Recent data from the analytical platform IntoTheBlock indicates a resurgence in daily new Bitcoin addresses, suggesting that retail investors are gradually returning to the cryptocurrency market. This marks a shift from the steady decline observed since November 2023, reflecting a possible renewal of interest among smaller investors.
The trend of increasing new Bitcoin addresses suggests that more participants are re-entering the market, potentially signaling a positive development for the cryptocurrency’s broader adoption.
In June 2024, Glassnode data showed a significant drop in the number of new Bitcoin addresses, reaching a low of 203,536. However, by August, this number had increased, fluctuating between 286,000 and 337,000 new addresses.
This growth is seen as a positive sign by IntoTheBlock, which believes it could lead to a more stable and balanced market. Such an increase in new participants might provide a stronger foundation for Bitcoin’s future growth, especially after the recent fluctuations in its price.
Bitcoin Sees Resurgence in New Addresses as Market Rebounds After Recent Dip
Bitcoin experienced a notable price dip in early August, falling to $49,221 on August 5. However, it has since recovered and is now nearing the $61,000 mark. Despite this recovery, some analysts are cautious.
Benjamin Cowen, the founder of ITC Crypto, pointed out that the market might be on the verge of forming a “Death Cross,” a pattern where the 50-day Simple Moving Average (SMA) falls below the 200-day SMA. Historically, this pattern has preceded both rallies and declines in Bitcoin’s price, adding a layer of uncertainty to the current market situation.
Cowen suggests that for Bitcoin’s rally to be sustainable, it must break above its 50-day SMA at $62,000 and maintain this level as support. If it fails to do so, Bitcoin’s price could gradually decline until inflation rates ease.
However, not all experts view the Death Cross as a bearish signal. Timothy Peterson, a network economist, argues that the Death Cross has not always been followed by a significant drop, citing instances where Bitcoin rallied significantly after such patterns.
Currently, Bitcoin shows signs of recovery, having formed a bullish engulfing pattern on August 7, which pushed it above the $60,350 support level. However, technical indicators, including the potential formation of a Death Cross and a declining RSI, suggest a bearish outlook in the near term.
While Bitcoin is approaching the critical $62,000 resistance level, investor sentiment remains cautious, with the potential for a decline before any sustained rally.
