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Critical Bitcoin Price Warning as BTC Consolidation Nears an End
Bitcoin (BTC) has been trading around $107,000 in recent days, leaving many investors wondering what the future holds for the cryptocurrency. While some may be optimistic about the price’s potential to continue its upward trajectory, others are sounding the alarm, warning that consolidation is nearing an end and a pullback could be imminent.
The latest data from CryptoQuant suggests 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. Despite the price recovering and even breaking its previous all-time high, retail interactions have remained minimal, with few signs of improvement.
Moreover, the network activity index has also remained low, combining factors such as active addresses, transaction counts, total UTXOs, and number of bytes per block. The BTC mempool, which tracks pending transactions, is also showing very few pending transactions. According to CryptoQuant’s CryptoMe, this could be a cause for concern.
“It sometimes happens that the mempool can be low due to technologies like SegWit or batching,” CryptoMe explained. “However, when we also see a drop in active addresses and low network activity, it clearly shows that the reason is a lack of interest.”
This is not the first instance this year where such a correlation has been observed. The network activity slumped in early February as well, and the price followed suit, showing a clear correlation between the two.
While some may see this data as a cause for concern, others believe that institutional investors are more than capable of driving the cryptocurrency’s price higher without the need for retail participation. As mentioned earlier, reports have emerged indicating that the recent rally was driven primarily by institutions accumulating the asset via ETFs or OTC deals. This raises an important question: do we really need retail investors to push BTC further north?
In a nutshell, the answer seems to be no. The fact that Bitcoin has already managed to recover and set a new record despite low network activity may suggest that this rally is not driven by retail investors and that they are not necessarily needed to push the price higher.
Source: cryptopotato.com
