- BTC is up 5.91% over the past month.
- Analysts believe that 350,000 new addresses are critical for Bitcoin to see a sustained uptrend.
Since hitting a local low of $58,000, Bitcoin [BTC] has experienced a surge on the monthly charts, reaching a local high of $69,000.
However, despite this upward momentum, Bitcoin’s daily active addresses have fallen sharply. As such, active addresses have dropped from a high of 1.1 million to 980k. This drop in the number of active addresses has got analysts talking.
Source: Cryptoquant
To that extent, Cryptoquant analyst Burak Kesmeci has suggested that 350,000 new addresses are the most crucial for BTC to maintain an uptrend.
Why 350k addresses are critical
The analyst stated that new addresses are essential for Bitcoin bulls to gain market power.
Source:
According to him, the market is only healthy if the number of new Bitcoin addresses increases.
Therefore, the 350k level is a pivot that separates the bulls and bears. When the number of new addresses drops below 350,000, the market faces a strong downward move as bears take over, thus beginning a bear season.
Subsequently, when the addresses remain above this level, it means that the bulls are gaining strength and the uptrend is holding.
Historically, Bitcoin addresses have played a crucial role in seeing both bull and bear seasons. For example, over the past six years, Bitcoin addresses have fallen below 250,000 three times, while BTC has fallen.
In 2018 it fell from $19,000 to $6,000, in 2021 it fell from $64,000 to $30,000, and in 2024 from $73,000 to $49,000.
Therefore, when the number of new addresses reaches 350,000, the market will be healthy enough for investors. Although there has been an increase in the number of new addresses in 2024, the number of addresses has not exceeded 350,000. As such, they fell to 210,000 in June 2024 and rose to 349,000 on October 14, 2024. However, they have fallen again to 249,000.
By this analogy, the BTC market is not strong enough for a sustained rally.
What it means for BTC charts
Although Bitcoin still has 350,000 new addresses to convert, the crypto is currently experiencing a strong upward trend. As such, prevailing market sentiment is in favor of BTC for greater gains on price charts.
Source: Cryptoquant
For example, the currency supply ratio has seen a sharp decline over the past week. This suggests that holders are accumulating and storing their Bitcoin outside of exchanges, indicating that they have no immediate plans to sell.
Source: Cryptoquant
Furthermore, Bitcoin’s fund flow ratio has risen from a low of 0.06 to 0.15 over the past week. This indicates that more investors are purchasing BTC, indicating increased demand and bullish market sentiment.
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In fact, at the time of writing this, BTC was trading at $67714. This represented an increase of 5.91% on the monthly charts.
Therefore, if prevailing market sentiment holds, BBC will look to withstand a resistance at $69,400 where it has faced multiple rejections.