Bitcoin Surges 6% to $100,000 Despite Low On-Chain Activity

Bitcoin's price has surged past the $100,000 mark, yet there is a noticeable disconnect between this valuation and the actual activity on the Bitcoin network. Despite Bitcoin being just 6% away from its all-time high of $111,700, transaction fees remain low, and the demand for block space is weak. This divergence suggests that the network is increasingly being used by large entities for significant value transfers, rather than for smaller, more frequent transactions.

Between January and September 2024, Bitcoin's on-chain activity peaked, with the volume of transactions increasing to about 675,000 per day, which nearly matched the rise in the price of Bitcoin from $20,000 to $95,000. As user involvement and price increased, the network was quite active. However, Bitcoin's daily transaction volume has drastically decreased after Q4 2024. Activity has narrowed to a range of 320,000 to 500,000 daily transactions by the middle of 2025. This pattern continues despite Bitcoin's price range reaching $100,000, indicating a decline in base-layer utilization demand. This suggests that Bitcoin's price strength is being driven more by off-chain markets than on-chain engagement.

Bitcoin’s futures market has also experienced a major structural shift. The dominance of crypto-margined open interest has diminished significantly since early 2023. Stablecoin-margined contracts now lead, showing a clear move toward more risk-managed trading setups. This shift shows how traders are choosing stability and liquidity in response to volatility. The derivatives market has developed, placing more of a focus on capital control and hedged exposure.

Meanwhile, Bitcoin’s transfer activity is shifting toward high-value transactions. In January 2023, transfers under $100K made up 34% of adjusted volume, mostly from small holders. But by May 2025, that number fell to just 11%, replaced by large institutional-sized movements. As Bitcoin's price pushed higher, large transfers began to dominate volume on-chain. This signals increased involvement from institutional players or high-net-worth investors. Small retail flows have become a minority presence in the transaction mix. Bitcoin’s current structure shows fewer users moving more capital, pointing to growing capital concentration. Network demand is no longer driven by scale but by size, and the implications for adoption and liquidity are still unfolding.

The decline in transaction counts is accompanied by a rise in settlement volume, pointing to increased usage by large entities. This trend is evident in the concentration of on-chain settlement volume in large-value transfers, suggesting that institutions are playing a more dominant role in the network. The rise in 'elite' wallets by 231 further supports this notion, as these wallets are likely controlled by institutional investors. The stabilization of open interest, combined with reduced liquidations, might act as a foundation for a new upward push in the near term. Historically, Bitcoin has responded positively to rate pauses, often resuming upward movement when signs of seller exhaustion appear. The dominance of long-side liquidations, with few short liquidations, reflects a flush-out of recent entrants attempting to ride the previous rally. This deleveraging phase could pave the way for a price rebound if macro conditions remain favorable.

The shift in market behavior is also evident in the growing whale activity on exchanges. The whale ratio metric on Binance has surged dramatically, indicating significant accumulation behavior among large holders. This shift marks a 400% increase and suggests that market participants are refraining from panic selling and instead are anticipating future price appreciation. Inflows to the platform have remained low, particularly from both whales and retail participants, suggesting that market participants are holding rather than exiting positions.