The Bitcoin network activity index calculated by market analytics platform CryptoQuant is hovering around 3,760, the lowest since February 2024, indicating that activity on the leading blockchain has fallen by 15% since its all-time high in November 2024.

According to CryptoQuant's weekly report, the index measures the growth of key Bitcoin metrics such as block size, active addresses, and transaction count. This means that Bitcoin's decline in activity extends across almost every area of the network. Notably, the index fell below its 365-day moving average for the first time since July 2021, when China banned Bitcoin mining.

Bitcoin network activity is declining

An examination of various aspects of the Bitcoin network reveals a sharp decline in their activity. The number of active addresses and transactions has both fallen by double digits. Total daily transactions have fallen 53% from an all-time high of 734,000 in September 2024 to 346,000 today, the lowest since March 2024.

Similarly, the number of active Bitcoin addresses has fallen 20% from 1.14 million in November 2023 to 942,000 today, the lowest since October 2024.

Bitcoin miners are also feeling the pinch as overall transaction fees have fallen due to low network activity. Total daily transaction fees are $593,000, down from a local high of $4.7 million in late October 2024. Transaction fees now account for 1.8% of total Bitcoin miner revenue, indicating lower profitability for this group of market participants.

Additionally, the low network activity is also evident in the nearly empty Bitcoin mempool. The number of transactions waiting to be included in a block has fallen by 99% from 287,000 in December 2024 to 3,000 currently. CryptoQuant claims that the mempool has not been this empty since March 2022, during the last bear market.

In addition to the nearly empty mempool, the Bitcoin network has seen a collapse in the use of the Runes protocol. Runes was created to issue tokens on the Bitcoin network, and when the protocol launched in April 2024, the daily number of OP RETURN codes jumped to 802,000. However, today, this figure has dropped to 10,000, indicating that far fewer OP RETURN codes are being used in Bitcoin transactions.

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