Is falling Bitcoin network activity a warning or investment opportunity?

Key Points

• Bitcoin’s network activity has dropped, indicating a possible bear market, but increased institutional inflows could stabilize the situation.
• Despite a decrease in volatility and resistance at $98K, BTC’s potential growth is suggested by institutional confidence and whale activity.

Despite showing signs of a bearish trend, Bitcoin (BTC) might find stability through increased institutional inflows. The Network Activity Index for BTC has sharply declined since December 2024, indicating a decrease in transaction activity and daily active addresses. This pattern often emerges during bear markets or specific events, such as the 2021 China ban.

Institutional Confidence Could Stabilize BTC

While the market may appear weak, the surge in institutional confidence could help maintain stability for BTC in the long run. At the time of writing, Bitcoin was trading at $96,998.87, reflecting a 2.91% increase over the past 24 hours.

Bitcoin’s volatility has also decreased to 25.80%, its lowest level in the past thirty days. This period of low volatility could suggest that the market is experiencing a temporary calm before any significant price movements.

BTC Faces Resistance at $98K

BTC was testing key resistance at $98K, with Fibonacci retracement levels indicating critical price action. The 0.236 and 0.382 retracement levels at $95,656 and $96,347 are key areas of interest, while the 50% and 61.8% levels at $94,799 and $92,171 provide potential support zones.

A successful breakout above $98K would likely target the $100K mark, but failure to breach this level could lead to a pullback, making $90K and $92K the key support zones.

Strong Institutional Confidence in BTC

Bitcoin ETF inflows have been robust, with a total of $5.13 billion entering BTC ETF products over the last three weeks. These inflows signal strong institutional confidence in Bitcoin, even as retail activity slows.

Whale activity has surged recently, with institutional investors like BlackRock purchasing 280 BTC worth $37.8 million and Metaplanet adding 555 BTC. These purchases indicate that large holders are betting on Bitcoin’s future growth, and their actions could signal confidence in the asset, even amid uncertain market conditions.

Despite bear market signals, BTC’s price action, along with institutional inflows and whale activity, suggests potential growth. With low volatility, major resistance at $98K, and institutional confidence rising, BTC may be gearing up for another upward move.