Investors who buy and sell driven by emotions are not as present.
Historically, activity troughs have been good times to accumulate BTC for the long term.
The impulse or momentum of active Bitcoin addresses has fallen to levels not recorded since the beginning of 2018. According to network data analyzed by the CryptoQuant specialist who identifies himself as “Gaah”, this metric reflects a collapse in the transactional activity of the digital currency.
Such drop in Bitcoin network activity is mainly due to the absence of small investors. He analyst explains that “when we see this collapse in activity, we confirm that the ‘tourists’ – investors who buy out of enthusiasm and sell in panic – the famous STH, are no longer so present.” STHs are short-term holders that often operate on emotional impulses.
The departure of These actors have left the network in the hands of entities with greater capital. Gaah maintains that “a market characterized by low volatility and low speculative activity is an ideal environment for Smart money and institutions to accumulate large positions.” This allows institutional purchases to occur “without causing erratic spikes in the nominal price” of the asset.
To understand this indicator, a graph is used where the green area represents a network congested by excess transactions. This typically happens during speculative bubbles fueled by FOMO, or the “fear of being left out.” On the contrary, The indicator has now fallen into the red zone, signaling massive disinterest from speculatorsas seen below.
It is also important to keep in mind that the low use of the Bitcoin network may be due to the fact that there are more and more investors operating through custody services, exchanges and exchange-traded funds (ETFs). For this reason, as the years go by, the Bitcoin network appears emptier of movements.
History shows that it would be a good time to accumulate bitcoin
The historical context suggests that This scenario is favorable for investors with patience. The analyst emphasizes that “historically, the lows in the active addresses indicator have coincided with the most profitable long-term accumulation bases.” What is currently perceived as “silence” on the internet is, in reality, a sign of supply absorption.
This suggests that bitcoin (BTC) price not inflated by retail speculationbut is supported by a structural accumulation. The speculative noise has disappeared, leaving the network in the hands of those who possess a strong technical and fundamental conviction about the asset.
This scenario of technical calm occurs while the price of bitcoin rises today, April 8, towards $71,940 after the announcement of a two-week ceasefire between the United States and Iran, as reported by CriptoNoticias.
However, this upward movement should be taken with caution. Being a temporary ceasefire and not a definitive peace agreement, the upward momentum does not guarantee a new trend, but is framed in a context of high geopolitical sensitivity. For analyst Scott Melker, for example, it would not be strange if bitcoin remained sideways or with some falls for 100 more days.