Crypto analytics firm Santiment says that a recent spike in the number of daily active Bitcoin (BTC) addresses indicates BTC’s price might be about to swing to the upside.
The market insights agency tells its 120,700 Twitter followers that Bitcoin activity has picked up after nearly a month of sluggish data.
“With Bitcoin continuing its $46k to $48k range, we’re seeing a trend of rising address activity.
Dec. 28th marked the highest address activity in 4 weeks, and these high spikes in DAA [daily active addresses]/price ratio historically correlate with price rises.”
Santiment offers a more in-depth analysis of Bitcoin’s relative strengths and weaknesses in its latest Insights blog post.
As BTC struggles to recapture and hold the $50,000 level, the firm says of retail sentiment,
“It’s as good as it can look.
Seems like many people are quite disenchanted and in disbelief about breaking above 50k.”
The crypto insights firm says that while funding rates are mostly neutral, many people are selling their BTC due to fears that it won’t go up during 2022.
“People selling now because they believe it can dump lower.
It’s a sign of bearishness.
There are enough people that believe BTC will not go higher the whole next year.
They sell now because they don’t feel confident holding BTC.”
Santiment is also concerned by the downtrend in whale activity.
“Pretty significant chunks of money are being offloaded by these addresses.
It’s hard to be bullish when whales are acting like this.”
The data firm concludes its Bitcoin analysis by noting that BTC’s daily circulation has been declining over the past month and a half.
“Every week since November we are seeing a lower high in terms of daily circulation. Amount of Bitcoin being used over the network is clearly declining.”
At time of writing, Bitcoin is up 1% on the day to $47,025.
The flagship cryptocurrency last breached the $50,000 mark back on December 11th.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/jamesteohart/PurpleRender