Bitcoin, the world’s most valuable cryptocurrency, has been relatively subdued in recent weeks, with prices hovering at around $27,300 USD, a two-month low. While there hasn’t been any significant market activity, the number of Bitcoin addresses containing at least one Bitcoin has crossed the one million mark. However, this doesn’t necessarily translate into one million individual users as some addresses may belong to exchanges or multiple addresses may belong to one person.
On the other hand, there has been a notable decline in active addresses on the Bitcoin network. The 7-day exponential moving average (EMA) of active addresses on the network has fallen to around 600,000, which is the biggest decline in activity over the last year. The cause of the decline is not immediately clear, although it could be attributed to the continued regulatory crackdown in the United States, which is making it difficult to operate in the market.
Two prominent market makers, Jane Street and Jump Crypto, have also scaled back their market making activities. This is a blow to the already thin liquidity in the market, which has played a significant role in the run-up of Bitcoin’s price this year. With thin liquidity comes high volatility, and while volatility has fallen since March, it remains high and could continue to go up given the current market conditions.
While Bitcoin’s current price drop may not be significant by its standards, the shallow nature of the markets suggests that more volatility may be on the way. The industry is feeling the pinch of the hostile regulatory stance taken by the US, which makes it harder to operate in the market. Nevertheless, Coinbase CEO Brian Armstrong has suggested that the company may consider the UAE as an international hub to avoid such regulatory issues.
In conclusion, while Bitcoin has been relatively subdued in recent weeks, the decline in active addresses, the scaling back of market makers’ activities, and the market’s thin liquidity hint at more volatility in the near future. Nevertheless, the fact that over a million addresses on the Bitcoin network now have at least one Bitcoin is an encouraging sign for the cryptocurrency and suggests that people are still actively interested in investing in it.