Key Points
- The Bitcoin network has seen a significant drop in activity, potentially exerting downward pressure on the cryptocurrency’s price.
- Increasing Bitcoin exchange reserves could further challenge Bitcoin’s ability to sustain its current value.
The Bitcoin network has been experiencing a significant decrease in activity, which could add more downward pressure on the Bitcoin price. In the past few days, Bitcoin has been trading within a narrow range of $93,000 to $94,000, reflecting a lack of decisive market movement.
Stagnation and Uncertainty
While this stagnation might suggest market resilience, it also indicates uncertainty about Bitcoin’s next directional move. In the last 24 hours, Bitcoin’s price saw a minor decline of 0.75%, but trading volume surged by 68.66% to $29.41 billion, suggesting that selling pressure might intensify soon.
The number of active addresses on the Bitcoin network has been steadily decreasing, with the current number dropping to 667,100 — the lowest since November 2024. This decline suggests reduced interaction with the Bitcoin network, potentially indicating lower transaction activity and waning interest.
Potential Impact on Bitcoin’s Price
However, the decrease in active addresses also suggests that the remaining active addresses might control a significant portion of the Bitcoin supply. If these addresses increase their buying activity for Bitcoin, it could potentially trigger a price rally.
However, if Bitcoin does trend higher, it could face a key supply zone, according to data from IntoTheBlock. The data shows that between $95,900 and $98,600, Bitcoin could face selling pressure from approximately 1.46 million addresses holding potential sell orders for a total of 1.29 million Bitcoin.
If Bitcoin manages to cross this supply zone, it could reclaim the $100,000 region. But failure to break through could result in Bitcoin dropping below the $90,000 mark, signaling further downside risk.
Rising BTC Exchange Reserves
According to CryptoQuant, Bitcoin exchange reserves have been gradually increasing, indicating a rise in the amount of Bitcoin available on exchanges and leading to higher supply. Since January 8th, Bitcoin reserves on exchanges have grown from approximately 2,354,000 to 2,360,000. Typically, an increase in exchange reserves is a warning sign that the asset could face additional downward pressure from its current price level. If exchange reserves continue to rise, it could hinder Bitcoin’s ability to rally from its current levels.
