Bitcoin (BTC) failed to plant a flag above $9,000 early on Tuesday, even as on-chain data suggests spiking investor interest in the top cryptocurrency by market value. 

Prices rose to a high of $9,112 at 05:05 UTC, extending a recovery from Monday’s low of $8,528. At press time, the cryptocurrency had dropped back to near $8,850 on major exchanges, representing a 1.9% decline on the day, according to CoinDesk’s Bitcoin Price Index

While the cryptocurrency found dip demand on Monday, the seven-day average of the number of unique addresses active on the network, as sender or receiver, rose to 932,274 – the highest level since June 29, 2019, according to the data provided by blockchain intelligence firm Glassnode

glassnode-studio_bitcoin-active-addresses-7-d-moving-average
Bitcoin active addresses
Source: Glassnode

The non-price metric has risen by nearly 40% from lows observed in March and likely represents an influx of bitcoin investors, according to analysts. 

“There is more media [attention] around the halving, which is causing more account openings; we’re seeing that on the retail side too,” Chris Thomas, head of digital assets at Swissquote Bank, told CoinDesk. 

Bitcoin is set to undergo its third mining reward halving next Tuesday, following which the rewards per block mined will drop to 6.25 BTC from the current 12.5 BTC. The impending supply cut has been hailed as a long-term bullish development by many analysts.

See also: Bitcoin’s Halving Is Irrelevant for Some Large Traders

The hype surrounding the halving, coupled with the drop below $4,000 seen in mid-March, may have enticed existing investors to add more coins to their wallets and new investors to dip a toe in the cryptocurrency space. This is evidenced by the fact that unique active addresses began rising in the second half of March. 

“We have observed a significant increase in ‘new money’ entering the ecosystem. Several exchanges and retail platforms are reporting a surge in Bitcoin deposits, new signups, and credit card purchases since the low that took place on March 13,”  said Matthew Dibb, co-founder of Stack, a provider of cryptocurrency trackers and index funds.

While the ecosystem looks to be expanding, each unique active address does not necessarily represent a single investor or user. A single person or an exchange can hold multiple addresses. Large investors, popularly known as whales, could buy, say, 10,000 bitcoins and hold them in many addresses. 

Looking ahead, observers expect the number of active addresses to continue rising post-halving. “We’ll see higher account openings at the end of May if we go through $10,000,” said Thomas. 

If history is a guide, though, the cryptocurrency has potential to see a price pullback post-halving. It fell nearly 30% in the four weeks following its second halving on June 9, 2016.

Meanwhile, Dibb expects active addresses to reach levels seen during the height of the previous bull market in December 2017 on the back of continued retail demand and adoption by new entrants. The seven-day average of active addresses clocked a record high of 1,190,302 on Dec. 18, 2017, the day the cryptocurrency clocked a lifetime high of $20,000.

As far as the cryptocurrency’s price is concerned, volatility is expected to rise as we head into the halving. 

“The push above $9,000 seen this morning is positive and could be the first indication that we have now started the run into the halving. Parts of Asia (Japan and China) were off today, but when they return tomorrow we will be just a week away from the halving so we can expect to see an increase in volatility,” said Marcus Swanepoel, CEO of the cryptocurrency platform Luno, earlier on Tuesday. 

See also: Bitcoin Whale Addresses Hit Highest Number Since August 2019

From a technical standpoint, the cryptocurrency’s repeated failure to keep gains above $9,000 is indicative of buyer exhaustion and suggests scope for a price pullback, possibly to $8,000, as discussed on Monday.

Disclosure: The author holds no cryptocurrency at the time of writing.

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