Bitcoin Smashes $97K Record While Network Activity Flatlines—Time to Panic?

Bitcoin’s price just rocketed past $97,000—another all-time high that’ll have Wall Street bros crying into their spreadsheets. But here’s the twist: network activity is moving at the speed of a congested mempool.

Is this the calm before the storm, or just proof that price and utility don’t always hold hands? Traders are stacking sats while developers yawn—classic crypto dissonance.

Remember: markets can stay irrational longer than you can stay solvent. Especially when bankers ’accidentally’ short the top.

Source: CryptoQuant

At press time, Active Addresses hovered around 958.74K. This raises the question: Why is this happening?

According to Alphractal analysis, Bitcoin’s on-chain activity is struggling over 6 main reasons.

Six reasons behind Bitcoin’s stagnant on-chain activity

For starters, the current price is driven by external factors.

As such, the Bitcoin market and value are more influenced by capital inflows through Spot ETFs and institutional interest, and not by real blockchain usage. This is evidenced by the continued accumulation of MicroStrategy, Metaplanet, and BlackRock’s spot ETFs.

Secondly, BTC’s price volatility has been unusually low.

After weeks of consolidation between $92K and $95K, price action lacked the spark needed to trigger active wallet movement. In such conditions, many holders simply choose to wait.

Therefore, there are fewer incentives for investors to act, resulting in fewer on-chain transactions.

Thirdly, Bitcoin is experiencing artificial Exchange Volumes, where some Exchange Volumes are likely inflated. The inflated volume is creating a misleading sense of activity while real network usage stays modest.

Source: Alphractal

On top of that, usage has shifted elsewhere.

Other networks such as Ethereum [ETH], Solana [SOL], and Base are attracting DeFi, staking, and memecoin activity. Thus, speculative use is gradually moving to other chains where there’s high traffic.

For instance, the Solana chain has become dominant for memecoins, while Ethereum is staking. With usage moving to other chains, Bitcoin is struggling significantly.

Having said that, Bitcoin’s appeal as a practical payment network has also taken a backseat.

Thus, prices are growing faster than the network activity. Usually, this is unsustainable and prices might face a correction to meet the actual demand.

Finally, the adoption of second layers like Lightning Network is growing faster. With more transactions shifting off-chain, especially to Lightning, Mainnet activity appears lower.

This positions the crypto in a challenging situation where L2 is seeing more demand and usage. In conclusion, it’s essential to note that Bitcoin’s high price doesn’t necessarily mean increased blockchain usage.

Thus, we’re witnessing a shift where BTC is treated more like a financial asset, while on-chain dynamism is happening elsewhere.

What does this mean for BTC?

Ultimately, price alone doesn’t tell the full story. Bitcoin’s strong performance on the charts has not translated into increased network usage.

This shift suggests BTC is increasingly being treated as a macro financial asset—not as a decentralized currency built for everyday use.

Historically, network growth—especially from retail users—has played a crucial role in sustaining Bitcoin rallies. But now, with institutions dominating flows and retail largely on the sidelines, momentum may prove harder to maintain.

Unless on-chain demand picks up, BTC’s price growth could face structural limits.