Although Bitcoin’s (BTC) 2023 rally appears to be stalling, with the maiden crypto experiencing one of the most significant weekly losses since November, on-chain data indicates there might be overall optimism among investors.
In particular, as of February 6, around 620,000 small Bitcoin addresses have re-emerged on the network at an accelerated rate since the collapse of the FTX crypto exchange, data by crypto analysis platform Santiment indicates.
According to the platform, the addresses hold about 0.1BTC or less and had recorded suppressed growth in 2022, but they are showing a resurgence in 2023, especially after Bitcoin reclaimed the $20,000 spot.
“There have been ~620k small Bitcoin addresses that have popped back up on the network since FOMO returned on January 13 when price regained $20k. These 0.1 BTC or less addresses grew slowly in 2022, but 2023 is showing a return of trader optimism,” the platform said.
Implication of resurgence in smallholder activity
Overall, the resurgence in smallholder activity is a promising sign for the cryptocurrency market, as it indicates that more people are becoming interested in investing in Bitcoin. This comes after Bitcoin prices traded in the red zone for the better of last year.
Indeed, 2023 has come with the optimism of the market embarking on a new bull run, hence the FOMO sentiment. Notably, the uptick in the retail trade could have contributed to Bitcoin’s recent gains.
Additionally, Bitcoin’s rally has mainly been aided by positive macroeconomic factors. However, the asset’s momentum has stalled, with experts pointing out that the new week slump marks the beginning of a ‘buy the dip’ week for the crypto.
Bitcoin price analysis
Currently, Bitcoin has failed to hold above the $23,000 level. By press time, the asset was trading at $22,810, representing weekly losses of almost 3%.
Interestingly, despite Bitcoin facing bearish sentiments, the asset is on the verge of undergoing a bullish golden cross. The pattern forms when the 50-day moving average price tops the 200-day. In this case, the pattern last occurred before bull markets in 2020 and 2021.
Elsewhere, Bitcoin controls a market capitalization of $439.67 billion. As Bitcoin embarks on a bearish outlook, the crypto community focus turns on the upcoming inflation data and how it will influence the Federal Reserve’s monetary policy.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.