Bitcoin’s community exercise has been weakening for six straight months, however the decline isn’t exhibiting up within the headline metric many merchants watch first.
The clearer sign isn’t transaction quantity, which has held up, however participation breadth. Fewer distinctive addresses are energetic on the chain, even because the community continues to course of the same variety of transactions.
In a market the place value discovery is more and more taking place by means of exchange-traded funds and derivatives, that break up issues. It suggests Bitcoin’s on-chain footprint is narrowing even whereas market publicity stays energetic elsewhere.
The pattern has develop into more durable to disregard because the bear market has dragged on.
Glassnode information exhibits Bitcoin energetic addresses at about 778,680 on an eight-day common in mid-August 2025. As of Feb. 23, that determine had fallen to about 535,942, a drop of roughly 31%.
CryptoQuant has additionally flagged low community exercise for six consecutive months, describing the present stretch as an prolonged interval of weak spot in on-chain participation.
The final time the market noticed the same sample was in 2024, when Bitcoin later posted a correction of about 30%.
That doesn’t robotically suggest the identical final result now, nevertheless it reinforces the purpose that extended community softness has traditionally lined up with intervals of weaker market conviction.
Breadth is falling, however throughput isn’t
Bitcoin’s transaction depend has not fallen consistent with the variety of energetic addresses.
In mid-August 2025, transaction depend averaged about 444,000 per day. Knowledge from Blockchain.com exhibits the typical has been about 439,000 per day over the newest 30 days.
Nevertheless, each day prints have nonetheless been unstable, starting from roughly 289,000 to 702,000, however the broader throughput pattern has not collapsed.
That divergence is central to the story.
If transaction quantity is holding regular whereas energetic addresses are falling, it means fewer entities are accountable for a similar quantity of on-chain exercise.
That may occur for a number of causes, and none of them require a surge in retail exercise. Exchanges and custodians can batch withdrawals.
Bigger gamers can consolidate transfers. Institutional flows may be dealt with by means of fewer wallets. Operational exercise could cause bursts in transaction counts with out signaling a broader return of customers.
The result’s a series that also appears to be like busy at occasions, however with thinner participation beneath.
For this reason the decline in breadth is extra revealing than uncooked throughput. A flat transaction depend can masks a market the place exercise is more and more concentrated amongst repeat transactors, giant entities, and operational flows.
In that setup, Bitcoin’s chain stays useful and energetic, however much less consultant of broad person engagement.
Blockchain analytical agency Santiment has framed the backdrop in even starker phrases over an extended time horizon.
The agency stated that since February 2021, Bitcoin has seen 42% fewer distinctive addresses making transactions and 47% fewer new addresses created.
Santiment didn’t current that as proof that crypto is useless or {that a} multi-year bear market is locked in, nevertheless it did describe a bearish divergence that constructed by means of 2025, as market caps rose whereas Bitcoin’s utility metrics weakened.
That very same rigidity is now exhibiting up within the six-month pattern. Value and market narratives can keep alive whereas the chain itself turns into quieter.
Low charges level to skinny demand for blockspace
Charges reinforce the concept that Bitcoin is in a thin-demand regime on Layer 1.
Knowledge from mempool.house exhibits that the blockchain community’s latest common transaction charges have been round $0.24, or about 1.8 sats/vB.
These are low ranges for a community that, in prior cycle peaks, has seen sustained competitors for blockspace. On the present transaction tempo, that price degree implies beneath $100,000 per day in transaction price income for the community.
That continues to be small relative to the block subsidy, which continues to be about 450 BTC per day.
This isn’t an instantaneous safety downside, and it doesn’t imply Bitcoin’s safety mannequin is beneath near-term stress.
It is because the block subsidy continues to dominate miner income, nevertheless it does underline a longer-term actuality that Bitcoin has not been pressured to confront on this part of the cycle.
The transition towards a extra fee-supported safety funds, a subject that returns each cycle, isn’t being examined on this atmosphere as a result of price demand is weak.
In sensible phrases, right now’s quiet price market delays that debate.
The chain isn’t beneath strain from sustained congestion, and customers usually are not competing aggressively for inclusion. That may change shortly in a volatility occasion, a speculative wave, or a brand new demand shock, nevertheless it has not occurred but.
For now, blockspace appears to be like underused relative to prior bull phases, which inserts the broader image of decreased participation breadth.
CryptoQuant’s framing, that low community exercise is usually linked to low curiosity within the asset and intervals of broad losses, additionally suits this price atmosphere.
When curiosity falls, fewer new individuals arrive, fewer discretionary transfers occur, and price strain fades.
Bitcoin can nonetheless commerce actively as a monetary asset, however the chain itself not displays broad engagement.
Macro situations and ETF flows are altering how Bitcoin trades
The macro backdrop helps clarify why this pattern has endured.
Bitcoin is more and more buying and selling like a macro-sensitive, high-beta asset, particularly throughout risk-off intervals.
Over the previous yr, US inflation has cooled, with CPI at 2.4% yr over yr in January 2026, and the Federal Reserve’s goal vary has been cited at 3.50% to three.75% in late January.
In an easier market, cooling inflation may need supported a cleaner threat rebound.
As an alternative, markets have centered on volatility catalysts, together with tariff-policy uncertainty, which has pushed charges and the greenback round and saved broader threat urge for food unstable.
In that form of atmosphere, each retail and institutional buyers usually cut back churn. Retail participation falls. Merchants transfer much less usually. Establishments can keep engaged, however they’re extra more likely to alter publicity by means of merchandise that don’t require shifting cash on-chain.
That’s the place spot Bitcoin ETFs develop into central to the story.
Knowledge from Coinperps present multi-week web ETF outflows, together with about $3.8 billion over 5 weeks and about $4.5 billion in year-to-date outflows.
That shifts exercise away from self-custody wallets and towards brokerage accounts.
It additionally helps clarify why the market can stay energetic whereas the chain grows quieter. Publicity continues to be altering palms, however extra of that change is being expressed off-chain.
That may be a significant shift in Bitcoin’s function. It more and more appears to be like like a monetary product with an institutional wrapper, whereas Layer 1 is used extra selectively for settlement, storage, and periodic transfers.
On the identical time, each day transactional vitality throughout crypto is concentrating in different areas, particularly stablecoins.
Coin Metrics has highlighted stablecoins as a core driver of on-chain exercise, with a provide of practically $300 billion and rising transaction volumes.
If stablecoin rails on different chains are dealing with extra day-to-day settlement, Bitcoin’s Layer 1 naturally turns into narrower in perform.
That doesn’t, by itself, weaken Bitcoin’s funding thesis, nevertheless it does change its form.
Three situations for the subsequent three to 6 months
The present six-month decline in community breadth units up three believable paths for Bitcoin over the subsequent three to 6 months.
The primary is a continuation of apathy, which appears to be like like the bottom case in a risk-off tape.
In that situation, energetic addresses stay depressed, in a 450,000 to 600,000 vary, transaction counts keep uneven however don’t collapse, and charges stay low. ETF flows keep flat to unfavourable.
Right here, Bitcoin can nonetheless transfer sharply on macro headlines, however on-chain participation doesn’t verify a broad restoration. The asset trades like a macro instrument, not like a community getting into a contemporary enlargement part.
The second is a liquidity thaw, which is the extra constructive path.
If cooling inflation and easing expectations stabilize threat urge for food, ETF flows may shift from outflows to sustained inflows. In that atmosphere, energetic handle progress would develop into the important thing affirmation sign.
On this case, a rebound towards 650,000 to 800,000 energetic addresses would counsel that participation breadth is returning, not simply value momentum. That will look extra like a basic cycle restoration, with value beneficial properties supported by rising on-chain person engagement.
The third is the structural displacement situation, which can be crucial to observe.
In that situation, Bitcoin rallies, however on-chain breadth stays muted. ETFs, derivatives, and custodial settlement proceed to dominate, whereas stablecoins take in extra transactional demand elsewhere in crypto.
Right here, Bitcoin continues to carry out more and more as a digital macro asset and settlement layer, quite than as a series with broad, day-to-day retail exercise. T
That situation would sign an evolution in Bitcoin’s function, reflecting the way it has modified from what it was years in the past.