Bitcoin has witnessed the development of troublesome emancipation. This raises some questions about the sustainability of cryptocurrency growth. This is the most important thing ever. How does it affect price?
Network activity when prices drop as they rise
In a quick take post on the CryptoQuant platform, Crypto Pundit Cryptoonchain highlighted an increase in negative differences between Bitcoin prices and the number of active addresses in Cryptocurrency’s network.
Analyst reports relied on Bitcoin Active Address Metrics, but obviously they track the number of unique wallet addresses participating in transactions on the network within a given time period. The value of this metric reflects the amount of user activity or the engagement of the cryptographic network.
Source: CryptoQuant
From the chart shared by CryptoonChain, “There is a clear negative divergence between the price of Bitcoin and the 14-day moving average of active addresses.” What this means is that a wider Bitcoin Bull Rally is happening against the backdrop of reduced network activity and user engagement.
On-chain analysts further explained that such divergence usually serves as an early warning or signal that bullish momentum may be losing its strength. Thus, as cryptocurrencies lose their bullish momentum, the risk of BTC prices undergoing correctional activity can increase simultaneously.
Aside from the risk of corrections, there is also the possibility that Bitcoin network activity will be further reduced. If this occurs, demand for BTC could be even weaker and could be temporarily converted into increased sales pressure.
BTC buyers are losing to sellers
In another post from Cryptoquant, the online Pandit Arab chain published data from Binance showing that the net pressure of Bitcoin and the price of Bitcoin remains negative for most of the day. This means more sales transactions are running compared to Binance purchases over the last 24 hours.
Crypto experts also explained that buyers’ attempts to exceed $113,000 in bitcoin prices are insufficient.
On the positive side of the market outlook, Arab chains pointed out that “clear, lasting positive turns” and over $113,000 under buy-side pressure is important to ensure that market photos are a little more optimistic. As of the time of reporting, Bitcoin is valued at around $109,610, not reflecting any significant movements over the past 24 hours.
The price of BTC on the daily timeframe | Source: BTCUSDT chat on TradingView
ISTOCK featured images, TradingView chart
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