- The number of Bitcoin wallets with non-zero BTC balance recently hit a new all-time high of 45.388 million.
- However, daily active addresses and daily confirmed transactions have fallen.
- Bitcoin price remains bullish but analysts urge caution as on-chain metrics indicate weakness amid renewed correlation with S&P 500.
Bitcoin price currently trends above$28,300, about 0.7% higher in the past 24 hours. The slight uptick follows the crypto market moving beyond rumours around a Red Notice warrant for Binance CEO Changpeng Zhao.
Bitcoin’s resilience also comes after the market reacted upward on Twitter CEO Elon Musk’s move to replace the platform’s bird symbol with a Shiba Inu dog, a symbol for DOGE – the native token of the original meme crypto Dogecoin.
DOGE price shot up more than 30% to above $0.1 for the first time since early December 2022.
Bitcoin growth outlook: non-zero balance wallets hit 45.4 million
Bitcoin continues to see huge demand as non-zero balance wallets grow to more than 45 million, according to details shared in the latest Bitfinex Alpha report.
But even as the benchmark cryptocurrency records a new high for small BTC holders , with this the fastest rate non-zero balance wallets have grown since early 2021, analysts commenting on Bitcoin price in the report suggest investors might have to be a bit cautious in the short term.
According to on-chain data, non-zero addresses count hit 45.388 million last week as Bitcoin price held above$27k to end the first quarter on a bullish note.
The jump in non-zero balance wallets marks a positive development for the network and for Bitcoin price, with this metric’s growth suggesting that more investors have recently entered the Bitcoin market. In any case, an increase in non-zero balance holders often points to new demand, particularly from small investors.
Yet, this positive outlook aside, other on-chain metrics suggest bulls may need to be cautious in the short term. As noted in the Bitfinex Alpha report, the market is in a transition and indecisive.
“A transition state is characterised by choppy market conditions where the price consolidates in a tight range before trending in either direction. Despite an influx of new market entrants, the sustainability of this phenomena of both rapidly growing non-zero balances and tight range-trading for Bitcoin remains uncertain,” they noted.
BTC price – key on-chain metrics suggest weakness
Bitfinex analysts suggest that other metrics indicate Bitcoin price may continue to consolidate around $28 as both bulls and bears remain indecisive.
Among key on-chain metrics to watch are bitcoin network statistics related to daily active addresses and daily confirmed transactions.
For instance, the 7-day moving average of daily active addresses recently dropped to levels last seen in late January. The number of confirmed daily transactions have also declined.
In the past two weeks, the Bitcoin network recorded a 7-day average of 293,058 transactions with the figures on 30 March suggesting a 13% decline from data recorded on 8 March. The Bitfinex analysts commented on the two metrics:
“While this is an inconclusive indicator in terms of bullish or bearish signals, daily activity and transactions decreasing for Bitcoin have always occurred at transitionary phases in the crypto market. They suggest indecision and an unsettling predicament for both bulls and bears.”
Bitcoin’s correlation with S&P 500 – is it rising again?
While bulls attempt to strengthen above $28k again, data shows BTC correlation with stocks is increasing after falling significantly in early March, with BTC price outperforming the major US indices over the month and year-to-date at the end of Q1, 2023.
However, per the Bitfinex report and as CoinJournal analyst Dan Ashmore highlighted last week, Bitcoin is on track to restore its correlation with the S&P 500 and the NASDAQ composite as its price continues to hover between $27k and resistance above $28k.
Notably, the Pearson metric shows BTC/NASDAQ correlation is up to 0.61 while correlation with the S&P 500 reads 0.12.
Any value above zero indicates a positive correlation and these figures suggest Bitcoin could trade more in lockstep with equity indices amid macroeconomic headwinds.
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