Bitcoin Price Dips, Here’s a Positive Sign as Active Users Spike

According to on-chain analytics firm Santiment, a rise in Bitcoin daily active addresses might be a positive sign for the Bitcoin price. Bitcoin (BTC) sellers became active after buyers failed to sustain a break above $45,000 twice in the previous week.

Traders have already taken profits on the move, as Bitcoin hit a low of $41,570 on Feb. 14, but it has since risen somewhat to about $42,000 at press time.

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According to Santiment, Bitcoin is continuing to demonstrate a solid mid-term increase in utility, with the biggest activity day being Feb. 12, when 1.08 million addresses were transacted on the Bitcoin blockchain. According to the on-chain analytics firm, an increase in participants transacting on the BTC blockchain is a positive sign of greater utility, which precedes price increases.

BTC price action

BTC/USD Daily Chart, Source: TradingView

Bitcoin remains far away from last week’s highs of $45,855 amid investors’ concerns about ongoing inflationary pressure and growing tensions over a possible war with Russia; Ethereum and the bulk of the altcoins were also losing value at the time of publication. The Crypto Fear and Greed Index is currently at “fear.”

Related:  The case for Bitcoin as a hedge against inflation

The index, which uses a basket of factors to produce a nominal sentiment score from 0 to 100, measured 46 at the time of writing, having recovered to the ”neutral” zone earlier.

Over the weekend, the largest cryptocurrency was restricted to a tight range and was nearly flat over the preceding 24 hours. Pullbacks could be stabilized if initial support at $40,000 is found. Bitcoin was trading at around $42,091 at the time of writing.

After a drop from the $45,855 level last week, Bitcoin stayed above the $41,914 support (MA 50) over the weekend. Bitcoin has shown strength this month after falling to lows of $32,950 on Jan. 24. BTC breached the resistance levels of $38,000 and $41,500 in the first week of February, reaching monthly highs of $45,855, levels last seen in late December 2021.

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