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Critical Bitcoin Price Warning as BTC Consolidation Nears an End
Bitcoin’s price has been stuck around $107,000 in recent days, leading to concerns about the sustainability of its current trajectory. Despite being just 5% away from its all-time high, there are warning signs that could indicate a pullback is imminent.
One key indicator is the network activity, which has remained surprisingly low despite the cryptocurrency’s remarkable price surge. CryptoQuant’s analysis reveals that active addresses on the world’s largest blockchain have failed to recover after the massive drop experienced in late March and early April when the underlying asset slumped below $75,000 amid Trump’s tariff threats.
Moreover, the network activity index, which combines factors such as active addresses, transaction counts, total UTXOs, and number of bytes per block, has also remained low. The BTC mempool, which displays pending transactions, shows very few transactions, indicating a lack of interest in the asset.
This is not the first instance of such a development this year. In early February, the network activity slumped, and subsequently, the price followed suit, demonstrating a clear correlation between the two. While it may seem concerning that retail investors are not driving the market, some argue that institutional investors could be enough to propel the cryptocurrency forward.
The rally in Bitcoin’s price has been attributed to institutions accumulating the asset via ETFs or OTC deals, which raises questions about whether retail participation is indeed necessary for further growth. In a changed landscape where Bitcoin is now a globally recognized asset attracting a broader range of investors, institutions could be enough to propel it forward without the need for retail involvement.
The market update highlights the need for caution in the current situation as consolidation nears an end.
Source: cryptopotato.com
