Bitcoin’s stellar performance as it kicked off the new year has been the topic of discussion among the crypto community. The price gain of over 50% in 2023 was a much-needed boost after a gloomy bear market of the last year.
The dominant crypto has also been praised for showing resilience amidst the negative regulatory developments concerning the SEC’s crackdown on Kraken and Paxo.
Additionally, the Bitcoin network received a further boost after Ordinals burst into the scene in a magnitude never seen before.
Optimistic BTC supporters have already begun to speculate about the likelihood that all of these could contribute to the crypto’s upcoming bull runs.
However, a report by an on-chain analytics platform paints a different picture. In a blunt assessment of the 2023 BTC price rebound, CryptoQuant cautioned that Bitcoin may be weaker than it appears.
The analysis identifies two crucial metrics that are still missing in BTC’s case: on-chain volume and active address increases, which, as per the report, are traits of bull markets.
The unique addresses count takes into consideration both senders and receivers. In other words, even if a given address has performed several transactions throughout the day, it will only be listed once.
A surge in the above indicator usually indicates an uptick in network activity. Such a pattern also suggests that traders and market participants are becoming more interested in the blockchain.
Low numbers, on the other hand, can imply that there aren’t many traders interested in the cryptocurrency as a whole because there aren’t many active users on the network.
Bitcoin’s Active Addresses Not Mirroring Bull Market Paradigm
The sentiment was also shared by other experts as well. They too continue to have a fair degree of skepticism even when on-chain measurements turn green and some even flash bull signals that haven’t been seen in years.
Yonsei dent, a contributor to CryptoQuant, wrote in one of the platform’s Quicktake blog entries that 2023 does not align with prior bull markets.
The issue, according to the analyst, is that despite the fact that BTC/USD has increased by approximately 50% year to date, the number of active addresses is not growing.
“Active Addresses is a metric that includes all addresses sending and receiving BTC, providing a look at how active market demand is,” the blog post reads.