Santiment cautioned Bitcoin bulls about the cryptocurrencys downside prospects in its latest on-chain analysis.
The crypto-focused sentimental analysis platform highlighted a steep decline in the number of daily active addresses (DAA) on the Bitcoin network. The data reflected that there are now fewer wallets that send or receive Bitcoin on a day-to-day basis. Santiment asserts that DAA correlates strongly with the assets price action.
For example, throughout Q1 of 2019, the DAA were steadily growing way before the market started to recover, the portal wrote in DAAs introductary note. Same holds true for July 2019, when a decline in DAA preceded a decline in price.
Bitcoin DAA and Price Divergence chart from Santiment hints a bearish correction
The pattern hinted at repeating in August 2020, it noted. The DAA readings returned two ten percent-long red bars – like the ones seen before the March 2020 crash. They prompted Santiment to expect a fractal echo in the coming sessions, pointing to declines in the Bitcoin market.
This is a pretty big cautionary indicator that if DAA doesnt improve soon, a medium to large pullback can take place by the end of August, the portal predicted.
Santiments analysis came right after Bitcoin (Ticker: BTCUSD) plunged by more than 8 percent from its local high above $12,000. An absence of adequate buying sentiment near the said level led daytraders to sell their holdings. The correction also took place to neutralize Bitcoins excessively