Bitcoin network activity rebounds after a 3month decline
Bitcoin (BTC) network activity had been on a downward trend, with daily active addresses decreasing since March. However, a recent uptick in this metric indicates a renewed interest in using Bitcoin, potentially driving up demand for BTC.
Renowned on-chain analyst, Ali Martinez, identified a breakout in the downtrend of daily active addresses on June 8 on Santiment. Martinez pointed out that 765,480 Bitcoin addresses became active in the last 24 hours, signaling a positive sign for a continued bull run.
The surge in network activity is evident in the chart shared by Martinez on Twitter, showing a significant increase in daily Bitcoin addresses. This shift in activity is a promising indication that the bullish momentum for BTC will persist.
While the daily active addresses are on the rise, other Bitcoin network metrics are also showing a decline. On-chain transaction volume and spot trading volume for Bitcoin have hit all-time lows, as reported by Finbold.
Additionally, Bitcoin transaction fees soared to a new record high of $195 on June 8, coinciding with the spike in network activity observed by Martinez. This increase in fees could be attributed to the heightened competition for block space as more addresses become active.
Furthermore, monitoring exchange reserves can provide valuable insights into investor sentiment. Currently, exchange reserves are at their lowest levels, indicating a trend of buying and withdrawal of Bitcoin by investors, a bullish signal according to Martinez.
As the finance market eagerly anticipates the upcoming FOMC meeting on June 12, analysts expect heightened volatility across various asset classes, including cryptocurrencies like Bitcoin. The decision on interest rates could have a significant impact on the market.
In conclusion, while the recent increase in daily active addresses and decline in exchange reserves suggest a bullish outlook for Bitcoin, investors should exercise caution and consider the speculative nature of investing in cryptocurrencies. It is essential to conduct thorough research and understand the risks involved before making any investment decisions.