Bitcoin in danger? The price does not rise and fewer people use it

After reaching new all-time highs in March, the price of Bitcoin has never risen above $73,000 again.

This long period of lateralization, also accompanied by some brief crashes, is leading fewer people to make transactions in BTC. 

The decline in active addresses and the drop in the price of Bitcoin

In March, the number of daily active addresses on the Bitcoin blockchain had a peak exceeding one million, and on average it almost always remained above the 800,000 mark.

Already in April, despite the halving, the average number of daily active addresses had dropped to 700,000, but it was between May and June that it dropped the most. 

The daily minimum peak of the last few months was reached on the day of the halving, but this is due to the fact that on that day many preferred to wait for the advent of the halving itself to carry out transactions. 

Excluding that, the second minimum peak was reached at the end of May below 440,000. 

It is almost a halving in just over two months, but contextualizing this dynamic reveals that it is less severe than it might appear at a superficial analysis. 

The data of the past

First of all, it must be said that from May to today there has been a small rebound, given that the average has returned to almost 600,000 active addresses daily. It is not a real recovery, but at least the downward trend seems to have stopped, and perhaps reversed, for months now. 

Taking as a reference the beginning of 2024, when there were about 700,000, a slight loss of interest remains evident. 

In fact, the current level is the lowest in the last four years.

However, in 2020, the year of the previous halving, the average daily level was perfectly in line with the current one, with minimum peaks not much higher than the current ones.

Of course, in 2021 during the full bubble, the number of active addresses even reached 1.2 million in one day, and it will take another similar bubble to touch those figures again. 

What is surprising is that during the last bear-market (the one in 2022) it never fell below 600,000, while in the previous bear-market (2018) it fell well below 400,000. 

In other words, this recently concluded cycle has turned out to be the best ever, from this point of view, and the new cycle that has just begun has started in a more or less similar way. 

The holding of transactions

A different discussion, however, concerns the number of daily transactions recorded on the blockchain of Bitcoin.

It should be noted, however, that in previous cycles there were no Inscriptions, Ordinals, or Runes. 

The historical peak of the number of transactions recorded on the Bitcoin blockchain in one day is from April 23, a few days after the last halving, when they surpassed for the first and only time the 900,000 mark. 

So, 2024 from this point of view has been the best year ever. 

However, if we do not take individual daily peaks as references, but the averages, from March to today there has even been a clear increase. 

At the beginning of the year, there were approximately 500,000 transactions recorded on average in a day on the Bitcoin blockchain, dropping below 400,000 during the price peak in March. This pace was maintained until the halving, then in May they rose to 600,000, a level that is still maintained today. 

So fewer active addresses, but more transactions. 

Four years ago they never exceeded 400,000, but this could be mainly due to the absence of the Inscription at that time. 

Analysis of today’s Bitcoin (BTC) price

After the peak in March, the price of Bitcoin entered a long period of lateralization.

To tell the truth, until the beginning of August the lateralization had occurred between $57,000 and $72,000, with some rare and brief exceptions, but starting from the collapse on August 5 these thresholds have fallen. 

Now it seems that the lateralization is happening between $56,000 and $70,000, even though there is the possibility of a drop to $55,000. 

There are also negative signals suggesting that in the short term the suffering could continue, perhaps pushing the price of BTC even below $55,000. It should be remembered that in fact the crash on August 5th stopped just below $50,000. 

The speech, however, changes if it is shifted to the medium/long term, because generally after the American elections the price of Bitcoin has always risen significantly over the course of the following 12 months.