Data shows that Bitcoin active addresses have plunged, but the transaction count has been around an all-time high (ATH). Here’s why this may be so.

Bitcoin Active Addresses And Transaction Count Have Diverged Recently

According to the latest weekly report from Glassnode, the Bitcoin network has been showing a divergence in its activity-related metrics recently. The indicators in question are the Active Addresses and the Transaction Count.

First, the Active Addresses keeps track of the unique number of addresses participating in some transaction activity on the blockchain daily. This metric’s value is essentially analogous to the active user count for the network.

The chart below shows how the Active Addresses metric has changed in value for Bitcoin over the past decade.

As is visible in the graph, the 30-day moving average (MA) of the Bitcoin Active Addresses has been sharply going down over the last few months. This would imply that fewer users are now potentially participating in network transaction activity.

The market momentum has been strong in this period, however, and as is visible in the chart, previous such bullish periods saw the indicator rising instead. Thus, the trend has deviated for this cycle.

The other metric of interest here, the Transaction Count, measures the total number of transfers taking place on the network every day. Here is a chart that shows how this metric has performed recently:

Interestingly, while the Active Addresses have seen a decline in value, the Transaction Count has shot up instead. The metric’s 30-day MA value is around 612,000 per day, near the ATH.

The fact that the two indicators have gone opposite ways would mean that, although fewer addresses are active now, the number of transfers each address has individually been making has blown up.

Now, what’s behind this trend? The analytics firm has identified a curious correlation between the Active Addresses pattern and the Transaction Count share of the Bitcoin Inscriptions.

The Inscriptions, which provide a way to inscribe data onto Satoshis (Sats), the smallest unit of BTC, had enjoyed popularity since early 2023 until recently.

The chart shows that the Transaction Count share of the Inscriptions collapsed starting mid-April, matching the decline in the Active Addresses.

As for what’s behind the downfall of the once incredibly popular Inscriptions, data would point towards the emergence of the Runes on the network. In short, the Runes protocol allows users to introduce fungible tokens on the network through a different mechanism from the Inscriptions.

The Runes launched alongside the fourth Halving, which is around when the Inscriptions fell off.

The Runes protocol uses address reuse, which means the same address becomes involved in multiple transactions. Thus, it’s easy to see why the protocol’s launch has accelerated the divergence between the Active Addresses and Transaction Count.

BTC Price

At the time of writing, Bitcoin is trading at around $69,600, down more than 2% over the past week.

Ethereum price failed to clear the $3,650 resistance. ETH declined again after the Fed decision and now shows bearish signs below the $3,550 level.

• Ethereum started a fresh decline below the $3,580 support zone.
• The price is trading below $3,550 and the 100-hourly Simple Moving Average.
• There is a major bearish trend line forming with resistance near $3,610 on the hourly chart of ETH/USD (data feed via Kraken).
• The pair could extend losses if it stays below the $3,600 resistance zone.

Ethereum Price Dips Again

Ethereum price attempted a recovery wave above the $3,550 and $3,580 resistance levels. However, ETH failed to settle above the $3,650 level and started another decline. There was a steady decline below the $3,580 level, like Bitcoin.

The price declined below the $3,550 support level. There was a move below the 61.8% Fib retracement level of the upward move from the $3,431 swing low to the $3,655 high.

Ethereum is now trading below $3,550 and the 100-hourly Simple Moving Average. There is also a major bearish trend line forming with resistance near $3,610 on the hourly chart of ETH/USD. If there is a fresh increase, the price might face resistance near the $3,580 level.

The first major resistance is near the $3,600 level and the trend line. An upside break above the $3,600 resistance might send the price higher. The next key resistance sits at $3,650, above which the price might gain traction and rise toward the $3,720 level.

A clear move above the $3,720 level might call for a test of the $3,800 resistance. Any more gains could send Ether toward the $3,880 resistance zone.

More Downsides In ETH?

If Ethereum fails to clear the $3,600 resistance, it could continue to move down. Initial support on the downside is near $3,480 and the 76.4% Fib retracement level of the upward move from the $3,431 swing low to the $3,655 high. The next major support is near the $3,420 zone.

A clear move below the $3,420 support might push the price toward $3,320. Any more losses might send the price toward the $3,250 level in the near term.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is gaining momentum in the bearish zone.

Hourly RSI – The RSI for ETH/USD is now below the 50 zone.

Major Support Level – $3,420

Major Resistance Level – $3,600