BTC network activity signals new bull phase

TLDR

Bitcoin network activity has surged to multi?year highs and one key on-chain index has flipped to a bull phase, but price and capital flows still look cautious.

1. CryptoQuants Network Activity Index for Bitcoin (BTC) has broken above its 365?day average, a level that previously preceded major rallies in 2024 and 2025.
2. Most of the new activity comes from tiny, protocol-driven microtransactions, while price, ETF assets and sentiment remain weak, so the signal is not a clean green light.
3. To judge whether a true bull phase is starting, it is worth watching whether usage stays high, fees and miner revenue rise, and large capital flows and dominance improve.

Deep Dive

1. What The Network Signal Shows

Analytics firm CryptoQuant reports that its Bitcoin Network Activity Index has moved above its 365?day moving average for the first time since December 2024, which it classifies as a bull phase trigger that previously preceded strong upside in 2024 and 2025. One recent analysis notes the index climbed from around 3,320 to roughly 3,600 while daily transactions exceeded 800,000, more than double 2025 lows.

Articles summarizing CryptoQuants data say network activity is now only about 7% below its all-time high from September 2024, with average transactions per block near record levels and long?term holders controlling over 4.3 million BTC, tightening liquid supply. This combination of high usage and heavy HODL?style ownership is why some analysts frame it as the start of a new bull regime.

2. How Bullish This Really Is

The bullish read is tempered by the composition of that activity. Multiple reports show that transactions below 0.01 BTC now make up roughly 80% of all daily transactions, up from about 44% in 2023, driven by Ordinals, Runes, BRC?20 and other OP_RETURN data inscriptions rather than large value transfers. CryptoQuants own breakdown calls this protocol?driven rather than deep economic flow.

At the same time, the broader market is still in drawdown. Total crypto market cap has fallen about 14.78% over the last 30 days, perpetual open interest is down around 26.64%, and a major sentiment gauge sits in Fear at 22. ETF AUM for BTC has dropped from 106.32 B to 82.78 B over the month, highlighting weaker institutional flows.

3. Key Things To Watch Next

Several on-chain and market variables can help validate or invalidate the new bull phase narrative:

1. Sustained high activity with rising fees and miner revenue. If busy blocks start to push meaningful fee growth, that suggests more genuine economic demand than just dust inscriptions.
2. Capital flows and positioning. Improving BTC ETF AUM, shrinking exchange reserves and continued absorption by long?term holders would align capital with the usage signal.
3. Price and dominance behavior. A recovery in BTCs share of total market value from around 58.5% and a move off multi?month lows while activity remains elevated would better fit prior bull?phase patterns.

Conclusion

Bitcoins blockchain is busier than it has been since 2024 and a key activity index has flipped into what on?chain analysts label a bull phase, even as price, ETF assets and sentiment remain weak. If this cycle rhymes with the past, sustained high activity, improving miner economics and stronger inflows could turn todays divergence into the foundation of the next bull leg, but until those pieces line up the signal is best viewed as an early, not decisive, regime shift.