Bitcoin Daily Active users continue to test the Bear Market Channel

Data shows that the daily Bitcoin units have recently retested the bear market channel as the crypto’s user base observed little growth.

Bitcoin Number of Active Units Continues to Move Laterally

According to the latest weekly report from Glassnode, the BTC network is seeing weak activity on the chain as the daily users have tested the lower part of the bear market channel.

The relevant indicator here is the “number of active units”, which tells us the amount of unique units that were active on the Bitcoin blockchain as either senders or receivers.

“Entities” here refers to an address or group of addresses on the network controlled by a single entity or user. Therefore, the calculation is closer to being analogous to daily active users than daily active addresses.

Now, here is a chart showing the trend in Bitcoin number of active units in recent years:

The value of the metric seems to have been moving mostly sideways in recent days | Source: Glassnode's The Week Onchain - Week 35, 2022

As you can see in the graph above, the value of the active Bitcoin units has decreased recently and has shown stagnation.

Historically, the indicator has typically consolidated within the “bear market activity channel” during bear markets. While in bulls, the metric has generally broken over and stayed there during the run.

The number of active units is currently stuck at the lower end of this range, and has made some retests of the borderline in recent weeks.

This means that there has been little growth in the active user base of Bitcoin as activity on the chain has been extremely weak recently.

The report notes that if the active units decline further from here, they will dive into a zone of weakness not seen in many years now, as the user base will see an unfortunate deterioration.

BTC price

At the time of writing, Bitcoin’s price is hovering around $20.4k, down 5% in the last seven days. Over the past month, the crypto has lost 14% in value.

The chart below shows the trend in the price of the coin over the last five days.

Looks like the price of the crypto has seen a little recovery during the past day | Source: BTCUSD on TradingView

Bitcoin plunged a few days back, and after apparently bottoming out around $19.5,000, the coin has bounced back just above the $20,000 level in the past couple of days.

Featured image from Andy Holmes on Unsplash.com, charts from TradingView.com, Glassnode.com