Bitcoin network activity has fallen to an eight-year low, but the price has barely reacted.
According to CryptoQuant, the number of active BTC addresses on April 8 dropped to its lowest level since 2016. Meanwhile, a fresh estimate from Glassnode shows 661,313 active addresses in a day. When you compare this to a price of around $78K, it creates a rather strange picture that breaks with the usual market logic.
It used to be believed that weak network activity meant a weak market. But now this connection no longer works so directly.
The fact is, more and more bitcoin transactions are happening outside the main network. A significant portion of demand simply does not show up on-chain.
For example, the BlackRock IBIT fund provides access to BTC through exchange-traded funds, and CME futures are settled in cash. In both cases, investors gain exposure to bitcoin but do not use wallets, do not create addresses, and are not included in on-chain metrics.
As a result, price formation is increasingly happening not in the network itself, but in ETF order books and futures markets.
This is why there is a gap on the charts. On one hand, there is market sentiment; on the other, bitcoin has effectively gained a second market structure on top of the classic one.
What Is Happening With Market Participants
On-chain data confirms one important thing. Retail investors have noticeably cooled off and no longer play a key role.
The Accumulation Trend Score index from Glassnode is now at 0. This means either distribution or no accumulation. As of April 1, analysts noted that demand remains significantly below levels usually seen at market bottoms.
By April 8, the wording had become even harsher. There was talk of weak activity, lack of confidence among participants, and declining interest in both spot and derivatives. All this looks more like a cautious market without a clear sentiment.
At the same time, the volume of illiquid BTC supply, according to Glassnode as of April 16, reached 13.45 million coins. This is the majority of supply held by holders not inclined to sell. Combined with low address activity, this points to a market where fewer and fewer coins are actually trading.
A completely different signal is needed for new strong demand to appear. If coins are not moving, this rather indicates tight supply than weakness.
According to Glassnode as of April 13, interest from ETF remains stable, even despite on-chain cooling. The price of BTC during this period rose by 51.7%, and open interest in futures increased by 7.2%.
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CoinShares also reports an inflow of $1.1B into digital investment products for the same week, of which $871M went to bitcoin. This is the best result since early January.
At the same time, trading volumes at $21B are still noticeably below the average since the beginning of the year, which is $31B. This is typical of a narrow market where money is coming in, but broad participant activity is not happening.
Who Is Supporting the Price Now
According to Glassnode as of April 15, spot buying on Binance is outpacing Coinbase. This complicates the popular narrative that the market is completely under the control of US institutions.
Usually, Coinbase is seen as an indicator of US flows, including institutions and retail, while Binance reflects offshore demand. When Binance leads and Coinbase lags, this suggests not a single growth driver, but a mix of different participants. Individual institutional investors, offshore buyers, and traders working through derivatives remain in the game.
Meanwhile, banks continue to prepare infrastructure for entering the market. On April 14, Goldman Sachs filed an application for its first Bitcoin ETF. Previously, in January, Morgan Stanley filed applications for ETFs related to Bitcoin and Solana. In essence, these are channels through which capital can enter BTC without on-chain involvement.
Derivative market activity is also growing. By April 10, open interest in CME futures reached 23,827 contracts with a notional value of $8.77B. For comparison, on April 1 it was 21,180 contracts and $7.24B.
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At the same time, ETF data does not give a clear signal. As of April 16, IBIT received an inflow of 1,088.13 BTC, MSBT added another 177.76 BTC. But FBTC lost 478.92 BTC, GBTC — 317.49 BTC, and smaller funds also showed outflows.
As a result, the picture is mixed. There are enough purchases to offset sales, but still not enough for a steady inflow, which usually signals strong market confidence.
Putting it all together, you can see how the market is currently structured. Retail investors are almost inactive, as confirmed by the low number of addresses and lack of accumulation. Institutional demand exists, but it is spotty and uneven. Banks are only building infrastructure for future capital inflows. Offshore buyers still play a significant role, especially through Binance. Derivatives traders are gradually returning, as seen in rising open interest. At the same time, a significant portion of supply remains in the hands of long-term holders who are in no hurry to sell, but this does not mean new demand is emerging.
OTC Demand Becomes the Missing Link
If current spotty institutional activity is just the beginning of a larger market reversal, everything will depend on several key factors going forward. First and foremost, inflows into ETF need to become stable, not episodic.
Open interest on CME should continue to grow, and activity on Coinbase should catch up and at least approach the level of Binance, where offshore demand is now concentrated.
At the same time, on-chain activity should also start to revive. If institutional demand can stabilize the price, this may gradually bring retail participants back to the market.
Glassnode highlights two key levels. The first is $78.1K, the so-called True Market Mean. The second is $81.6K, the average entry price of short-term holders. A confident hold above these marks will signal that current demand is sufficient not only to maintain the price, but also to attract new capital.
In this scenario, the base forecast from Citi at $112K within a year looks quite realistic. And a bullish scenario with a target of $165K is possible if investor demand really starts to expand.
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The macro backdrop could also speed up this process. Federal Reserve representative Christopher Waller said that a quick resolution to the Middle East conflict could preserve the chances for rate cuts later this year.
Goldman Sachs, Morgan Stanley and Bank of America still expect two rate cuts starting in September.
If energy prices remain under control and the Fed starts cutting rates earlier than the market expects, liquidity conditions will noticeably improve.
In this case, bitcoin, as an asset sensitive to liquidity and rate expectations, may receive additional support and continue to grow.
Narrow Demand Amid Macro Pressure
There is also a tougher interpretation of what is happening. The market is now being held not by a broad base of participants, but by targeted capital flows.
In this configuration, everything is quite fragile. ETF inflows could reverse, offshore buyers could reduce activity, and derivatives traders could quickly change direction.
Glassnode in its April 15 report directly calls the current recovery unstable and dependent on flows, not on strong demand. If the macroeconomic situation remains tight longer than expected, as, for example, Deutsche Bank forecasts, expecting Fed rates to remain unchanged until 2026, such growth will lack fundamental support.
The first support zone Glassnode sees in the range of $69,000 — $71,500. This range is largely formed by positioning in the options market. Below is the level around $54K. This is the so-called Realized Price, the average purchase price of the entire BTC supply. In the event of serious pressure, the market could go there.
The Citi forecast in a recession scenario, where BTC drops to $58K, actually falls into this same range and sets the lower boundary for the year.
If You Break Down the Possible Scenarios, the Picture Looks Like This
If OTC demand starts to expand, ETF inflows become stable, open interest on CME continues to grow, Coinbase catches up with Binance in activity, and on-chain metrics begin to recover, then the market will have a foundation for stronger growth. In this case, the key benchmarks remain $78.1K and $81.6K.
If the current situation continues but without strengthening, the market may simply get stuck in a sideways range. In this scenario, ETF inflows will remain mixed, Binance will continue to dominate, and on-chain activity will remain weak.
If spot support starts to collapse, for example through ETF outflows, worsening macro conditions, and weakening spot demand, the first pressure zone will be the $69,000 — $71,500 range.
And in the case of a deeper correction, against the backdrop of a general flight from risk, the market could fall to the $58,000 — $54,000 area, which now looks like the extreme negative scenario.
The problem with such a market is its structure. When the main activity is concentrated off-chain and supported by a limited circle of participants, it becomes much more sensitive to changes in sentiment and capital flows.
A high share of illiquid supply means coins are in no hurry to hit the market. But at the same time, low address activity means there are few new participants. As a result, price support may be much narrower than it appears at first glance.
The Question That Remains Open
Active addresses are now at an eight-year low, while the price is holding around $78,000. This looks like a market that has already shifted to OTC platforms, but has not fully realized it yet.
The base layer of Bitcoin continues to exist, but price formation is increasingly shifting beyond it.
The key signals to watch are quite clear. Will on-chain activity recover along with price growth? Will Coinbase catch up with Binance in spot demand? Will inflows become stable? And will open interest on CME continue to rise?
If these factors start moving in the same direction, the current model will gain stability. If they diverge, it will become increasingly difficult to support the market solely with spot flows.
