Exploring Bitcoin’s Recent Activity Decline: What History Suggests for the Future
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Analyzing the Recent Slowdown in Bitcoin Activity
Recent on-chain data indicates a significant reduction in Bitcoin’s activity over the past month. This trend prompts the question: what historical patterns might suggest about Bitcoin’s future trajectory?
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Comparing Current Active Bitcoin Supply Trends to September 2024
According to a recent analysis by CryptoQuant contributor Axel Adler Jr., the 30-day change in Bitcoin’s percentage of active supply has turned negative. This indicator monitors the proportion of Bitcoin’s circulating supply that has been part of transaction activities within a specified timeframe, in this case, 180 days.
The chart shared by the analyst illustrates the trend in the 30-day change of the Bitcoin % Supply Active across recent years.
From the chart, it’s evident that the 30-day change in the Bitcoin % Supply Active surged to a significant positive level late last year as Bitcoin experienced a bull run. This rise indicated that a substantial amount of supply, dormant for over six months, became active again. A similar trend was observed during the rally in the first quarter of 2024. This pattern aligns with the typical behavior observed during market rallies, where blockchain activity spikes as market enthusiasm increases.
Interestingly, despite Bitcoin’s price surpassing $100,000 earlier this year, no similar surge in activity was triggered. Instead, as the price stabilized above this level, the 30-day change has dramatically plunged into negative territory, implying a waning interest among holders.
Currently, the metric stands at -17%, indicating that 17% less of the 180-day supply is active now compared to the previous month. While this reflects a significant decrease in network engagement, historical trends suggest this may not necessarily be detrimental. As Axel Adler Jr. noted, a similar decline in the 30-day % Supply Active was observed in September, followed by a robust bullish momentum for Bitcoin.
In the temporary bearish phase following the May 2021 crash, a similar pattern transitioned into the second half of that year’s bull market. However, the 30-day change did not reach such negative levels at that time. Whether Bitcoin will follow past patterns or continue its current trend of subdued activity and price remains uncertain.
Current BTC Price Dynamics
Bitcoin experienced a dip to the lower $105,000 range yesterday, yet the asset’s sideways movement persists as its value has rebounded to $107,200.
The recent five-day trend in Bitcoin’s price movement is depicted in the chart below.
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