Despite surging more than $3,000 in the last two days, Bitcoin’s price trajectory is down on a more macro scale. CryptoQuant analysts argue that declining Bitcoin (BTC) network activity could lead to another price drop for the asset.
Bitcoin (BTC) stock market activity is falling
As we mentioned in the news of Kriptokoin.com, exactly six months ago, the leading cryptocurrency by market value, perhaps the first BTC released in the USA Fueled by the hype surrounding its futures ETF, it rose to an all-time high of around $70,000.
In the months that followed, Bitcoin slumped as excitement dissipated and other macro-political events took center stage, such as the US interest rate hike, rumors of the end of the Covid-19 pandemic, and the war between Russia and Ukraine. At one point, it fell more than 50% from its peak in just recent months.
BTC once again rallied at the end of March and approached $50,000, but at the beginning of April it was once again bearish and the asset fell below $40,000 weeks later.
Analysts from CryptoQuant believe there may be another reason behind these erratic price movements: Network activity. In a recent post, they explained the correlation between BTC’s price developments and the inflows/outputs from cryptocurrency exchanges.
Analysts mainly argue that declining network activity is linked to a rapid price drop, which is also confirmed by the chart below, and they say:
Historically, a large drop in address counts (entries and exits) , leading to a significant price correction for BTC.
Bitcoin Price and Network Activity / Source: CryptoQuant As the picture above shows, network activity has dropped to its lowest levels since the rally in late 2021.
Network fees dropped drastically
While falling network activity could create more problems for BTC’s upcoming price movements, there is at least one positive outcome, according to analysts. In other words, average transaction fees decreased to the lowest levels in about a year in parallel with the number of transactions.
Blockchain.com shows that average costs are currently around $1.4 and even dropped to $1.04 a few days ago. Just for reference, it hit an all-time high above $60 during the April 2021 bull run. During the price hike in November 2021, fees were around $3.
Bitcoin Transaction Fees / Source: Blockchain.com 
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