On-Chain Activity Drops to 2018 Bear Market Levels, Has Bitcoin Found Its Floor?

According to data from Woofun AI, a sharp decline in Bitcoin network activity is raising questions about a potential market turning point. Current metric patterns closely resemble the backdrop of the 2018-2019 bear market, but the divergence between price and on-chain data suggests the bottom has not yet been confirmed.

On July 19, the 30-day moving average of active addresses fell to 609,688, before slightly recovering to 621,957 on July 27. It is important to clarify that active addresses are defined as unique addresses that send or receive Bitcoin daily. This figure is influenced by individuals, companies, or institutions controlling multiple addresses and does not directly equate to user count. Woofun AI's compiled data shows that the moving average, by filtering out short-term volatility, better reflects the overall trend of network activity and is therefore a key reference for assessing actual usage. The current data closely mirrors historical major downturns, revealing the typical shrinkage of network scale during periods of low market participation.

Historical comparisons offer a significant warning. In July 2018, the 30-day average of active addresses dropped to 570,710, while the 100-day average in January 2019 was 605,433. Notably, when Bitcoin hit its cycle low of $3,206 on December 14, 2018, network activity did not bottom out simultaneously. The 30-day average had already bottomed 166 days earlier, while the 100-day average bottomed 44 days later.

Another factor worth noting in the current market is that Bitcoin recorded a local low of $58,535 on June 30, while the two moving averages took 19 and 27 days, respectively, to reach their lowest values. This time lag indicates that the number of active addresses alone cannot prove a market bottom or predict the timing of a rebound.

The latest trend shows network participation is recovering. Since the low point, as of August 8, the 30-day moving average has risen to 664,764, and the 100-day moving average has recovered to 640,603. Meanwhile, the Bitcoin price remains above its June low, suggesting that, as the market gradually stabilizes, on-chain activity and price performance are showing signs of repair. This could indicate accumulating momentum for a new cycle.