Bitcoin Price Hits $106,800 All-Time High Amid 28% Drop in Active Wallets

Bitcoin's price surged to an all-time high of $106,800 in mid-2025, marking a significant milestone for the cryptocurrency. However, this price surge was accompanied by a notable decline in active wallet addresses, which dropped by 28% to below 830,000. This decrease suggests a weaker retail presence during the price surge, indicating a disconnect between price action and user engagement.

Despite reaching new highs, Bitcoin's Network Activity Index also experienced a significant drop of 33%. This decline in network activity, which measures the overall usage and engagement on the Bitcoin network, suggests that the price surge may not be driven by organic demand or increased usage. Instead, it could be influenced by other factors such as institutional investment or market speculation.

Furthermore, mempool transactions, which represent the number of pending transactions on the Bitcoin network, have plummeted by 98% since 2022. This dramatic decrease in transaction volume suggests that users may be migrating to off-chain solutions or that there is a fading organic demand for Bitcoin transactions. This trend challenges the assumption that rising prices always reflect growing organic demand and highlights the structural changes occurring within the Bitcoin network.

The divergence between price action and user engagement became apparent in early 2024, as Bitcoin's price climbed from $45,000 to $75,000 and later broke $90,000. During this period, address activity began to bifurcate, with price highs being unaccompanied by corresponding user action. This trend continued into 2025, with active addresses falling from 950,000 to 830,000 as the price surpassed $106,000. The 14-day simple moving average (SMA) of active addresses forming lower lows indicates structural weakness in the network's user base, which is sharply contrasted by the historically strong price trend.

The Bitcoin Network Activity Index, which measures the overall usage and engagement on the Bitcoin network, fell from over 4,800 in early 2024 to below 3,200 by June 2025. This drop occurred despite Bitcoin's lofty values, supporting the idea of fragmented fundamentals. Between January 2023 and January 2024, the index grew alongside the price, indicating healthy utilization. However, the index has since formed lower highs, suggesting declining organic activity even as valuations remain bullish. The 365-day moving average of the index is now trending around 3,600—its lowest in over two years. Long-term usage metrics confirm that the recent drops are part of a broader weakening in core engagement.

The dramatic shift in mempool activity reveals that transaction volumes have collapsed nearly 98% since peak congestion in 2022. Back then, over 1 million transactions were pending daily, mainly in low-fee cohorts. As Bitcoin's price recovered past $60,000 into 2025, mempool volume dropped under 25,000 daily. The sharp decline, especially in high-fee activity, reflects either network optimization or user migration to off-chain solutions. This phase points to a structurally leaner Bitcoin network where price can surge without bottlenecks. However, it also challenges the assumption that rising prices always reflect growing organic demand.