Bitcoin Network Activity Improves, But Fund Demand Remains Weak

The Bitcoin network is showing signs of improvement, despite its price remaining below previous highs. According to CryptoQuant data, the network activity was once closely tied to price action, but began to diverge in 2025 when the network activity plummeted rapidly.

However, recent trends have reversed, with the metric's index rising from nearly 3.2k to nearly 3.8k as Bitcoin lost its upward momentum. This growing usage is appearing before a major price recovery, but caution is still warranted.

Most of the increases have been due to smaller transaction volumes compared to institutional inflows, and fund demand continues to be headed in the opposite direction. The Fund Market Premium fell into negative territory as Bitcoin moved down toward $63.1k, indicating that institutions are unwilling to pay more than Net Asset Value (NAV) for exposure.

The 30 Day EMA is trending downward, implying that although adoption may be improving under the hood, stronger capital inflows are yet to provide support for a sustained recovery. Additionally, the current dolphin accumulation adds an extra layer of caution, as addresses with balances between 100 and 1k BTC have been accumulating more Bitcoin over time than they did one year prior.