The activity of the Bitcoin network fell to its lowest level in one year, marking a significant change in the performance of the flagship cryptocurrency. Cryptoquant, a leading data analysis company, estimates that this slowdown weighs the fair value of Bitcoin in the range of $ 48,000 to $ 95,000. At the time of the press, Bitcoin exchanged hands at around $ 96,500, which indicates that it can be overvalued according to the activity of the network.
The activity index of the Bitcoin network, a measurement of the transactional volume on the network, experienced a decrease of 15% since its peak in November 2024, now to 3,760. It is the lowest that the index has been since February 2024. The decrease is widely assigned to a drop in transactions, the total number of daily transactions to 346,000. This is a decrease of 53% compared to the summit of 734,000 transactions recorded in September 2024.
An important contributor to this slowdown is the reduced use of the Runes protocol for the laying of tokens on the Bitcoin blockchain. Runes uses op_return codes to store tokens related. However, the use of these codes has experienced a significant drop. In April 2024, the daily codes OP_Preturn reached 802,000, but in January, the average decreased to only 10,000 per day.
Dune Analytics data show that on February 4, transactions linked to runes amounted to 6,110 years, representing approximately 2.5% of the daily Bitcoin transaction volume. From January 1 to February 4, Bitcoin transfers represented 73.5% of the activity of the daily network, exceeding transactions linked to ordinal, BRC-20 tokens and runes.
This drop is also reflected in Bitcoin Mempool, where unconfirmed transactions increased from 287,000 in December 2024 to only 3,000, a drop of 99%. Mempool noted so low activity levels in March 2022 for the last time.
Despite these indicators suggesting an overvaluation of Bitcoin, Bitfinex recently published a report indicating that Bitcoin remains robust, even following market shocks such as President Donald Trump’s pricing plan. In January, Bitcoin surpassed the wider market of cryptocurrencies with a gain of 9.4%, while the wider market experienced an average drop of 25.7%.
Although the activity of the Bitcoin network can appear concerning, it is crucial to remember that the cryptocurrency market is very volatile and influenced by a myriad of factors. As always, investors are encouraged to do in -depth research and to be cautious during negotiations.
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