Following Bitcoin’s (BTC) brutal sell-off on October 9, which saw the top cryptocurrency by market cap flash crash to $102,000 before recovering most of its losses, on-chain signals now show that there has been a noticeable decline in the Bitcoin network usage for most of 2025.
Bitcoin On-Chain Fundamentals Losing Strength?
According to a CryptoQant Quicktake post by contributor TeddyVision, Bitcoin’s Network Activity Index has been consistently trending below its 365-day moving average (MA) for most of 2025. The decline shows a structural slowdown in the Bitcoin network’s on-chain usage.
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For the uninitiated, the Bitcoin Network Activity Index measures how actively users are interacting on-chain – tracking metrics like transaction counts, active addresses, and transfer volumes. A rising index suggests growing organic usage and adoption, while a declining one indicates slowing network engagement.
To recall, the Bitcoin network activity surged ahead of price back in 2023-24. At the time, Bitcoin price witnessed organic expansion in price, primarily driven by genuine on-chain usage.
However, the trend has changed significantly in 2025. For the most part, this year saw Bitcoin liquidity circulating off-chain, while on-chain traffic has dwindled. As a result, the Network Activity Index has tumbled below the 365-day MA.
That said, BTC price has held between $100,000 to $120,000, creating a widening gap between the digital asset’s valuation and network fundamentals. The CryptoQuant analyst remarked:
Capital keeps rotating, but not expanding – most flows happen off-chain, through ETFs, custodians, and synthetic exposure, while genuine on-chain demand remains subdued.
TeddyVision stated that the recent capital rotation in the Bitcoin market is not indicative of its strength, but rather it is just “momentum running on fumes.” The analyst added that when the Bitcoin network usage stagnates while price keeps on increasing, valuations stop reflecting adoption and start tracking assumptions.
To conclude, although Bitcoin is not collapsing just yet, the fall in its network usage activity speaks volumes about its falling fundamentals. That said, all may not be over for BTC just yet.
In an X post, crypto analyst Titan of Crypto noted that the Bitcoin bull market is not over yet. The analyst stated that a Bitcoin bear market will only start if it loses the 50-day Simple Moving Average (SMA) on the weekly chart.
Q4 2025 Bullish For BTC?
While the recent flash crash to $102,000 may have spooked BTC bulls, several industry experts are still confident that the digital asset will continue to make new record highs in the last quarter of 2025.
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Crypto market expert Ash Crypto recently predicted that BTC is likely to hit as high as $180,000 in Q4 2025. Similarly, fresh data from Binance suggests that BTC could be on track to $130,000.
In the same vein, noted crypto analyst Egrag recently forecasted that BTC only needs a minor catalyst to surge to $175,000. At press time, BTC trades at $114,076, up 0.8% in the past 24 hours.
Featured image from Unsplash, charts from CryptoQuant, X, and TradingView.com
