Bitcoin (BTC) has been trading within a narrow range for the past few weeks, failing to steady above the $100,000 mark since the beginning of the year. 

According to a crypto analyst, this price stagnation could be attributed to the significant decline in Bitcoin network activity. 

Bitcoin Sees Decline in Network Activity

In a recent report, pseudonymous CryptoQuant analyst Yonsei_Dent found that the decline in activity on the Bitcoin network is responsible for its price consolidation in recent weeks. 

Dent assessed Bitcoin’s active address count and found that a “death cross” has formed between its 30-day moving average (30DMA) and the 365-day moving average (365DMA), signaling a slowdown in market activity. 

This pattern suggests that short-term investor engagement is waning as the shorter-term trend (30DMA) dips below the longer-term trend (365DMA). This points to a decrease in trading and participation on the network over the near term.

“Historically, similar patterns in Active Addresses have often coincided with bearish market conditions, making this a potentially negative indicator,” he explained.

As expected, the decline in active address count on the Bitcoin network has impacted the daily transaction count on the Layer-1 blockchain. Per Dent’s report, “transaction count has been declining since Q4 2024, further reinforcing the likelihood of mid- to long-term market stagnation.”

BTC Price Prediction: Bullish Setup Could Trigger Price Surge Above $102,000

Since December 19, Bitcoin has faced resistance at $102,722 and found support at $91,431. An assessment of its moving average convergence divergence (MACD) hints at a potential break above the resistance in the near term. At press time, the coin’s MACD line (blue) rests above its signal line (orange).

This indicator measures an asset’s price trends and momentum and identifies its potential buy or sell signals. When it is set up this way, bullish momentum is strengthening. It suggests that buying pressure is increasing and that BTC’s price could surge. 

A succesful break above the $102,722 resistance level would propel BTC’s price toward its all-time high of $108,230. 

A failed attempt to breach this resistance could send it toward support at $91,431. If the bulls fail to defend this level, BTC’s price could drop to $86,531.