Key Points
- Bitcoin’s active addresses recently reached a six-month high, indicating strong market interest.
- Despite this, Bitcoin’s price fell and the surge in active addresses could be due to speculative positioning.
Bitcoin’s active addresses have reached a six-month peak, suggesting a strong interest in the cryptocurrency market.
Despite this, Bitcoin is currently struggling to maintain its breakout above $97,000.
Speculative Positioning vs Genuine Demand
While a $100k target may seem ambitious given Bitcoin’s recent 4% dip from its $97k high, the cryptocurrency recorded its highest network activity in six months. This was when Bitcoin was valued at $96,951, with 925,914 active addresses in a single day.
However, instead of soaring as one might expect, Bitcoin’s price fell nearly 2% the following day. This reflects a bearish divergence between on-chain activity and price movement.
A closer look reveals that on the day the active address count surged, approximately 5,000 BTC (worth around $484 million) flowed into derivative exchanges. This suggests that the surge in active addresses may be due to speculative positioning rather than genuine spot BTC demand. It could be that the market is seeing leverage-driven selling, which may have caused the price dip.
Declining Active Addresses and Bullish Fatigue
The last time Bitcoin experienced genuine spot demand was on the 29th of April. Since then, even though the price has reclaimed key resistance levels, net flows have remained largely flat. This could indicate a step back by retail investors, possibly signaling bullish fatigue.
Adding to this, Bitcoin’s active addresses sharply declined from a six-month peak on the 2nd of May to a two-week low of 618k the day after. This drop reflects a clear hesitation among traders to engage in spot buying near the $97k level. It suggests a decrease in participation and reluctance to accumulate Bitcoin at high valuations.
In light of these factors, the $100k target for Bitcoin appears increasingly speculative.
