Bitcoin's activity index falls to $3.7K

Bitcoin (CRYPTO:BTC) network activity has declined significantly, reaching its lowest level in a year, according to CryptoQuant data.

The Bitcoin Network Activity Index has fallen 15% since its peak in November 2024, currently sitting at 3,760, the lowest since February 2024.

The decline encompasses various aspects of the Bitcoin network, including a decrease in active addresses, transactions, and transaction fees.

The total number of daily transactions has dropped 53% from a high of 734,000 in September 2024 to 346,000.

Similarly, active addresses have fallen 20% from 1.14 million in November 2023 to 942,000, the lowest since October 2024.

Transaction fees for Bitcoin miners have also decreased due to the reduced network activity.

Daily transaction fees are now at $593,000, a considerable decrease from late October 2024 when they peaked at $4.7 million.

Fees now constitute only 1.8% of Bitcoin miners' total revenue, indicating lower profitability.

A significant factor contributing to the decline in network activity is the decreased use of the Runes protocol, which is used for minting tokens on the Bitcoin network.

Since April 2024, the daily number of OP RETURN codes, utilised by the Runes protocol, has plummeted from 802,000 to just 10,000.

The Bitcoin mempool, which holds unconfirmed transactions, reflects this slowdown, with transactions dropping 99% from 287,000 in December 2024 to only 3,000.

At the time of reporting, the Bitcoin (BTC) price was $96,222.08.