Bitcoin is witnessing the development of a troubling divergence, which poses several questions about the sustainability of the cryptocurrency’s growth. Here’s the most important one so far — how does it affect price?
The analyst’s report depended on the Bitcoin Active Addresses metric, which, as is apparent, tracks the number of unique wallet addresses participating in transactions on the network within a given period. The value of this metric reflects the amount of user activity or engagement of the crypto network.
From the chart shared by CryptoOnchain, there is “a clear negative divergence between Bitcoin’s price and the 14-day moving average of active addresses.” What this means is that the broader Bitcoin bull rally is happening against a backdrop of reduced network activity and user engagement.
Aside from the risk of correction, there is also the possibility of the Bitcoin network activity falling even further. When this happens, demand for BTC could further weaken, which could temporarily translate to increased selling pressure.
The crypto expert also explained that attempts by buyers to push Bitcoin’s price above $113,000 fell short, as Buy-Side Pressure on the world’s largest exchange by trading volume continued to lag within the negative territory.
