Bitcoin (BTC) is facing a challenging period as it fails to break above the $72,000 mark, with several onchain metrics pointing to a decline in demand. This downturn is exacerbated by macroeconomic headwinds, including geopolitical tensions and policy uncertainties.
Investors Shift to Distribution
According to Glassnode, Bitcoin investors are increasingly risk-averse, leading to a distribution of BTC holdings. The Accumulation Trend Score (ATS) is near zero, indicating that whales and smaller investors are either distributing their holdings or not accumulating. This trend is reminiscent of early 2025, when Bitcoin dropped to $74,500 in April.
Whale Activity Reaches Multi-Year Lows
Data from Santiment shows that daily BTC transactions over $100,000 have fallen to the lowest levels since September 2023, while transfers exceeding $1 million dropped to levels last seen in October 2024. This decline is attributed to market participants waiting for clarity on the CLARITY Act and a resolution to the ongoing conflict between the US, Israel, and Iran.
Declining Network Activity and Hash Rate
CryptoQuant’s Bitcoin network activity index, which tracks key indicators such as daily active addresses, total transactions, and UTXO count, has been declining since August 2025. This decline signals weaker demand across the network. Additionally, Bitcoin’s hash rate has dropped by 22%, from 1.2 ZH/s to 813 EH/s, as rising energy costs and geopolitical tensions have forced miners to shut down operations.
Onchain Fundamentals Remain Weak
Bitcoin Vector’s fundamental index, which measures liquidity and network growth, remains well below the strengthening zone. This suggests that the current market stability is not supported by strong fundamentals. Analysts warn that without a recovery in these metrics, the chances of a sustained mid-term recovery are slim.
Miner Capitulation on the Horizon
Token Metrics analysts note that Bitcoin miners are losing $19,000 on every coin they produce, leading to a 7.8% drop in mining difficulty. If the difficulty drops another 5% within the next week, miner capitulation is likely to accelerate, intensifying spot sell pressure.
In conclusion, the current state of Bitcoin’s onchain metrics and network activity paints a picture of a market under pressure. While short-term rallies may occur, sustained recovery will require a turnaround in both investor sentiment and fundamental conditions.
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