• The ongoing bearish run of the Bitcoin price was expected, as the asset’s total active addresses declined considerably from Q1 2024. 

• A 10x Research report estimates that Bitcoin’s price could fall to as low as $45k if it fails to maintain its position above $50k. 

The Bitcoin (BTC) price, after experiencing a quick nosedive within the previous week, reached a point of stability over the weekend, moving in a tight range between $54k and $55k as bulls and bears battled for supremacy. On Friday, August 6, the asset had over $220 million long liquidated after a sharp fall followed the US job reports.

In a research report published by Digital asset investment firm 10x Research, Markus Thielen, who is the Head of Research, argued that the current fall below $55k from its $73,750 all-time high in March was expected. His reason is that the Bitcoin active addresses and broader market decisions started experiencing a drastic decline after the first quarter of 2024 (Q1 2024) from its peak in November 2023. 

Bitcoin addresses peaked in November 2023 and sharply declined after the first quarter of 2024. When the amount of Bitcoin held by short-term holders began to decrease in April, while long-term holders took advantage of high prices to exit, it suggested that a cycle top had been reached.

According to our research, the total number of active Bitcoin addresses was around 1.2 million in November 2023. As of March 2024, the number was still a little over 1 million. However, the number has witnessed a drastic decline to 612,000 since March. This implies that hundreds of thousands of users have stopped engaging in Bitcoin, indicating a weakened interest and reduced activities in the past few months. 

More on the Bitcoin Price Analysis

In his report, Thielen predicted that the Bitcoin price could likely decline to as low as $45k. He cited the considerable increase in net US Exchange Traded Funds (ETF) outflows as a bearish indicator supporting this thesis. From August 27 to September 6, the net outflows exceeded $1 billion. Within the period, Fidelity saw its FBTC fund losing $450 million worth of shares. Grayscale’s GBTC followed the redemption with about $280 million in outflows. Ark 21Shares’ ARKB fund also recorded more than $220 million in outflows in just eight days. 

In Glassnode data, the bearish outlook was confirmed by the Mayer Multiple. This metric mostly identifies speculative bubbles in Bitcoin. In this case, a reading above one is interpreted as a bullish trend. At press time, the Mayer Multiple reading was “standing” at 0.8. The Bitcoin price was also below the 200-day EMA, hinting at a possible drop below $50k. 

A technical look at the weekly BTC/USD chart shows that the market is imitating the November 2021 behavior, which preceded the 2022 bearish trend. At that time, Bitcoin lost support at $50k in January 2022 and dropped to $36k towards the end of 2022. 

According to analysts, Bitcoin could follow a similar trend and drop towards $40k if bulls fail to seize control and force a rebound. Conversely, a CNF report predicts that there could be a general turnaround in the crypto market that could push Bitcoin to $100k and Ethereum (ETH) to $4k by December 1. 

At press time, Bitcoin was trading at $55.3k, having surged by 1.3% in the last 24 hours. 

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