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On-chain analytics firm Santiment has observed that the biggest cryptocurrency by market cap, Bitcoin (BTC), might be printing a key signal that pertains to its short-term price action.
The on-chain analytics platform reports that Bitcoin has just seen its highest level of single-day address activity in three and a half months.
This is as 1.07 million unique addresses that interacted with the Bitcoin network at the start of August, the most since April 17.
📊 #Bitcoin and #Ethereum remain firmly entrenched with the ebbs and flows of the #SP500. The dollar has risen these past couple weeks, which has historically foreshadowed market pullbacks. Look for reduced correlation as a breakout signal for #crypto. https://t.co/cMB4w8Abv3 pic.twitter.com/1NA8KfitzN
— Santiment (@santimentfeed) August 3, 2023
In a tweet, Santiment stated that Bitcoin's address activity surged to its highest level in 3.5 months in August. It goes on to say that this utility increase, along with big-loss transactions amid negative sentiment, could be a strong sign that a short-term (at the very least) BTC price bounce is more likely.
The on-chain analytics firm further noted in an image attached to the tweet that traders have been moving BTC at losses comparable to the most they have had all year, indicating capitulation. This might suggest a buy signal, Santiment noted.
Here's what to watch out for
At press time, Bitcoin remained unchanged, with the world's largest digital asset rising 0.10% to $29,132.
The crypto market has remained relatively flat in recent weeks as optimism over a new wave of Bitcoin exchange-traded fund (ETF) applications faded.
Tomiwabold OlajideSantiment noted that lead cryptocurrencies Bitcoin and Ethereum have remained firmly entrenched with the ebbs and flows of the S&P 500. The dollar has risen in the past couple of weeks, which has historically foreshadowed market pullbacks.
Santiment urges traders to look out for a reduced correlation between the two asset classes, stocks and crypto, as a breakout signal.
Other indicators hint at positivity for Bitcoin. Crypto analyst Ali observes a surge in buy-side demand for BTC as stablecoin inflows to crypto exchanges now surpass BTC inflows, indicating heightened buying interest.
Also, the number of Bitcoin on exchanges is now down 30% from its peak in early 2020.
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