Bitcoin network activity down 42% as analysts warn of deeper BTC pullback
Bitcoin network activity has fallen sharply since the 2021 cycle peak, with on-chain transaction participation down about 42% and new address creation down roughly 47%, according to Santiment. Despite price rallies, user growth and real usage lag, raising concerns about demand sustainability. CryptoQuant and GugaOnChain data show traders are sitting on roughly $27.89 billion in unrealized BTC losses (about a 23% drop), with self-custody holders and ETF investors notably affected — ETFs have lost around $8.5 billion since October. Analysts highlight key realized-price support levels: New Whales’ realized price at ~$88.7K has been breached, while Binance user deposit realized price (~$58.7K) and the overall realized price (~$54.7K) are cited as next potential support zones. Coin Bureau co-founder Nic Puckrin warns Bitcoin hasn’t hit a bear-market bottom and notes liquidity conditions are unfavorable for a structural rally; historically, bear lows align with the 200-week moving average (estimated between $55K–$58K). Traders should watch on-chain activity, unrealized losses, and realized-price support levels for signals of further downside or capitulation. Primary keywords: Bitcoin, BTC, on-chain activity, unrealized losses, realized price, support levels, liquidity.
Bearish
The article points to weakening fundamental on-chain metrics (transaction participation down ~42%, new addresses down ~47%) alongside large unrealized losses (~$27.9B) and breached realized-price levels. Those indicators suggest lower demand and elevated seller pressure, especially from recent self-custody buyers and ETF holders who have already recorded significant losses. Analysts flag critical realized-price support zones near $58.7K and $54.7K and reference the 200-week moving average (~$55K–$58K) as likely targets for a bear-market trough. Historically, drops in on-chain activity combined with large unrealized losses precede deeper corrections or extended consolidation (examples: 2018 bear market and 2022 drawdown where on-chain capitulation and falling activity accompanied multi-month declines). Liquidity conditions cited by analysts also reduce the odds of an immediate, robust rebound, increasing the probability of further downside or extended sideways action. Short-term implication: higher volatility and downside risk as traders test support and some participants liquidate or capitulate. Long-term implication: if on-chain activity and user growth don’t recover, price recoveries may be shallow and vulnerable to second-order corrections; a sustained bull market typically requires renewed real network usage and healthier on-chain metrics.