The Bitcoin network is experiencing a significant slowdown, with activity metrics falling to their lowest levels in a year. This decline is evident in key indicators such as active addresses, transaction volume, and mempool size.
The Bitcoin network is experiencing a significant slowdown, with activity plummeting to its lowest point in a year. According to the Bitcoin Network Activity Index from CryptoQuant, a market analytics platform, the index hovers around 3,760, marking a 15% drop since its record high in November 2024. This decline, which reflects the lowest activity level since February 2024, encompasses nearly all aspects of the Bitcoin network.
The index, which measures key metrics like block size, active addresses, and transaction volume, has fallen below its 365-day moving average for the first time since July 2021, coinciding with China's ban on Bitcoin mining. A closer look at various network components reveals a drastic reduction in activity. The number of active addresses and transactions has declined by double digits. Daily transaction volume has plunged by 53% from its all-time high of 734,000 in September 2024 to 346,000, the lowest level since March 2024. Similarly, the number of active Bitcoin addresses has dropped by 20% from 1.14 million in November 2023 to 942,000 currently, the lowest point since October 2024.This lull in activity is also impacting Bitcoin miners. Total transaction fees have dropped significantly due to the low network usage. Daily transaction fees now stand at $593,000, a far cry from the peak of $4.7 million recorded in late October 2024. Transaction fees currently represent only 1.8% of total revenue for Bitcoin miners, indicating a decline in profitability for this segment of the market. Furthermore, the near-empty Bitcoin mempool is a stark indicator of the network's low activity. The number of transactions awaiting inclusion in a block has plummeted by 99% from 287,000 in December 2024 to a mere 3,000 currently. CryptoQuant states that the mempool hasn't been this empty since March 2022, during the last bear market. Adding to the list of indicators pointing towards low activity, the Bitcoin network has witnessed a sharp decline in the utilization of the Runes protocol. Launched in April 2024, Runes was designed for minting tokens on the Bitcoin network. Initially, daily OP RETURN code usage reached 802,000. However, this figure has drastically fallen to 10,000 today, signifying a significant reduction in OP RETURN code usage within Bitcoin transactions. From a network activity perspective, Bitcoin (BTC) appears overvalued at its current price of $97,000. The red and blue Metcalfe valuation bands indicate that the asset's fair value lies between $48,000 and $95,000
BITCOIN NETWORK ACTIVITY TRANSACTION FEES ACTIVE ADDRESSES MEMPOOL RUNES PROTOCOL METCALFE VALUATION
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