New York, USA – Bitcoin’s supply dynamics reveal a potential lack of interest from new investors, signaling a possible further decline in price. On-chain analyst Axel Adler suggests that the cryptocurrency has yet to reach peak demand, attributing this to the low influx of new investors compared to previous bullish periods.
While current data indicates a tepid interest from new market participants, Adler believes that a future uptick in demand may occur as new investors eventually enter the market. Analyzing the Ratio of Old and New Bitcoin Supply, it shows that Bitcoin has not yet reached levels indicative of high demand, hinting at the likelihood of a price surge in the medium to long term.
Bitcoin’s price currently stands at $63,719, having decreased by nearly 5% in the past week. Assessing user engagement and network growth can shed light on whether Bitcoin’s price will experience an upward trend. Metrics like new addresses, active addresses, and zero-balance addresses provide insights into user activity on the network.
The stagnation in new addresses aligns with Adler’s perspective, suggesting a potential drop in price. Recent developments indicate that long-term holders are selling their positions, as reflected in the Mean Coin Age metric, which tracks the average age of all coins based on their purchase price.
Additionally, technical indicators like the Relative Strength Index (RSI) on the 4-hour chart suggest a bearish momentum, potentially leading to a further price decline. However, if buying pressure increases, a price rebound could be possible. Despite the current low demand, market conditions may persist in the coming weeks, influencing Bitcoin’s price movements.
In summary, Bitcoin’s supply dynamics, user engagement metrics, and technical indicators point towards a cautious outlook for the cryptocurrency’s price trajectory. While uncertainties remain, market participants will continue to monitor key metrics and developments to navigate the evolving landscape of the cryptocurrency market.