CryptoQuant analysts said the decline in activity in the Bitcoin network is due to a decline in investor interest. According to them, the number of active wallets and transactions is gradually falling and has almost reached a historical minimum.
According to their data, the rate of accumulation of the first cryptocurrency through spot ETF also decreased, moreover, small capital outflows were recorded. The amounts of unspent outgoing transactions ( UTXO ) are also decreasing - the scale of this decline is similar to the correction period in September 2023.
If this trend continues, investors will increasingly exit the first cryptocurrency, although a simple decrease in the number of UTXO is not sufficient evidence to confirm the end of the current cycle, as other indicators still point to a potentially bullish trend, analysts say.
In their opinion, the decline in investor interest has become the main problem for the market, and the previous growth of the asset was due to optimism around Donald Trump's victory in the elections and the creation of a strategic crypto reserve.
They believe that if this situation continues, another protracted phase of consolidation in the industry will begin, similar to the one that began in March 2024.
Indeed, there are no obvious catalysts for Bitcoin growth and none are expected in the near future, which explains the decline in network activity. This process is supported by the fairly high cost of Bitcoin, which is why its retail owners have included a hodling strategy.
