Bitcoin is under pressure and struggling to peel back losses from early this week. Even with prices stabilizing within the last day, the trail of least resistance is southwards for now. For the trend to shift, there have to be a convincing close above the local resistance at around $66,000.

Bitcoin Energetic Addresses “Anemic”

Data points to a worrying drop in on-chain activity as prices cool off and consolidate inside a bear breakout formation. Taking to X, one analyst observes that over the past few months, the variety of Bitcoin energetic addresses has been falling. The one time this metric rose was from late 2023 through to early 2024.

Coinciding with this expansion and looking out at price data, Bitcoin prices had risen from below $30,000 to as high as $73,800. Afterward, and referring to on-chain development, the variety of energetic addresses has been sloping negatively.

Often, a slowdown in network activity, as is the case in the intervening time, could have massive implications on price motion. As historical price movement shows, the variety of Bitcoin energetic addresses rises in tandem each time prices are uptick. Prices are under pressure, and transfers from unique addresses have been falling, signaling decreasing interest from the masses.

Spot Bitcoin ETFs To Blame?

The analyst has picked out a possible explanation for this contraction. Taking a look at the Bitcoin energetic addresses trend, it is straightforward to notice that activity fell in momentum when america Securities and Exchange Commission (SEC) approved the primary batch of spot Bitcoin ETFs.

While the product allowed institutions to get exposure to the world’s most respected coin, there was a marked shift in ownership dynamics.

Unlike in previous cycles, where prices were driven to fresh highs mostly as a consequence of retail activity and sentiment, prices were now within the hands of the “big boys” who could move thousands and thousands in a single swoop, moving prices.

Before, it could take many “small” addresses to maneuver prices, explaining why, even when prices were depressed in the primary half of 2023, activity was relatively higher than it’s now.

If that is the trend, it is probably going that as BTC shrinks, breaching key support levels, activity will further shrink as institutions and retailers draw back. The situation could worsen now that long-term holders have been moving coins in recent weeks.

One analyst notes that 75,228 BTC aged between three to 6 months were moved on August 27 alone. Yesterday, on August 28, 1,614 BTC aged between 18 months and two years were transferred.

Feature image from Canva, chart from TradingView