Bitcoin’s price surges to $97K, but network activity slows — Is it a cause for concern?

Bitcoin Hits $97K, But Bitcoin Network Activity Remains Weak — Should Investors Be Concerned?

Bitcoin network activity remains sluggish, even as Bitcoin [BTC] surged to a record high of $97,000. This growing gap between BTC’s price and actual blockchain usage is raising concerns among investors and analysts alike.

Key blockchain metrics such as active addresses and daily transactions haven’t kept up with BTC’s upward price movement. The number of active addresses has only crossed 1 million three times in the past few months. Currently, that number sits around 958,740, highlighting a clear disconnect between market price and real-time Bitcoin network activity.

So, what’s behind Bitcoin’s stagnant network performance?

Source : Glassnode

6 Reasons Behind Bitcoin’s Weak Network Activity

1. Institutional Inflows Drive Price, Not Actual Usage
Institutional investors, including MicroStrategy, BlackRock, and Metaplanet, continue to pour capital into Spot Bitcoin ETFs. Their involvement pushes prices higher, but it doesn’t reflect real blockchain interaction or decentralized use.

2. Limited Price Movement Reduces On-Chain Transactions
BTC has consolidated between $92K and $95K for weeks. With limited price movement, many holders choose to sit on their coins rather than transact, which reduces network activity.

3. Exchange Volume Inflation Misleads Market Perception
Some exchanges report artificially high volumes, creating an illusion of strong demand. However, this activity doesn’t translate to meaningful, on-chain transactions.

4. DeFi and Memecoin Activity Shifting to Other Networks
Ethereum, Solana, and Base now dominate the DeFi, staking, and memecoin sectors. With more activity happening on these networks, Bitcoin’s share of transaction volume has decreased.

5. Decline in Bitcoin’s Use as a Payment Method
Fewer users now rely on Bitcoin for everyday payments. Instead, they treat it more as a store of value, which reduces real-time transaction frequency and weakens its utility as a medium of exchange.

6. Layer 2 Solutions Shift Activity Away from Bitcoin’s Mainnet
The growth of solutions like the Lightning Network has moved many transactions off-chain, resulting in fewer direct transactions on Bitcoin’s mainnet.

What Does This Mean for Bitcoin’s Long-Term Viability?

Bitcoin’s price surge hasn’t led to an increase in network activity. While institutional involvement is growing, retail adoption has stagnated, and off-chain solutions like Layer 2 are drawing attention away from the mainnet.

As Bitcoin becomes more of a macro financial asset than a currency for daily use, the question remains: Can it maintain its growth without broader adoption?