Bitcoin Network Slowdown Signals Potential Price Ceiling as $100K Level Remains Elusive

Bitcoin 's market has been unyielding in tight trading boundaries, unable to maintain a position above the $100,000 threshold since the year began. This stagnation, as highlighted by a crypto analyst, may stem from a notable downturn in Bitcoin's network activity.

CryptoQuant's pseudonymous analyst, Yonsei_Dent, recently reported that dwindling activity on the Bitcoin network has led to its price stabilization in recent times. Dent's analysis of Bitcoin’s active address metrics reveals a "death cross" between the short-term 30-day moving average (30DMA) and the longer-term 365-day moving average (365DMA). This formation signals a deceleration in market engagement.

Such a trend implies diminishing involvement from short-term investors. The 30DMA falling below the 365DMA indicates reduced trading and participation on the network in the short term. Historically, similar patterns in Active Addresses have often aligned with bearish market conditions. Thus, this could serve as a cautionary indicator, according to Dent.

The drop in active address counts has inevitably affected the daily transaction volume on Bitcoin's Layer-1 blockchain. Dent's findings emphasize that transaction rates have been on a decline since the fourth quarter of 2024, underscoring the potential for continued market stagnation in the medium to long term.

Since December 19, Bitcoin has encountered resistance at $102,722, while maintaining support at $91,431. An examination of the moving average convergence divergence (MACD) suggests a potential breach above this resistance soon. As of now, Bitcoin's MACD line (blue) lies above its signal line (orange).

The MACD evaluates price trends and momentum, signaling when to buy or sell. This current configuration indicates strengthening bullish momentum. It points to growing buying pressure, potentially pushing Bitcoin’s price higher.

A successful push past the $102,700 resistance could drive Bitcoin's price toward its all-time high of $108,200. However, an inability to surpass this resistance might direct the price downward to the support level of $91,400. A failure to maintain this support could result in a further decline to $86,000.