Bitcoin’s network activity is improving even as its price remains below its previous highs.
In 2024, the network activity moved in tandem with the price action as Bitcoin [BTC] moved toward the $100,000 zone. However, in 2025, this relationship began to diverge when the network activity plummeted rapidly.
The divergence suggests Bitcoin adoption continues strengthening beneath the surface, even as investors remain cautious about the price outlook. Recently, however, the trend has reversed.
The metric’s index rose from nearly 3.2k to nearly 3.8k as Bitcoin lost its upward momentum. That shift matters because growing usage is appearing before a major price recovery.
That said, caution is still warranted. According to CryptoQuant, most of the increases have been as a result of smaller transaction volumes compared to institutional inflows.
Fund demand weakens despite improving network activity
While there are indicators that network activity is recovering, fund demand continues to be headed in the exact opposite direction. Recently, the Fund Market Premium fell into negative territory as Bitcoin moved down toward $63.1k.
This indicates that institutions and investors are still unwilling to pay more than Net Asset Value (NAV) for exposure. Earlier in the cycle, the Premium was close to neutral while Bitcoin was trading above $100k.
However, fund demand gradually weakened, pushing the premium to approximately -6 during the recent selloff. Though the metric has recovered back up to approximately -0.6, it remains in negative territory.
Additionally, the 30 Day EMA is continuing to trend downward. This divergence implies that although adoption may be improving under the hood, stronger capital inflows are yet to provide support for a sustained recovery.
Despite improving network activity and reduced demand, the current dolphin accumulation adds an additional layer of caution. The addresses with balances from 100 to 1k BTC have been accumulating more Bitcoin over time than they did one year prior.
 However, the rate at which these balances are increasing is declining steadily. As a result of this decline, the net increase in dolphin (addresses holding between 100 and 1k) balances has dropped significantly since the beginning of the year.
Although dolphin balances continue to be positive, the loss of momentum within this segment of the market indicates that some level of investor confidence has waned.
Therefore, while there appears evidence of conviction among investors based upon continued positive net increases in dolphin balances relative to last year’s totals, the rates at which these increases have occurred indicate weakened conviction.
Final Summary
- Bitcoin network usage continues improving, yet weaker fund demand suggests adoption is still outpacing capital inflows.
- Dolphin Holdings remains above last year’s levels, though slowing accumulation points to weaker conviction.
