- Bitcoin network activity has decreased 15% since November 2023, reaching its lowest level in a year at 3,760.
- Daily transactions have fallen 53% to 346,000, down from a peak of 734,000.
- Mempool volumes have plummeted 99% to 3,000 transactions from December’s high of 287,000.
- The decline is largely attributed to reduced activity on the Runes Protocol, with OP RETURN codes dropping from 802K to 10K.
- Despite lower activity, long-term accumulator addresses suggest potential price growth ahead.
Bitcoin’s network metrics show a significant downturn in activity, reaching yearly lows despite steady price performance. Analysis from CryptoQuant reveals this divergence between network usage and market sentiment, highlighting changing dynamics in how investors interact with the world’s largest cryptocurrency.
The Bitcoin Network Activity Index, a comprehensive measure encompassing active addresses, transaction volume, and blockchain metrics, has fallen to 3,760 – its lowest point since February 2024. This 15% decline from November’s peak reflects a broader shift in network utilization patterns.
Transaction volumes paint a particularly stark picture. Daily transactions have more than halved, dropping to 346,000 from previous highs of 734,000. The mempool, which serves as a waiting room for unconfirmed transactions, has experienced an even more dramatic decline, with pending transactions falling to levels not seen since March 2022.
CryptoQuant analysts attribute this decline primarily to reduced activity on the Runes Protocol, a relatively new system for creating fungible tokens on Bitcoin. “The collapse in the use of the RUNES protocol to mint tokens on the Bitcoin network” has been particularly evident in the sharp decrease of OP RETURN codes – from 802,000 to just 10,000 daily instances.
However, market analysts note a potentially bullish signal: increasing accumulation by long-term holders. These addresses, which typically hold Bitcoin without engaging in frequent transactions, have shown growing activity. Historically, such accumulation patterns have preceded price increases, suggesting that while network activity may be down, investment conviction remains strong.
The contrast between reduced network activity and sustained accumulation behavior highlights Bitcoin’s evolving role – from a purely transactional system to what many view as a digital store of value, similar to Gold‘s historical position in traditional markets.
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