The market intelligence platform IntoTheBlock has discussed the bearish situation Bitcoin has been facing that has got many puzzled.
Bitcoin Adoption Has Slowed Down To Multi-Year Lows Recently
Bitcoin had a great first quarter in 2024, fueled by demand from the spot exchange-traded funds (ETFs) and institutional entities. During this run, the asset surpassed the all-time high (ATH) set back in the previous bull run, breaking a pattern in other cycles where ATHs were only reached after the Halving.
With the huge demand, things looked to be just getting started for the asset, but in the months since the ATH, the cryptocurrency has only been consolidating sideways.
In a new post on X, IntoTheBlock talks about the current situation with Bitcoin, which many have been wondering about. The analytics firm has pointed out that the transfer activity on the BTC network has been high recently, as the Number of Transactions metric has set a new record.
The most recent spike in the Number of Transactions on the Bitcoin blockchain has resulted from the emergence of the new Runes protocol, which allows users to mint fungible tokens on the network efficiently.
“Institutional whales are present, and activity on the Bitcoin network is high,” says the analytics firm. “So, where’s the confusion?” The answer to that question lies in the trend of the New Addresses indicator.
As its name suggests, this metric keeps track of the total number of new addresses that are popping up on the network daily. This indicator tells us about the rate of adoption the cryptocurrency is observing.
Below is a chart showing how this Bitcoin metric’s value has changed over the past decade.
The graph shows that the Bitcoin New Addresses has declined while the price has risen to its new high. As IntoTheBlock notes:
The data reveals that this surge in usage and whale activity does not involve a significant influx of new participants. In fact, the number of new Bitcoin users has plummeted to a multi-year low, even falling below the levels seen during the 2018 bear market.
Historically, bull markets have accompanied sharp asset adoption as new investors get attracted by all the hype. In return, this influx of holders has helped fuel the rally.
It would appear that despite the asset reaching a new ATH, the network has failed to attract new users. This is what has got many puzzled. The slowdown could, at least in part, be why Bitcoin has failed to continue its bullish momentum. It now remains to be seen whether this will change for the coin soon or not.
BTC Price
At the time of writing, Bitcoin is trading at around $65,000, down 7% in the past week.
