Bitcoin (BTC) network activity has reached its lowest level in a year, bringing its fair value to between $48,000 and $95,000, according to CryptoQuant.
As of press time, Bitcoin was trading at roughly $96,500, making the flagship crypto overvalued from a network activity perspective based on CryptoQuant’s valuation model.
The Bitcoin Network Activity Index has declined 15% since its peak in November 2024. It is now at 3,760, the lowest level since February 2024.
A decline in the number of transactions primarily drives the decrease in activity. The total daily transaction count is currently 346,000, marking a 53% drop from the all-time high of 734,000 recorded in September 2024.
Runes down in popularity
The decline in network activity is largely driven by reduced use of the Runes protocol for token minting on Bitcoin. Runes relies on OP_RETURN codes to store token-related data, but the number of these codes used in transactions has dropped significantly.
In April 2024, daily OP RETURN codes reached 802,000. However, the number has since dropped to a 10,000 daily average in January.
In April 2024, daily OP_RETURN codes peaked at 802,000 but have since fallen to an average of 10,000 per day in January.
As of Feb. 4, Runes-related transactions totaled 6,110, accounting for about 2.5% of Bitcoin’s daily transaction volume, based on data from a Dune Analytics dashboard created by Crypto Koryo.
From Jan. 1 to Feb. 4, Bitcoin transfers made up 73.5% of daily network activity, significantly surpassing transactions related to Ordinals, BRC-20 tokens, and Runes.
This decline is also evident in Bitcoin’s mempool. Unconfirmed transactions have plummeted from 287,000 in December 2024 to just 3,000 — a 99% drop. The mempool last recorded such low activity in March 2022.
Despite signals that BTC may be overpriced, Bitfinex said in a recent report that Bitcoin remains resilient, even after the market shock caused by President Donald Trump’s tariff plans.
In January, BTC outperformed the broader crypto market by gaining 9.4%, while the wider market saw an average decline of 25.7%.
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