As the Bitcoin price struggles to stay afloat in Q3 2024, activity has also fallen, reaching lows not seen in years. With the latest crash last week, activity on the Bitcoin network took another negative hit, causing it to plummet to levels not seen in three years. Naturally, this implications for BTC price and the PrimeXBT Market Research report showed what could happen to the BTC price after such a development.
Bitcoin activity falls to 2021 levels.
After Bitcoin’s price fell below $60,000, the total number of busy addresses on the network fell below 1 million. This development is worrying considering how long it took the network to reach this milestone. However, the decline was far from over, and as the price fell towards $50,000, the total number of busy addresses fell to 800,000.
According to a report by PrimeXBT Market Research, the last time Bitcoin activity was this low was in 2021, when the price was still hovering around $45,000. This of course has a number of connotations for the price, which can be both good and bad.
First, the drop in the number of busy addresses suggests that investors are not actively engaging with the blockchain. This is reflected in fewer transactions being made. But on the other hand, it also means that the network will be less congested, which will lead to lower fees and faster transaction confirmation times.
As interest drops, Bitcoin price may also be affected. The report indicates that this is a period where it may be less price volatilityAs a result, prices tend to be more stable and less prone to wild swings. “This is what we saw with Bitcoin over the past 180 days, with Bitcoin trading in a range of 71,000–50,000,” the report states.
Additionally, a drop in the number of busy 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 price of Bitcoin would continue to fall as investors would decide to sell rather than buy in this situation.
However, this sentiment is not shared by the entire market, as it can also be bullish on price. The ancient investment adage that says, “Buy when there is blood in the streets,” suggests that such times are the best time to buy. So for some, this decline, combined with bitcoin price slowdownmay prove to be a great opportunity for investors to enter the market at what may be considered a discount price.
Featured image created with Dall.E, chart from Tradingview.com
