Bitcoin Network Activity Hits 18-Month Low, but This Points to Looming Explosion: CryptoQuant

The Bitcoin network has recently experienced a slowdown in activity, but CryptoQuant believes this could precede a massive upsurge. The analytical platform revealed today that its proprietary Network Activity Index has dropped sharply to 3,470, marking one of the lowest levels recorded in the last 18 months. Bitcoin CryptoQuant Network Activity Index However, CryptoQuant emphasized that such periods of low network engagement have historically preceded major explosions. As a result, the platform suggested that this quiet phase might be the calm before a potential surge.Data Shows Bitcoin Network Activity is DownOne of the major findings from the report was the notable decline in retail investor interest. Specifically, on-chain transaction volumes between $0 and $10,000 have fallen by over 5%. This decline shows a drop in participation from small investors. Retail Investor Demand | CryptoQuant Adding to this subdued outlook, spot trading volumes on centralized exchanges have receded to levels last seen in October 2020. Notably, this represents a 4.5-year low and shows there is minimal movement of Bitcoin across both exchanges and on-chain channels. Bitcoin CEX Spot Trading Volume | CryptoQuant Interestingly, despite the ongoing demand from Bitcoin ETFs, which saw $386 million in net inflows yesterday, the CryptoQuant data indicates that there is a lack of organic interest in direct Bitcoin transactions.LTHs Remain Unfazed While Interest in Futures Trading Grows However, while short-term interest seems to be declining, long-term investor confidence remains strong. For one, CryptoQuant highlighted that about 847,200 BTC have recently transitioned into long-term holder supply. Bitcoin LTH Supply | CryptoQuant What this means is that these coins have remained dormant for over 155 days, suggesting that a large portion of investors are opting to hold their assets rather than engage in frequent trading. For perspective, the market witnessed behaviors like this during the accumulation phases observed in September and October 2024. Such a trend indicates strong conviction in future price growth among market participants.Now, while Bitcoin network activity is down, Ethereum’s futures market is showing a different trend. According to CryptoQuant, Open Interest has climbed to an all-time high of 7.17 million ETH. This spike suggests that while the spot market remains dormant, speculative interest, particularly in Ethereum, is growing. Ethereum Open Interest | CryptoQuant CryptoQuant also noted a surge in futures trading frequency among retail investors, with the frequency surpassing its one-year average. This could be signaling overcrowding in derivatives markets, as retail speculation in the futures market grows.https://twitter.com/cryptoquant_com/status/1932437449382269144Analysts Confident in Bitcoin Upside PotentialAmid these developments, Bitcoin continues its volatile movements. The asset recently peaked at $110,617 before facing a 1.19% drop, settling at $108,911. Despite this dip, Bitcoin remains 8.44% higher than its June 5 low of $100,430. Notably, analyst Henry recently confirmed that BTC is currently holding steady above $105,400. He pointed to a bullish flag pattern on the daily chart, suggesting that it is close to completion. According to him, a breakout above the upper trendline could send Bitcoin soaring to the $120,000 mark. In a separate analysis, Michael XBT, who previously predicted XRP’s seven-year symmetrical triangle breakout, identified a long-standing resistance on Bitcoin’s one-week chart. https://twitter.com/MichaelXBT/status/1932169291249672304He pointed out that Bitcoin is approaching the breakout point of an eight-year resistance line. Michael believes this breakout will be unlike any other, predicting it will trigger a FOMO-driven rally of unprecedented scale, likening the potential move to a digital gold rush. The Crypto Basic also discussed a recent analysis from Benjamin Cowen, founder of Into The Cryptoverse. Specifically, he highlighted that the 200-week Simple Moving Average (SMA) has historically served as a reliable indicator for market cycle tops. Cowen noted that when the 200W SMA reaches the previous cycle’s top, it often marks the current cycle’s peak. At present, Bitcoin trades at $108,911, while the 200W SMA is at $48,711. This considerable gap from the previous cycle’s high of $69,000 suggests Bitcoin still has much upside potential in this ongoing cycle.

Source: The Crypto Basic