Bitcoin Active Address Momentum Slows, Mirroring Post-Peak Declines of 2018 and 2021

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    <h2>Onchain Metrics Overview</h2>
    <p><strong>Definition:</strong> <em>This metric analyzes the monthly average 🔴 of new addresses in comparison to the yearly average 🔵 to highlight shifts in user sentiment and to identify potential turning points in network behavior.</em></p>

    <h3>Understanding Onchain Activity Trends</h3>
    <ul>
      <li><em>Monthly 🔴 &gt; Yearly 🔵</em>: Indicates growth in on-chain activity, reflecting stronger network fundamentals and increased utilization.</li>
      <li><em>Monthly 🔴 &lt; Yearly 🔵</em>: Signifies a decline in on-chain activity, suggesting weakening network fundamentals and reduced usage.</li>
    </ul>

    <h3>Current State of Bitcoin Activity</h3>
    <p>As we progress through 2024, Bitcoin’s active address count has shown a persistent downward trend, especially following the April halving. The 30-day simple moving average (SMA) of active addresses has dipped below the 365-day SMA, indicating a slump in network activity.</p>

    <h3>Historical Context</h3>
    <p>This pattern is reminiscent of previous market trends seen in 2018 and 2021, when Bitcoin’s price peaked, only to see active addresses decline shortly thereafter, correlating with a broader market cooldown.</p>

    <figure id="bitcoin-active-address-graph-1" aria-describedby="caption-graph-1" style="width: 1800px" class="wp-caption aligncenter">
      <img fetchpriority="high" decoding="async" class="wp-image-442502 size-full" src="https://cryptoslate.com/wp-content/uploads/2024/09/btc-27.png" alt="Bitcoin: Active Address Trends" width="1800" height="1013" />
      <figcaption id="caption-graph-1" class="wp-caption-text">Bitcoin: Active Address Momentum (Source: Glassnode)</figcaption>
    </figure>

    <h3>Declining User Engagement</h3>
    <p>Recent data from Glassnode indicates that the monthly average of active addresses in 2024 continues to lag behind the yearly average. This trend mirrors the downturn witnessed in mid-2018 following Bitcoin’s price correction post-2017 bull run.</p>

    <h3>Future Implications</h3>
    <p>Despite occasional short-lived price surges, the overall network activity has not seen a comparable rebound as observed in previous cycles. The decline in active addresses, along with the current post-halving period, raises concerns over diminished demand for blockspace within the Bitcoin network, suggesting a potential cooling of its user base.</p>

    <figure id="bitcoin-active-address-graph-2" aria-describedby="caption-graph-2" style="width: 1800px" class="wp-caption aligncenter">
      <img decoding="async" class="wp-image-442501 size-full" src="https://cryptoslate.com/wp-content/uploads/2024/09/btc-26.png" alt="Bitcoin: Active Address Trends" width="1800" height="1013" />
      <figcaption id="caption-graph-2" class="wp-caption-text">Bitcoin: Active Address Momentum (Source: Glassnode)</figcaption>
    </figure>
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