Bitcoin Has Fewer Daily Active Addresses Than on April 1By Andy Hao
The unofficial start to the 2019 crypto bull run was on April 2, 2019. On this day, Bitcoin prices jumped from roughly $4,000 and settled around $5,000 by the time the day was over. Since then, prices have more than doubled, but some of Bitcoin’s on-chain metrics suggest this rally may be fueled by little more than speculation.
On April 1, when Bitcoin was still trading around $4,000, there were 698,000 daily active addresses on the network, according to Coin Metrics. Partway through June, near the recent price peak of $13,800 per coin, there were as many as 1.04 million daily active addresses, roughly corresponding to the increase in price.
But on Sunday the Bitcoin network saw fewer than 655,000 daily active addresses on the network. While activity tends to be marginally lower on weekends, there seems to be a trend forming towards lower Bitcoin network usage.
While it’s tough to say exactly what caused this or how it might affect future prices, it’s worth taking note of the pullback in network activity. Although speculation, fear, and greed can drive prices in the short-term, the medium to long term price action for Bitcoin has always been somewhat tied to its underlying on-chain activity. 2017 was a great example of this, where prices tracked the rise and fall in network activity very closely throughout the entire market cycle.
Other coins are seeing similar drops in network activity too, with both Litecoin and Bitcoin Cash seeing fewer daily active addresses today than on April 1. Ethereum is the only major coin to have bucked this trend, with a slight rise in daily active addresses over the last 3 months.
When looking at other on-chain metrics, the trend of the overall crypto landscape looks less clear. There are mixed signals across a handful of the most common on-chain metrics.