Active addresses and Bitcoin trading volumes hit record highs

Trading volumes on exchanges and the number of active addresses on the Bitcoin blockchain surpassed the peak levels seen in 2017. CoinDesk analysts polled see this as a precursor to a continued bull market.

According to CryptoCompare, at the start of 2021 daily trading volumes on the eight largest Bitcoin exchanges exceeded $11 billion. The metric surpassed the peak from three years earlier.

Data: CoinDesk, CryptoCompare.

“The increase in trading volumes on Bitcoin exchanges is a key sign of the growth of scale and maturity in the cryptocurrency market. The rise in trading activity increases liquidity and improves its efficiency,” says Bendik Norheim Schei, Head of Research at Arcane Research.

The expert is confident that the spike in volumes on January 11, when Bitcoin’s price temporarily fell below $31,000, was the result of selling by newcomers.

“Some of the liquidations are definitely attributable to new and inexperienced investors entering the market for the first time and panicking when the price begins to fall. Such corrections are an inherent element of a healthy bull market,” the specialist explained.

According to Glassnode, January 8 marked a new historical maximum for the number of active Bitcoin addresses. At one point, the seven-day moving average for the metric surpassed 1.3 million.

Data: Glassnode.

“This spike indicates an even higher level of adoption of Bitcoin. It suggests that the number of market participants may be higher than ever before,” the researchers noted.

As reported, investor Bill Miller said that the first cryptocurrency has not exhausted its growth potential due to unmet demand from institutional and retail investors.

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