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With the Bitcoin price struggling to stay afloat in Q3 2024, activity has declined as well, reaching lows not seen in years. With the most recent crash last week, the activity on the Bitcoin network took another negative hit, causing its to plummet to levels not seen in three years. Naturally, this has implications for the BTC price and the PrimeXBT Market Research report has shown what could happen to the BTC price following this development.
Bitcoin Activity Plummets To 2021 Levels
Following the Bitcoin price plummeting below $60,000, the total active addresses on the network fell below 1 million. This development is concerning given how long it took for the network to reach this milestone. However, the decline was far from over and as the price fell toward $50,000, total active addresses have plummeted to 800,000.
According to the PrimeXBT Market Research report, the last time that activity on the Bitcoin network was this low was back in 2021 when the price was still trending around $45,000. This naturally has a number of connotations for the price, which could be either good or bad.
Source: PrimeXBT Market Report
For one, the decline in active addresses suggests that investors are not actively engaging with the blockchain. This manifests as fewer transactions being carried out. But on the flip side of this, it also means that the network will be less congested, leading to lower fees and faster transaction confirmation times.
With the decline in interest, the Bitcoin price could also be affected. The report points out that this is a period where there could be less volatility for the price. As a result, prices are usually more stable and less likely to experience wild swings. “This is what we’ve seen for Bitcoin over the past 180 days, with Bitcoin trading in a range of 71,000 – 50,000,” the report states.
Furthermore, the decline in active addresses could also suggest to investors that the cryptocurrency is not worth investing in. In such a case, the bearish headwinds could continue and the Bitcoin price would continue to fall as investors choose to sell rather than buy in this situation.
However, this sentiment is not shared by all the market as it could also be bullish for the price. The old investing adage which goes “Buy when there’s blood in the streets” suggests that times like these are the best to buy. So, for some, this decline, coupled with the slowness of the Bitcoin price, could present a perfect opportunity for investors to get in at a price that could be considered a discount.
Featured image created with Dall.E, chart from Tradingview.com
