Key Takeaways
Bitcoin’s on-chain activity dipped, and valuation signals flashed red, but miner stress remains manageable, setting the stage for BTC’s next move.
Bitcoin’s [BTC] quarterly Realized Volatility has dropped to 70%, approaching levels not seen since the September 2023 cycle bottom of 62%, which occurred at $26K.
The current downshift suggests that Bitcoin’s market activity has entered a consolidation phase. Historically, such low-volatility environments have often preceded major directional moves.
However, this cycle’s volatility peak of 143% is far lower than the 236% seen in 2021, suggesting a broader tempering of extremes.
At press time, Bitcoin traded at $118,922, posting a modest 0.59% daily gain.
Are THESE signs signaling fading interest?
Despite price stability, on-chain activity is fading.
As of press time, Transaction Count plunged to 188,000, while Network Growth dropped to just 72,100—both multi-week lows per Santiment.
The data reflects declining user participation and a cooldown in new wallet creation.
Naturally, such slumps tend to surface during sideways markets. But if prolonged, they often signal fading interest—unless reignited by a macro catalyst or demand shock.
An overheated Bitcoin market?
The Network Value to Transactions (NVT) Ratio has spiked to 412, its highest reading in recent months, which is often interpreted as a sign of potential market overvaluation.
This sharp rise implies that Bitcoin’s market capitalization is outpacing the volume of on-chain transactions, signaling reduced utility relative to value.
High NVT levels typically accompany price tops or slower growth phases.
That said, similar surges have also reversed quickly once network throughput rebounded, so this may yet be a short-term imbalance.
Has the Bitcoin scarcity narrative weakened?
Bitcoin’s Stock-to-Flow Ratio, a key scarcity metric, has collapsed by 71.43%, according to CryptoQuant. This sharp drop reflects a substantial change in the relationship between existing supply and new issuance.
This sharp drop challenges one of Bitcoin’s core long-term valuation models.
Although some argue the model has lost relevance in a post-halving environment, others interpret such dips as early-cycle accumulation zones.
Either way, this sharp decline puts the scarcity narrative under pressure, at least in the short term.
Is miner pressure mounting?
The Puell Multiple at 1.25 has declined by nearly 13%, reflecting miner revenue falling below historical norms.
This compression typically indicates a challenging environment for miners, especially when profitability dips below sustainable levels.
Importantly, the metric is still far above the 0.4–0.5 capitulation threshold, but continued weakness could lead to reduced miner-led selling.
Having said that, for now, it implies shrinking profitability without outright distress.
Could Bitcoin be setting the stage for its next big move?
Bitcoin’s volatility compression, paired with on-chain weakness and overvaluation signals, paints a mixed picture.
While network activity and profitability have softened, historical precedence suggests that such quiet phases often act as launchpads for major trend reversals.
If volatility remains compressed and fundamentals realign, Bitcoin could be gearing up for a breakout, just as it has in previous cycles.
