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The Bitcoin (BTC) community activity has fallen to its lowest level in a year, with its fair value estimated to be between $48,000 and $95,000, according to CryptoQuant.
At the time of writing, Bitcoin was trading at approximately $96,500, indicating that the leading cryptocurrency is overvalued from a community activity standpoint based on CryptoQuant’s valuation model.
The Bitcoin Network Activity Index has decreased by 15% since its peak in November 2024. It currently stands at 3,760, the lowest level since February 2024.
A reduction in the number of transactions primarily contributes to the decline in activity. The total daily transaction count is currently 346,000, representing a 53% decrease from the all-time high of 734,000 recorded in September 2024.
Runes decline in popularity
The drop in network activity is largely attributed to the reduced utilization of the Runes protocol for token minting on Bitcoin. Runes utilizes OP_RETURN codes to store token-related information, but the number of these codes used in transactions has significantly decreased.
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In April 2024, daily OP_RETURN codes reached 802,000. However, this figure has since fallen to an average of 10,000 per day in January.
In April 2024, daily OP_RETURN codes peaked at 802,000 but have since declined to an average of 10,000 per day in January.
As of February 4, Runes-related transactions totaled 6,110, accounting for approximately 2.5% of Bitcoin’s daily transaction volume, based on data from a Dune Analytics dashboard created by Crypto Koryo.
From January 1 to February 4, Bitcoin transfers constituted 73.5% of daily network activity, significantly exceeding transactions related to Ordinals, BRC-20 tokens, and Runes.
This decline is also reflected in Bitcoin’s mempool. Unconfirmed transactions have dropped from 287,000 in December 2024 to just 3,000 — a 99% decrease. The mempool last recorded such low activity in March 2022.
Despite indications that BTC may be overpriced, Bitfinex noted in a recent report that Bitcoin remains resilient, even following the market shock caused by President Donald Trump’s tariff proposals.
In January, BTC outperformed the broader cryptocurrency market by gaining 9.4%, while the overall market experienced an average decline of 25.7%.
The post Analyst sets $95,000 ceiling for Bitcoin fair value amid declining network activity appeared first on CryptoSlate.
