Bitcoin is struggling to break out of the bearish market structure in place since late October. Despite several bouts of short-lived relief, price action continues to reflect weakness, with the bulls failing to regain key resistance levels or generate sustained momentum.
As uncertainty and fatigue spread through the market, many participants are wondering whether Bitcoin’s current behavior fits the traditional cycle framework that defined previous bull and bear phases.
A recent analysis from Darkfost highlights a structural shift that adds important context to this debate. According to the data, the number of active Bitcoin addresses has been in persistent decline since April 2021. Historically, bull phases were characterized by a sharp expansion of active addresses, as new investors entered the market and on-chain activity increased. This growth typically peaked near cycle peaks, followed by contraction during bear markets as participation dried up.
This cycle, however, seems markedly different. Even during periods of strong price performance since 2022, active addresses have failed to recover significantly and have continued to decline. This divergence suggests that Bitcoin’s market structure could be evolving from a retail-focused on-chain participation model to something more concentrated and institutionally influenced.
As Bitcoin attempts to stabilize after weeks of downward pressure, understanding these structural changes becomes essential. The decline in active addresses may not only signal weakness, but rather a transformation in how Bitcoin is held, traded, and valued during this cycle.
Active addresses signal a structural change in the market
The analysis suggests that despite Bitcoin’s strong price performance since 2022, on-chain participation continues to deteriorate. Active addresses are once again approaching the lowest levels seen during this cycle, highlighting a growing disconnect between price action and network activity. At the April 2021 peak, Bitcoin recorded around 1.15 million active addresses. Today, that figure has almost halved, standing at nearly 680,000, a contraction that cannot be ignored.
This decline is difficult to attribute to a single cause. Instead, it likely reflects a combination of structural changes in how Bitcoin is held and accessed. One contributing factor appears to be the increase in inactive addresses. While the precise classification criteria varies, the broader trend points toward a stronger long-term holding mentality, in which coins remain dormant rather than actively traded on-chain. This behavior reduces visible network activity without necessarily implying a bearish conviction.
At the same time, a portion of market participants may have abandoned direct on-chain usage altogether. Centralized exchanges, custodial platforms, and financial products such as ETFs provide exposure to Bitcoin without requiring on-chain interaction. As a result, demand for block space is decreasing even though capital allocation to Bitcoin remains large.
Overall, the sustained decline in active addresses suggests that the structure of the Bitcoin market is changing. The network is becoming less retail-focused and more concentrated, reinforcing the idea that traditional cycle measures may lose some of their explanatory power in this environment.
Bitcoin Price Tests Long-Term Support as Structure Weakens
Bitcoin continues to trade under pressure, with the chart highlighting a clear deterioration in market structure. After failing to sustain prices above the $100,000-$110,000 zone earlier in the year, BTC entered a corrective phase marked by lower highs and strong selling momentum. The recent move towards the $87,000 area places the price directly on a critical demand zone, closely aligned with the rising long-term moving averages.
From a trend perspective, the loss of short- and medium-term moving averages is significant. The blue and green averages have reversed, acting as dynamic resistance rather than support, thus reinforcing the bearish bias.
Price is now hovering just above the long-term red moving average, a level that has historically defined the boundary between bullish market corrections and deeper bearish transitions. A clear break below this zone would significantly increase the downside risk towards the $80,000 region.
Volume behavior adds additional context. Selling pressure increased significantly during the sharp decline from the highs, while recent rebound attempts took place on comparatively lower volume. This suggests that interest in dip buying remains cautious rather than aggressive. Structurally, the market seems to be consolidating after distribution, without yet forming a solid base.
In the short term, it is crucial to maintain the range of $85,000 to $88,000. Failure to defend this area would confirm a broader trend shift, while reclaiming the $95,000-$100,000 region is necessary to neutralize the current bearish structure.
Featured image from ChatGPT, chart from TradingView.com
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