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Tuesday, June 4, 2024
HomeCryptoBitcoin's real capitalization hits $600 billion as BTC active addresses plummet

Bitcoin’s real capitalization hits $600 billion as BTC active addresses plummet

Bitcoin’s real capitalization is the real capitalization of different components of its supply at different prices (instead of using the current daily close). Specifically, it is calculated by valuing each UTXO according to the last moved price.

Bitcoin’s real capitalization grew significantly, reaching nearly $600 billion, reflecting growing investor confidence following the 2024 halving. The metric provides tiered valuations, by taking into account price levels which each Bitcoin last traded, providing a more accurate measure of market capitalization which is often susceptible to price fluctuations of dormant coins.

Real capitalization | Source: Glassnode

Recent data highlights rising real profits, which peaked at $3.3 billion in early April, signaling investors to take significant profits. Despite these sell-offs, the overall market trend suggests an accumulation move in 2024, demonstrating strong underlying demand for Bitcoin. Such momentum underscores the market’s resilience amid short-term volatility.

Real capitalization also serves as an indicator of market sentiment, in that its growth is often in line with growing on-chain activity and investor optimism. This can be contrasted during bearish periods, such as the 18.9% drop during the 2022-2023 bear market, which marked the second-worst real capitalization drop in Bitcoin history.

bitcoin

Real capitalization | Source: Glassnode

As investors navigate the post-halving landscape, tracking real capitalization will provide important insights into Bitcoin’s capital flows and market valuation trends, thereby shaping future market strategies .

Active address Bitcoin plummeted to its lowest level in 5 years

Bitcoin active addresses are the number of unique addresses active in the network, either as senders or receivers. Only addresses that have been active in successful transactions are counted.

Bitcoin’s active addresses have recently seen significant fluctuations. After the halving in April 2024, the number of active addresses dropped to a three-year low, due to a spike in transaction fees and network congestion. Rising fees (partly due to new protocols like Runes) have impacted Bitcoin’s utility for everyday transactions, causing a significant drop in network activity.

bitcoin

Operating address | Source: Glassnode

Historically, active address has been a reliable indicator of market phases. For example, active addresses provide insights into user engagement and market sentiment during previous bear markets. 2022 data shows stagnation in active addresses consistent with typical bear market patterns observed in past cycles. The cyclical nature of Bitcoin market forces typically features periods of reduced activity, followed by new participation as market conditions improve. However, the current low in active addresses has not occurred since 2019, while Bitcoin price is back near its all-time high.

bitcoin

Active address | Source: Glassnode

You can see Bitcoin prices here.

Minh Anh

According to Bitcoin Magazine

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.
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