Bitcoin On-Chain Metrics Fall to Bear Market Levels Despite Price Near All-Time High

Summary: Despite Bitcoin hovering above $100,000 and nearing its record high of $111,700, recent data from Glassnode reveals that key on-chain metrics have dropped to levels typically seen during bear markets. The divergence raises concerns about the underlying health of the network and signals a shift in usage patterns among investors.

On-Chain Activity Declines Amid Price Surge

According to the latest insights from on-chain analytics firm Glassnode, Bitcoin’s daily on-chain activity has markedly declined, with transaction counts falling to between 320,000 and 500,000 — down from a 2024 peak of over 730,000. This subdued activity persists even as Bitcoin trades above the $100,000 threshold.

The drop is largely attributed to a reduction in non-monetary uses of the network such as Bitcoin Inscriptions and Runes, which previously inflated activity levels. Monetary transaction volume has remained stable, but the lack of retail-driven activity creates a notable deviation from historical bull market behavior, which typically sees a spike in both price and on-chain usage.

Institutional Dominance Evident in Transaction Volume

While the number of daily transactions is down, the value being transferred on-chain remains significant. Glassnode notes that average daily settled volume is around $7.5 billion, with spikes reaching $16 billion during the initial surge beyond $100,000 in late 2024. Notably, the average transaction size is over $36,000, illustrating a shift toward institutional and high-net-worth user activity.

Retail transactions — defined as transfers under $100,000 — have seen a dramatic decline in their share of total volume. Transactions below $1,000 now account for less than 1% of value moved on-chain, compared to about 4% earlier in the cycle.

Fee Revenue Drops as On-Chain Use Dwindles

The muted activity has significantly impacted miner fee revenue. According to Glassnode, average daily transaction fees collected by miners have fallen to roughly $558,000. While improvements like SegWit and batching contribute to increased efficiency, the overall decrease reflects lower block space demand.

Trading Shifts to Off-Chain Platforms

Meanwhile, off-chain trading activity has surged. Centralized exchanges are now handling over $10 billion in BTC spot volume daily. Futures markets also dominate, with average volumes near $57 billion and occasional peaks exceeding $120 billion. The options market adds another $2.4 billion in daily volume, underscoring a sharp move away from on-chain trading.

Price Update

At the time of writing, Bitcoin is trading at $103,470 — down 2% over the past 24 hours. Despite the decline, it remains within reach of its all-time high. However, the fallback in on-chain activity suggests that the current cycle is being driven more by institutional momentum than widespread retail adoption.

Featured image from Pexels, charts from Glassnode and TradingView