Bitcoin On-Chain Activity Lags Behind Price Action, But Why?

Data reveals that while Bitcoin’s price is shooting up, the on-chain activity hasn’t improved much in the past week. What could be the reason behind this behavior? Bitcoin Breaks $50k, But Activity Lags Behind As per this week’s edition of the Arcane Research report, on-chain activity seems to be slow to recover despite the price of the cryptocurrency jumping high. The metric used for measuring the activity here is the Bitcoin 7-day average number of active addresses indicator, which as its name suggests gives the number of address on the network that saw transactions within a specific period of time. Now, here is the chart for the BTC number of active addresses (7-day average) vs the price: Bitcoin's activity seems to be lagging behind the price | Source: Arcane Research On examining the above graph, two things become apparent. First, the number of active addresses right now is just under 900k. This shows that the indicator has certainly recovered since the lows of around 750k after the price crash. Second, while the Bitcoin price has now risen to about $50k, the activity hasn’t shown as big a spike yet. The active addresses are still at the same levels as they were during the summer of 2020, when the price was around $10k. During the bull rally earlier in 2021, the same metric’s value crossed 1.2 million. Related Reading | “Buckets Of Addresses” Accumulating Bitcoin Suggest...