Bitcoin’s price has struggled to remain stable in the third quarter of 2024, with activity also declining to the lowest levels not seen in years. With the most recent crash last week, activity on the Bitcoin network took another negative plunge, dropping to levels not seen in three years. Naturally, this Implications for BTC Price And the PrimeXBT market research report has shown what could happen to BTC price following this development.
Bitcoin activity drops to 2021 levels
After the price of Bitcoin fell below $60,000, the total active addresses on the network dropped below 1 million. This development is worrying as it took a long time for the network to reach this milestone. However, the decline is not over yet and as the price falls towards $50,000, the total active addresses fall to 800,000.
According to a PrimeXBT market research report, the last time activity on the Bitcoin network was this low was in 2021, when the price was still hovering around $45,000. Naturally this has a number of implications for the price, which can be good or bad.
For one thing, a drop in active addresses suggests that investors are not as actively engaging with the blockchain. This manifests as fewer transactions. But on the other hand, it also means that the network will be less congested, leading to lower fees and faster transaction confirmation times.
With the drop in interest, the price of bitcoin may also be affected. The report suggests that this is a period where Low volatility in priceAs a result, prices are generally more stable and less likely to experience extreme fluctuations. “This is what we have seen for Bitcoin over the last 180 days, with Bitcoin trading in a range of 71,000 – 50,000,” the report said.
Moreover, a drop in active addresses may also suggest to investors that cryptocurrencies are not worth investing in. In such a case, the bearish sentiment may continue and the price of Bitcoin will continue to fall as investors would prefer to sell rather than buy in this situation.
However, this sentiment is not across all markets as it can also be a bullish signal for the price. The old adage for investing is “buy when there is blood in the streets” suggesting that it is best to buy at such times. So, for some, this dip, as well as the price rise, can be a bullish signal for the price. Slowdown in bitcoin priceThis may present a good opportunity for investors to invest at a price that may be considered a discount.
Featured image created by Dall.E, chart taken from Tradingview.com
