Bitcoin Network Activity Slumps: Could BTC Price Plunge Below $100,000?

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For several weeks now, Bitcoin (BTC) has struggled to maintain a price level above the $100,000 milestone, which it hasn’t achieved since the start of this year.

Based on the analysis of a cryptocurrency expert, this prolonged period without price increase might be due to a substantial decrease in Bitcoin’s network usage.

Bitcoin Sees Decline in Network Activity

According to a recent analysis by an anonymous expert known as Yonsei_Dent on CryptoQuant, reduced activity on the Bitcoin network has been contributing to its price stabilization over the past few weeks.

In simpler terms, Dent analyzed the number of active Bitcoin addresses and observed that a “death cross” has taken place. This means that the 30-day moving average for Bitcoin’s price has dropped below its 365-day moving average, indicating a potential decrease in market activity.

It appears this pattern indicates a decline in short-term investor activity since the daily moving average (30 days) drops beneath the weekly moving average (365 days). This could mean less trading and involvement on the network for the immediate future.

Historically, patterns similar to those seen in Active Addresses tend to align with downturns in the market, which could suggest a potential warning sign or bearish trend.

Just as anticipated, a decrease in active Bitcoin network addresses has led to a corresponding drop in daily transactions on the Layer-1 blockchain. According to Dent’s report, this downtrend in transaction count has been persistent since the last quarter of 2024, suggesting a possible prolonged period of market stability or stagnation ahead.

BTC Price Prediction: Bullish Setup Could Trigger Price Surge Above $102,000

Starting from December 19th, Bitcoin has encountered a resistance level at approximately $102,722 and found support at around $91,431. Based on its Moving Average Convergence Divergence (MACD), there’s a possibility of it breaking through the current resistance soon. At the present moment, the MACD line (which is blue) is positioned above the signal line (orange).

This tool assesses the patterns and speed of changes in an asset’s price, as well as its overall momentum, to provide buy or sell recommendations. When configured like this, it indicates that bullish momentum is becoming stronger. This implies that there is growing interest in buying BTC, suggesting a possible price increase.

If Bitcoin (BTC) manages to surge past the resistance point at $102,722, it could potentially drive the price upwards and close in on its record high of approximately $108,230.

If we can’t break through this resistance, it might head back towards the $91,431 support level. If the bulls aren’t able to hold this point, Bitcoin’s price may fall to $86,531.

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2025-01-16 22:40