- Bitcoin rose to $26,500 as active addresses remained high.
- While the market has become optimistic, BTC may only consolidate in the short term.
Bitcoin [BTC] tapped $26,500 on 12 September, in a move that saw some level of optimism return to the market. However, the increase only lasted for a while, as the coin dropped to $25,800. After this, it had a mild recovery back above $26,000.
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The king coin rebounds and weakens
On-chain analytic platform Santiment weighed in on the events that led to the hike. It also considered the action that led to the drawdown in its recent post on X (formerly Twitter).
According to Santiment, the rebound to $26,500 was propelled by an active in addresses interacting with Bitcoin.
📈 #Bitcoin continues its price dominance, and has bounced back to as high as $26.5K. There have been 1.1M daily addresses interacting on the $BTC network since Thursday, a 5-month high. Today, traders are profit taking after the mild rise since yesterday. https://t.co/gYZmp7v4NL pic.twitter.com/J9wHMK2fbg
— Santiment (@santimentfeed) September 12, 2023
Before now, AMBCrypto reported that active addresses on the Bitcoin network jumped to a five-month high. Since then, about 1.1 million active users have been associated with BTC.
As an indicator of speculation around a coin, active addresses have been historically instrumental to changes in price direction. This time, it seemed not to be any different.
Also, the retracement below $26,000 could be linked to the quick profits market participants took moments later. From Santiment’s data, Bitcoin’s trading volume jumped to $15.86 billion after the fall to $5.28 billion on 10 September.
This surge in the metric implied that there was a rise in exchange activity involving BTC, making it a credible sign of a continuous bullish trend. So, a reclaim of $26,500 could be likely.
That is, if addresses continue to be actively involved in Bitcoin transactions.
Optimism could lead sideways
Interestingly, Bitcoin has also experienced a change in sentiment. Previously, BTC’s weighted sentiment dropped as low as -0.498. However, at press time, the metric had jumped to 1.419.
The weighted sentiment measures the unique social volume while tracking the texted opinions of the market. A positive weighted sentiment implies increasing positive commentary about an asset.
Conversely, when the value of the metric is negative, it means that the broader market is not optimistic about the price action. But it was the former with BTC.
As per the exchange flow, it is possible for BTC to consolidate in the short term. This was because the exchange inflow at press time was 2365. The exchange inflow is the amount of BTC sent into exchange from external wallets.
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On the other hand, the exchange outflow was 2592. This metric is the amount of assets withdrawn from exchanges into non-custodial wallets.
So, the closeness in the number of inflows and outflows at press time suggested that profit-taking and accumulation were almost equal.