Bitcoin (BTC) Price Primed for a Rally as Network Volume Hits 7-Month High, Dormant Coins Re-Enter Circulation

Bitcoin's network saw a notable surge in activity, driven by increased on-chain transaction volume and dormant Bitcoin re-entering circulation.

Bitcoin’s network activity surged notably with increased on-chain transaction volume and dormant Bitcoin re-entering circulation.

Recent data from Santiment highlights a shift in long-term holder behavior, as dormant Bitcoin movements have signaled future price growth in the past. As more BTC resumes circulation, the market anticipates potential upward momentum for the cryptocurrency.

Bitcoin On-Chain Volume Hits 7-Month High

The chart shared by Santiment tracks two primary metrics: on-chain transaction volume and the "Age Consumed" metric, which measures how much dormant Bitcoin is being moved. On Tuesday, Bitcoin’s on-chain transaction volume saw a significant spike, totaling $37.4 billion—the highest daily volume since March 12, 2024.

Age Consumed Metric

A key component in the recent network activity is the "Age Consumed" metric. This metric tracks older Bitcoin that has remained largely inactive for an extended period but is now being moved. On Tuesday, this metric showed a dramatic increase, indicating that a substantial portion of the $37.4 billion transaction volume was due to previously dormant BTC being transferred.

Santiment’s data also points to a whale transaction involving the withdrawal of 250 BTC, valued at $15.7 million, from Binance. This transaction contributes to the overall surge in on-chain volume, as the whale had previously stashed 10,158 BTC tokens at an average cost of $67K in March and April 2024.

Growing Adoption Reflected in New Addresses

In addition to the surge in on-chain volume, data from IntoTheBlock shows a notable increase in new Bitcoin addresses. Over the past week, new addresses have grown by 11.54%, with 325.87k new addresses recorded for the week ending October 7, 2024.

This uptick reflects growing interest in Bitcoin and suggests a potential expansion of the user base. Historically, spikes in new addresses have been correlated with rising Bitcoin prices, as seen during the major bull runs of 2017 and 2020-2021.

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