Bitcoin (BTC) is experiencing a surge in user activity, a sign that mainstream adoption may finally be on the horizon. Data from blockchain analytics platform IntoTheBlock reveals that daily active addresses are nearing 1 million, a level not seen since 2019. This significant increase suggests a shift away from dominance by large investors (“whales”) and towards a broader base of retail participants.
Bitcoin's long-term activity trend has decisively shifted, with on-chain activity seeing significant growth.
— IntoTheBlock (@intotheblock) November 26, 2024
The number of daily active addresses is approaching 1 million, representing the first prolonged increase of this scale since 2021. pic.twitter.com/PheqxY52ej
Retail Investors Enter the Ring
Analysts believe this trend is a positive development for Bitcoin’s long-term health. Blockchain expert Anndy Lian explains that a higher number of active addresses signifies a more robust and decentralized network. This, in turn, benefits long-term investors by fostering stability and resilience.
Price Poised for a Breakout?
The rising user activity coincides with Bitcoin’s recent push towards the highly anticipated $100,000 mark. In fact, the price came within a mere $200 of this milestone on November 22nd. However, a recent correction saw a 6% drop, attributed by Bloomberg analyst Eric Balchunas to selling by long-term holders, rather than institutional outflows from US Bitcoin ETFs.
More Buyers Needed for Liftoff
While the surge in active addresses is a bullish indicator, it doesn’t necessarily translate to immediate price gains. Lian points out that trading volume remains relatively flat despite the increase in users. This suggests that new investors haven’t yet begun significant buying activities.
Investors should also be mindful of the possibility of a broader market correction, cautions Ryan Lee, chief analyst at Bitget Research. However, the potential for Bitcoin to reach its $100,000 target by the end of November remains optimistic for some analysts.
Supporting Factors for a Bitcoin Rally
Several factors bolster the bullish outlook:
- Over 458,000 investors hold Bitcoin acquired above $96,700, potentially providing upward momentum (IntoTheBlock, Nov. 25).
- Bitcoin’s price and network activity have exhibited significant growth since the US presidential election on November 5th (Isaac Joshua, CEO at Gems Blockchain Launchpad).
- This surge in on-chain activity follows a record week of inflows for Bitcoin ETFs ($2.4 billion) while China ETFs experienced their worst week ever of outflows ($2 billion) due to economic concerns.
While Bitcoin’s price may experience some short-term fluctuations, the increase in active users paints a promising picture for the future. This trend, coupled with supportive market conditions, increases the likelihood of Bitcoin reaching its $100,000 target sooner rather than later. However, investors should remain cautious and keep a close eye on broader market trends before making any investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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