Ethereum flips Bitcoin by another metric as active addresses plummet.
The number of addresses active on the Bitcoin network has crashed roughly 60% in the past six weeks from 1.3 million to roughly 500,000.
The collapse in activity has seen Ethereum overtake Bitcoin by number of active addresses, with the Ethereum network hosting roughly 200,000 more active wallets than Bitcoin on July 27.
It is the third time this month, with Ethereum also having overtaken Bitcoin by the metric June 5, 2021, and June 6, 2021. The previous time ETH was in the lead was at the beginning of 2017.
Twitter analyst, Mr. Whale — known for his bearish takes — also noted that Bitcoin’s active addresses have fallen to their lowest level since April 2020 based on a weekly moving average.
Bitcoin’s active addresses on the blockchain network just plunged to its lowest level since April 2020.
This data is bearish. It shows demand for Bitcoin is drying up very quickly. pic.twitter.com/vdmwagbvtm
— Mr. Whale (@CryptoWhale) July 1, 2021
Several factors may be contributing to the aggressive drop in active Bitcoin addresses, including the more than 50% sell-off that followed Bitcoin’s all-time highs in May and subsequent sideways market action, and the massive crash in network hash rate amid China’s latest crack down on local Bitcoin mining operations.
Ethereum’s active addresses increased by more than 9% over the past week to tag 700,000, despite the price of ETH falling more than 10%. However, active Ethereum addresses are still down 22% from their early April peak of 900,000.
Flippening watch
Active addresses is the latest metric Ethereum has overtaken Bitcoin by, with Blockchain Center’s Flippening Index estimating Ethereum’s transaction fee revenue leads by more than 300%, while total transaction count is ahead by nearly 500%.
However, Bitcoin has also reclaimed a lead in both trading and transaction volumes after recently falling behind Ethereum.
Flippening Index: Blockchain Center
According to a June 23 report from on-chain analytics provider, Glassnode, the total number of unique addresses interacting with DeFi protocols has continued to climb since May, suggesting DeFi activity was rising despite the broader crypto meta-trend.
The data shows a nearly 40% increase in the number of wallets that have interacted with DeFi protocols since the start of May, pushing total user count up to more than 2.9 million. As such, persistent demand for DeFi from new users may explain Ethereum’s recent strength in network activity relative to Bitcoin.