Bitcoin Network Activity Enters Bearish Phase Despite Stablecoin Market Cap Surge
Recent data from CryptoQuant shows Bitcoin’s Network Activity Index has dropped into a bear market zone, with active addresses and transaction growth stagnating since December. While Bitcoin recently reached as high as $97,000, on-chain activity has not kept pace, indicating that recent price rallies are driven mainly by institutional flows and Spot Bitcoin ETF investments, rather than organic network use. Key metrics like active addresses remain below 1 million, and practical usage as a payment network continues to fall, with some activity moving to second-layer solutions and other blockchains such as Ethereum, Solana, and Base. IntoTheBlock further reports that the combined market cap of all stablecoins has hit a new all-time high, suggesting significant liquidity available to potentially enter the crypto market and provide downside support for Bitcoin. At the time of reporting, Bitcoin trades near $93,800, down about 1% in the past week. Traders should closely monitor both Bitcoin’s on-chain activity and stablecoin flow, as historically, weak network demand has preceded corrections, though similar signals in the past have sometimes led to bullish reversals when accompanied by large capital inflows.
Bearish
The significant drop in Bitcoin’s on-chain activity, such as low active addresses and stalled transaction growth, is a classic bearish signal for crypto traders. This suggests that current price levels are being sustained mainly by institutional investment and stablecoin liquidity rather than organic network usage. While the record-high stablecoin market cap could provide a buffer and potential for future inflows, historical patterns indicate that diminished network demand typically limits Bitcoin’s rally potential and can precede price corrections. Unless on-chain activity picks up meaningfully, the risk of a short- to medium-term downside remains elevated, even as the surge in stablecoin supply could limit losses or set the stage for a later rebound.