Bitcoin’s price has surged to a record $112,000, marking a significant recovery from levels below $75,000. However, this rally stands in stark contrast to declining on-chain network activity and retail engagement, raising questions about its long-term sustainability driven primarily by institutional capital.
Key network metrics show stagnation despite the price increase. Active wallet counts remain low, and the Network Activity Index exhibits minimal growth. The mempool, which holds unconfirmed transactions, also indicates low congestion, pointing to reduced demand for on-chain transactions even as the price climbs.
Analysts suggest the current price surge is largely fueled by institutional inflows rather than organic growth stemming from increased retail participation or fundamental network usage. Supporting this view, Bitcoin balances on centralized exchanges have fallen below 2.9 million, potentially reflecting both ETF custody requirements and long-term holders moving assets off exchanges.
Historically, Bitcoin has averaged a 7.56% gain during the month of July. However, the persistently weak on-chain indicators, particularly the lack of retail activity, cast doubt on the organic strength typically associated with sustainable bull markets.