New Addresses on Bitcoin Network Hits Three-Month High
Bitcoin (BTC) metrics signal mixed sentiments amid the recent spike to $31,000. Notably, while the number of new addresses on the Bitcoin network recently surged to a three-month high, a drop in fees to a four-month low might suggest decreasing network activity.
On-chain data provider Glassnode revealed these metrics in two separate disclosures. According to the blockchain data resource, the number of new addresses on the Bitcoin network recently skyrocketed to 20,360. The last time the network observed such many newly-added addresses over the seven-day moving average was in April. This metric indicates a significant increase in user activity and interest in the world’s leading cryptocurrency.
Significance of the Surge in New Addresses
The number of new addresses serves as a crucial indicator of the growth and adoption of Bitcoin. The recent surge in new addresses suggests a renewed interest in the asset, potentially fueled by market developments or investor sentiment.
BTC recently soared past the $31,000 mark after three days of trading below it. The asset had spiked to a one-year high of $31,500 on July 6, triggering bullish projections. However, this rally was short-lived, as BTC eventually closed the day below $30,000. The recapture of the $31,000 mark possibly triggered a resurgence of these bullish sentiments, driving the increase in new addresses as market participants look to ride on the projected rally.
Bitcoin Transaction Fees Experience a Downtrend
However, another metric provided by Glassnode reveals a contrasting trend. The total fees paid for BTC transactions, measured over a seven-day moving average, have reached a four-month low of $22,905.
This metric suggests that the cost of conducting transactions on the Bitcoin network has decreased significantly. A fee decline could indicate reduced trading activity or a lull in general Bitcoin usage. It could show decreased interest or transactional demand for BTC at that particular time.
Interestingly, the Glassnode chart shows an opposite correlation between network fees and Bitcoin’s price in recent times. Fees skyrocketed to a two-year high in May when BTC faced a steep decline from the high of $29,820 observed on May 6.
Network Fees and Bitcoin Price: The Connection
BTC eventually dropped to $25,811 following the two-year high in fees. The surge in network fees could be attributed to increased selling pressure as market participants seek to distribute their tokens amid the mid-May decline in Bitcoin’s price.
Meanwhile, BTC is trading for $30,405, up 0.71% over the last 24 hours. This drop in network fees has coincided with increasing bullish sentiments as the bulls look to seal a position above the $31,000 threshold.
