Data show that the number of active Bitcoin entities has been steadily rising, but the growth pattern still remains in the bear market channel.
Number of active Bitcoin entities remains in Bear Market Channel
As per the latest weekly report from Glassnode, the number of active BTC entities has recently observed a sustained user growth.
The “number of active entities” is an indicator that tells us about the number of daily active users on the Bitcoin network.
An entity refers here to a collection of addresses held by a single investor, so the number of entities is not the same as the total number of addresses on the network.
As the value of this indicator rises, it means more holders are currently trading. A sharp growth may suggest that a large number of new investors are entering the Bitcoin market.
On the other hand, decreasing values of the metric implies that interest in the crypto decreases as investors sleep.
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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 chart above, the number of active Bitcoin entities has been steadily rising over the last few 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 already suggests, the indicator is normally within this range in bearish periods where a sustained user growth is observed, but nothing too explosive.
During the hype of the bull market, just the opposite, the number of active entities usually shows a very rapid rise. But near the peak, the indicator also drops sharply.
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Recently, the trend has been that of a sharp growth in the Bitcoin active entities, but as indicated earlier, the present value is still at the top of the bear market channel
However, the report notes that any expansion here means that the indicator will eventually escape this range, something that could be constructive for the price of the currency.
The price of BTC
At the time of writing, the price of Bitcoin is hovering around $ 40.4k, 14% down over the past week. In the last month, the crypto has gained 3% in value.
The chart below shows the trend in the price of the currency 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