TradingView.com)
