Data shows the number of active Bitcoin entities has been steadily going up, but the growth pattern still remains in the bear market channel.
Number Of Active Bitcoin Entities Continues To Remain In Bear Market Channel
As per the latest weekly report from Glassnode, the number of active BTC entities has observed a persistent user growth recently.
The “number of active entities” is an indicator that tells us about the number of daily active users on the Bitcoin network.
An entity here refers to a collection of addresses held by a single investor, so the number of entities isn’t the same as the total number of addresses on the network.
When the value of this indicator rises, it means more holders are making trades right now. A sharp growth can suggest a large number of new investors are ushering into the Bitcoin market.
On the other hand, decreasing values of the metric implies interest around the crypto is diminishing as investors go dormant.
Related Reading | On-chain Data Suggests Bitcoin Miners Were Behind The Selloff
Now, here is a chart that shows the trend in the number of active Bitcoin entities over the past several years:
Looks like the metric has observed some growth recently | Source: Glassnode's The Week Onchain - Week 15, 2022
As you can see in the above graph, the number of active Bitcoin entities has been steadily going up in recent weeks.
However, the value of the metric is still within a range that the report refers to as the “bear market channel.” As the name suggests, the indicator is usually inside this range during bearish periods where a persistent user growth is observed, but nothing too explosive.
During the bull market hype, on the contrary, the number of active entities usually shows a very rapid rise. But near the peak, the indicator also crashes down sharply.
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Recently, the trend has been that of a sharp growth in the Bitcoin active entities, but as pointed out earlier, the current value is still at the upper end of the bear market channel
Nonetheless, the report notes that any expansion here would mean the indicator will finally escape this range, something that could prove to be constructive for the price of the coin.
BTC Price
At the time of writing, Bitcoin’s price floats around $40.4k, down 14% in the past week. Over the last month, the crypto has gained 3% in value.
The below chart shows the trend in the price of the coin over the past five days.
Bitcoin seems to have plunged down over the last couple of days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com
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