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Yearly Low in Bitcoin Network Activity Hints at Possible Price Drop to $86K: CryptoQuant

Bitcoin network activity has fallen to its lowest level in a year as demand for the leading digital asset remains low.

A 报告 from the on-chain analytics platform CryptoQuant has revealed that the Bitcoin Network Activity Index, which measures the growth across major metrics like active addresses, number of transactions, and block size, is down 17% from its November 2024 record high.

Bitcoin Network Activity in Negative Trend

The network activity index is currently at 3,658, the lowest level since February 2024. It has also fallen below its 365-day moving average, an occurrence not seen since July 2021, after China placed a ban on Bitcoin mining. This indicator signals that activity on the world’s largest blockchain network has entered into a negative trend.

Bitcoin’s apparent demand growth has been on a decline since November-December, when it experienced a period of acceleration.

Following the conclusion of the U.S. presidential elections, Bitcoin demand surged to 279,000; however, the metric hovers around 70,000 today. Factors affecting demand growth include economic uncertainty regarding the imposition of trade tariffs in the U.S., inflation fears, and potential selling pressure from bankrupt crypto exchange FTX repayments.

Bitcoin Demand Remains Weak

The weak demand for BTC is also seen in purchases from the spot Bitcoin exchange-traded fund (ETF) market. Bitcoin ETF daily purchases have plummeted from over 18,000 BTC in early November to less than 1,000 BTC currently. CryptoQuant noted that BTC rallies have historically coincided with rising ETF purchases; however, current purchase levels do not support such price surges.

Moreover, CryptoQuant’s Inter-exchange Flow Pulse shows that Bitcoin spot demand has slowed in the U.S. The volume of BTC flowing from other exchanges to Coinbase has declined and fallen below its 90-day moving average, indicating relatively lower demand and a period of price correction.

What’s Next for BTC?

Furthermore, stablecoin liquidity expansion has slowed down. The total market cap of stablecoins has hit new highs above $200 billion; however, their liquidity is expanding at a slower pace. Tether (USDT), for example, has seen a 92% decline from the December 16 60-day change of $20.4 billion in market cap – the figure now sits at $1.5 billion.

CryptoQuant says BTC needs a new wave of stablecoin liquidity expansion to rally again. The cryptocurrency could fall towards $86,000, the Trader’s On-chain Realized Price minimum band, if demand growth and liquidity conditions do not improve soon enough.

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