Bitcoin Need More Network Activity For Improved Investor Sentiment

We are still not seeing strong volume from Bitcoin trading, the price of bitcoin is holding above the $96,000 mark as traders adopt a cautious approach.

Funding rates remain subdued as the cryptocurrency market begins the year.

The bitcoin perpetual futures funding rate stands at 0.01%, per the most recent 8-hour contract cycle across most major exchanges, according to Coinglass data. This is the highest in over one week but still within a neutral range, according to Bitget Wallet COO Alvin Kan.

Over the past 24 hours, the cryptocurrency market saw over $130 million in short liquidations across major centralized exchanges, Coinglass data showed. Bitcoin accounted for $35 million of these liquidations, with $28 million coming from short positions. Ethereum followed with $15 million in total liquidations, $12 million of which were shorts. This trend, combined with declining trading volumes across exchanges, highlights a growing caution among traders, who appear hesitant to place significant bets against bitcoin in the current market environment.

As we can also see from the the transaction on the Bitcoin network, Bitcoin Transactions Per Day is at a current level of 312513.0 yesterday and down from 367319.0 one year ago. This is a change of -6.50% from yesterday and -20.45% from one year ago. Bitcoin Transactions Per Day reflects the daily number of transactions registered on the Bitcoin network.

A decrease in active addresses shows less overall activity on the Bitcoin network, implying that fewer transactions are taking place, which could reflect a lack of interest in using the network at this time.

Active addresses on the BTC network hit new lows in 2024. Less network activity often results in less volatility, which can lead to a period of price stability emanating from range trading or consolidation. Bitcoin has traded sideways for about 180 days, with prices ranging from $93,000 and $96,000.

But we could also see a drop in active addresses and price as a buying opportunity, however, this can vary.

If the market views the decrease as a sign of weakness or lack of relevance in the current macroeconomic environment, new supports might emerge, thus creating fresh entry points.

I think it is important to see how lack of interest could impact the price of Bitcoin, correlating with evidence of low trading volumes,

For me, holding onto my crypto stocks position because I believe that Bitcoin would make a comeback soon, as the investor sentiment would improve as we get closer to the new Trump administration taking office.

I believe this might be a good time to load up or DCA into your crypto stocks as Bitcoin price action has stagnated, and investor sentiment has been apathetic over the last six months.

We need to wait for the increase of interest to help push up the trading volume, then we could see Bitcoin making a new highs.

Appreciate if you could share your thoughts in the comment section whether you think Bitcoin is building up for a new highs.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.