Bitcoin (BTC) has been trading within a narrow range for the past few weeks, failing to steady above the $100,000 mark since the beginning of the year. 

According to a crypto analyst, this price stagnation could be attributed to the significant decline in Bitcoin network activity. 

Bitcoin Sees Decline in Network Activity

In a recent report, pseudonymous CryptoQuant analyst Yonsei_Dent found that the decline in activity on the Bitcoin network is responsible for its price consolidation in recent weeks. 

Dent assessed Bitcoin’s active address count and found that a “death cross” has formed between its 30-day moving average (30DMA) and the 365-day moving average (365DMA), signaling a slowdown in market activity. 

This pattern suggests that short-term investor engagement is waning as the shorter-term trend (30DMA) dips below the longer-term trend (365DMA). This points to a decrease in trading and participation on the network over the near term.

“Historically, similar patterns in Active Addresses have often coincided with bearish market conditions, making this a potentially negative indicator,” he explained.

As expected, the decline in active address count on the Bitcoin network has impacted the daily transaction count on the Layer-1 blockchain. Per Dent’s report, “transaction count has been declining since Q4 2024, further reinforcing the likelihood of mid- to long-term market

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Author: Abiodun Oladokun