Bitcoin Network Activity Is Declining — Impact On Price?

A sluggish Bitcoin price performance has not been the only disappointing theme for the largest crypto market so far in 2025. According to the latest on-chain data, the Bitcoin network fundamentals have been dwindling since the final quarter of last year.

In a Quicktake post on the CryptoQuant platform, a crypto analyst with the pseudonym Yonsei_dent explained how recent price stagnation is tied to declining network activity. One of the relevant on-chain indicators here is the Active Addresses (AA) metric, which measures the number of wallet addresses involved in a transaction within a specific period.

Usually, the Active Addresses metric is used to evaluate investor sentiment on a particular blockchain. According to Yonsei_dent, the number of active addresses on the Bitcoin network is steadily declining, suggesting a “potential weakness in investor participation.”

Additionally, a “death cross” recently formed between the AA’s 30-day moving average (30DMA) and its 365-day moving average (365DMA). For context, a “death cross” in technical analysis refers to a bearish signal marked by a short-term moving average crossing below a longer-term moving average.

This death cross signals a bearish momentum is forming and that a prolonged downward trend (for both price and network activity) might be on the horizon.

Yonsei_dent added:

While the two metrics have been fluctuating in a tight range, the 365DMA remains in a downward trend, suggesting a prolonged slowdown in network engagement.

Furthermore, another on-chain metric spotlighted by the Quicktake analyst is Transaction Count, which measures the number of unique transactions on the network within a specific period. According to data from CryptoQuant, the number of unique transactions on the Bitcoin network has been declining since Q4 2024.

Yonsei_dent associated this worrying trend with the global macroeconomic uncertainty and increasing risk aversion that has plagued the market since US President Donald Trump took the Oval Office.

As inferred earlier, the declining network activity does not exactly bode well for the Bitcoin price action. Periods of low transaction activity have often coincided with prolonged sideways movement and sometimes price corrections.

This trend might explain the price performance of the premier cryptocurrency in 2025. The Bitcoin price has struggled to maintain any serious bullish momentum to push new highs.

As of this writing, the price of Bitcoin sits just above $97,700, reflecting a measly 0.3% increase in the past 24 hours. The coin’s weekly record is not any better, as the market leader has increased by barely 1% in the last seven days.