Is the Bitcoin Rally Running Out of Steam? Analysts Worry That This Key Metric Isn’t Improving

cryptonews.com:

As the Bitcoin (BTC) price continues to go sideways just below the $25,000 level, traders are trying to assess whether the world’s largest cryptocurrency by market capitalization has enough oomph to muster another breakout above key resistance. For the last five days, sell pressure ahead of the August 2022 highs in the low $25,000s has kept a lid on prices.

Technicians think that a break above this level and the May 2022 lows around $25,400 would open the door to a swift move higher to the next major resistance area around $28,000. But some traders are becoming concerned that this year’s Bitcoin rally (BTC is up close to 50%) may soon run out of steam. Indeed, an analyst at respected crypto analytics firm CryptoQuant recently expressed concern about one key on-chain that isn’t improving sufficiently to imply further BTC price upside.

According to Yonsei_dent, a contributor to CryptoQuant’s Quicktake blog, the number of active Bitcoin addresses are not increasing that much, unlike during past Bitcoin bull market cycles. “Active Addresses is a metric that includes all addresses sending and receiving BTC, providing a look at how active market demand is,” noted Yonsei-dent, explaining that this essentially means that market demand for Bitcoin hasn’t increased that much.

According to data presented by crypto-analytics firm Glassnode, the most recent 30-day moving average of Bitcoin active addresses was around 954,000, only up around 50,000 since the start of the year, and still well within the 875,000-980,000ish range of the last 14 or so months.

Historically, sharp rallies in the Bitcoin price have coincided with sharp rises in the number of active addresses. Yongsei_dent points out the H1 2019 and post-pandemic 2020 to early