Bitcoin’s On-Chain Activity Declines

• Bitcoin’s on-chain activity slows as new address creation declines, signaling weaker network fundamentals.
• BTC supply in profit follows price trends; downtrends lead to lower profitability while uptrends signal recovery.
• The 90-day EMA net position change highlights market cycle shifts, reflecting profitability trends in Bitcoin’s network.

Ali_charts reports that the monthly average of new Bitcoin (BTC) addresses has dropped below the yearly average, indicating reduced on-chain activity. This trend points to weaker network fundamentals and lower utilization.

Bitcoin Supply in Profit Declines

Bitcoin’s supply in profit shows a distinct trend shift. The chart tracks BTC price movements, total supply in profit, and net position changes. The black line represents BTC price in USD, while the gray line shows total supply in profit. The histogram indicates the 90-day EMA net position change.

From April 2024, Bitcoin’s price surged, pushing the total supply in profit higher, while the net position change remained positive. However, by June 2024, a downtrend began; the price started declining, which also affected total supply in profit. The net position change turned negative, indicating reduced profitability.

Between July and September 2024, BTC prices continued to drop, leading to a decrease in total supply in profit and a deepening negative histogram. By October 2024, Bitcoin’s price began to recover, stabilizing total supply in profit; the net position change turned positive, indicating growth in profitability.

Market Cycles and Profitability Shifts

Bitcoin experienced a strong rally from November 2024, causing a significant price increase and a sharp rise in total supply in profit. The net position change remained positive, reflecting increased profitability. However, by January 2025, the BTC price peaked and then slightly pulled back. Despite this, total supply in profit stayed elevated but showed signs of stabilization, with the histogram narrowing, suggesting reduced positive momentum.

In February 2025, Bitcoin’s price fell again, negatively impacting total supply in profit. The net position change turned negative, indicating that more supply moved out of profit, signaling a new shaded downtrend on the chart and a shift in market dynamics.

The strong correlation between BTC price and total supply in profit persists; downtrends align with price drops while uptrends show rising profitability. The 90-day EMA net position change offers key insights into market cycles and profitability shifts within Bitcoin’s network.