Bitcoin’s on-chain index has dropped near 2.4K, showing that fewer users are active on the network now.
The price of BTC stays above $60K even as fewer blocks and wallets show meaningful network action daily
ETF activity may be shifting demand away from blockchain use, which is now near its weakest point since 2021
The Bitcoin CryptoQuant Network Activity Index has dropped sharply, nearing a four-year low, according to recent data released on June 24. The index captures growth trends in Bitcoin’s on-chain activity using key network signals. These include active wallet addresses, daily transaction counts, total UTXOs in existence and the average bytes per block.
Source: X
CryptoQuant revealed that the index, which has tracked network behavior since 2011, is now at levels last seen in 2021. The reading coincides with a notable reduction in active participation across the Bitcoin blockchain. Bitcoin’s current price remains above $60,000, yet the declining network data highlights weakening user engagement.
Network Indicators Show Clear Signs of Weakness
The index’s components reflect shrinking activity across major usage metrics on the blockchain. Active addresses, which represent unique users making transactions, have seen a gradual decline throughout 2024. Meanwhile, daily transaction volumes have stagnated or fallen, failing to keep up with historical bull cycle levels.
Similarly, the number of UTXOs—unspent transaction outputs—is no longer increasing at previous rates. This metric is considered an indicator of long-term holder participation and organic demand. Fewer bytes per block also suggest reduced transaction complexity or compression of network usage over time.
All these data points feed into the CryptoQuant Network Activity Index, which has now dropped below the 2.4K mark. The fall has been visually captured on the latest chart, where the red “Network Activity Drawdown” area dominates the background.
Price Resilience vs. Network Drop-Off
Despite the concerning on-chain signals, Bitcoin’s price has held relatively steady over the past year. The price line (in white) on the CryptoQuant chart shows continued support near the $60,000 to $70,000 range. At the same time, the index’s moving average (purple line) has continued to trend upward until recently, diverging from the raw index value (blue).
This divergence between Bitcoin’s market price and its network activity could be seen as unsustainable by some analysts. If prices remain elevated while actual usage weakens, it may suggest market valuation is outpacing real adoption.
The index has tracked closely with price cycles since 2020, rising during periods of increased user activity and falling during cooling phases. This current phase appears to contradict the pattern, signaling a potential shift in the relationship between price and participation.
Is Bitcoin’s value being driven more by external market factors, such as ETFs, rather than by actual blockchain usage?
ETF Surge Correlated With On-Chain Decline
A notable trend observed by analysts is the timing of this network decline with the rise of institutional investment products. Spot Bitcoin ETFs began to gain traction early in 2024, attracting significant inflows from retail and institutional investors. While this added liquidity to markets, it may have reduced incentives for users to interact directly with the blockchain.
Traditional market access through ETFs bypasses the need for users to manage private keys or broadcast transactions. This could explain why network engagement has dipped while overall trading volumes remain high on centralized exchanges.
CryptoQuant data shows that Bitcoin’s price rise has continued despite these network-level headwinds. The platform warns that such a decoupling may not be sustainable in the long term without renewed blockchain activity. As the network activity index edges toward multi-year lows, analysts are watching closely for signs of reacceleration or further decline.
