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Weak address growth points to Bitcoin price failing to sustain $25K

Bitcoin (BTC) is staging a repeat of price action from May with its latest drop, the latest data shows.

As the dust settles on a 6% comedown for BTC/USD, analysis argues that its trip to $25,000 was never meant to last.

Realized price comes back to haunt the BTC chart

After taking some by surprise with its magnitude, the latest snap losses for BTC price action are still playing out.

After falling from $23,800 to as low as $21,400 in a single hour, the largest cryptocurrency is now attempting to establish support near its realized price.

At just below $22,000, realized price refers to the sum total at which the entire BTC supply last moved.

The setup will be more than familiar to many market participants, as realized price formed an initial support line during Bitcoin’s descent in May, immediately following the Terra (LUNA) — now renamed Terra Classic (LUNC) — blowout.

Bitcoin realized price chart. Source: Glassnode

With history rhyming — at least on the chart — it remains to be seen whether other recent points of interest will continue to play their role.

Among them is the 200-week moving average (MA), a hard-won support level in July now seemingly lost in one fell swoop.

The 50-day MA, cleared in late July, is now also back above spot price at $22,260.

Going into the Wall Street open, United States equities futures showed that more downside was to come, implying more pressure on crypto markets.

Active addresses fail to support breakout

A look at network activity growth during the August run to over $25,000, meanwhile, produced bearish conclusions for analyst Philip Swift.

Related: Bitcoin ‘liveliness’ lowest since 2021 amid new 5-year BTC hodl record

In a fresh tweet on the day, the creator of analytics resource Look Into Bitcoin noted that address growth had not matched similar price appreciation phases this time around.

“AASI (Active Address Sentiment Indicator) has been indicating that the current price move has not been supported by a sufficient increase in active addresses on the Bitcoin network,” he summarized.

“Experienced local highs when this has happened previously.”

Bitcoin AASI (Active Address Sentiment Indicator) annotated chart. Source: Philip Swift/ Twitter

This comes despite the total number of Bitcoin addresses ever created passing 1 billion this week, according to data from on-chain analytics firm Glassnode.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Thiru Venkatam: Thiru Venkatam is a distinguished digital entrepreneur and online publishing expert with over a decade of experience in creating and managing successful websites. He holds a Bachelor's degree in English, Business Administration, Journalism from Annamalai University and is a certified member of Digital Publishers Association. The founder and owner of multiple reputable platforms - leverages his extensive expertise to deliver authoritative and trustworthy content across diverse industries such as technology, health, home décor, and veterinary news. His commitment to the principles of Expertise, Authoritativeness, and Trustworthiness (E-A-T) ensures that each website provides accurate, reliable, and high-quality information tailored to a global audience.
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