This Bitcoin metric forms a “triple bottom”, here’s what happened last time

On-chain data shows that the calculation for active Bitcoin addresses is forming a triple bottom right now. Here’s what happened the last time this pattern formed.

30-Day WMA Bitcoin Active Addresses Form Triple Bottom Structure

As pointed out by an analyst in a CryptoQuant post, the price of the cryptocurrency saw a sharp rise when this type of triple bottom structure took shape back during the bear market of 2018-2019.

The relevant indicator here is the “active addresses”, which measure the daily total number of Bitcoin addresses that become involved in some form of transactional activity on the chain.

Accounting for both senders and receivers in this calculation, it also only counts unique addresses, meaning that if the same address makes multiple transfers in a single day, it is still only counted once.

When the value of this indicator is high, it means that a large number of addresses are participating in some transfer activity right now. Such a trend suggests that traders may be active in the BTC market at present.

On the other hand, low values ​​mean that not many users are currently active on the blockchain. This kind of trend could be a sign that general interest in the cryptocurrency is currently low.

Now, here’s a chart showing the trend in Bitcoin active addresses over the last few years:

Looks like the value of the metric has been rising in recent weeks | Source: CryptoQuant

As shown in the graph above, the version of Bitcoin active addresses here is actually the 30-day weighted moving average (WMA). A WMA is a type of MA that places more weight on the newer data compared to the older (hence the “weighted” in the name).

From the chart, it is clear that this indicator’s value had plunged quite hard when the 2018-2019 bear market started and had remained at fairly low values ​​throughout.

The metric had made a few attempts to put together an uptrend, but it failed the first two times and made a local bottom. These bottoms, together with the bottom of the first plunge, together formed a sort of “triple bottom” shape.

After the last of these three bottoms, the metric was finally able to gather some actual upside momentum as it then proceeded to a local top.

Alongside this rise in the 30-day WMA active addresses, Bitcoin prices also observed a rally out of the bear market, in an event now called the April 2019 Rally.

There have been some interesting similarities already between the April 2019 rally and the most recent price rally observed by BTC. Curiously, the active address indicator has formed a similar triple bottom pattern in this bear market as well.

“If Bitcoin follows the triple bottom structure of the last major cycle, we are about to see incremental price increases over 2023,” explains the quant.

BTC price

At the time of writing, Bitcoin is trading around $22,400, down 5% in the last week.

The value of the asset seems to have gone stale since the plunge | Source: BTCUSD on TradingView

Featured Image by Kanchanara at Unsplash.com, Charts by TradingView.com, CryptoQuant.com