Calm Mempool and Steady Volume Might Signal Restricted Momentum for Bitcoin to Surpass $100K

Bitcoin is currently striving to surpass the important $95,000 to $96,000 range, but it is encountering considerable challenges due to a noticeably inactive on-chain landscape.

While prices are hovering near the pivotal $100,000 level, stagnant blockchain activity suggests specific weaknesses that might impede further advancements.

Recent data indicates that the daily volume of on-chain transfers is maintaining close to the $10 billion threshold, nearly matching its average over the past year. This highlights a lack of robust transactional interest.

Previous bullish trends were characterized by sharp rises in on-chain activity, yet the current environment shows minimal new transactions, effectively limiting the potential for upward movement.

Moreover, Bitcoin’s mempool, which reflects transaction backlog and network demand, remains shallow, typically holding only three to four blocks’ worth of pending transactions. This starkly contrasts with earlier periods of breakout activity, where the mempool significantly expanded due to increased transactional urgency.

Metrics related to active addresses support the view of stagnant on-chain activity and transaction numbers. Over the past month, the daily count of active addresses averaged around 930,000, with recent dips nearing multi-month lows below 800,000, diverging from the energetic engagement commonly seen in bullish markets.

In the absence of new or returning user interactions, Bitcoin increasingly relies on existing holders to bolster the market. This reliance often leads to reduced buying pressure, especially at major resistance points where older holders may be inclined to take profits.

Bitcoin’s velocity, which measures how quickly coins change hands, seems to amplify these challenges. Current data shows that velocity is static at approximately 13.0, indicating that transactions within the Bitcoin network are occurring at a slower pace.

Additionally, the sentiment among investors does not provide much reassurance. While about 400,000 BTC transitioned to long-term holder status recently, suggesting a tighter supply, this development can be twofold. Historically, a significant influx into long-term holding usually correlates with periods of market stagnation rather than explosive growth, as investors prepare for extended sideways moves.

Moreover, the cost basis for short-term holders stands at $93,500, closely aligning with the current market price, which adds both psychological and technical pressure. This proximity heightens the risk of establishing a lower-high scenario on weekly charts, particularly if buying support fails to emerge decisively in the near term.

Exchange inflow data provides further caution, with an average of about 32,700 BTC flowing into exchanges daily over the past month. These statistics reflect a neutral market rather than panic selling or aggressive accumulation.

This neutral sentiment is unlikely to generate enough momentum to push Bitcoin through resistance points around $100,000, where about 15% of the circulating supply remains at unrealized losses, set to be liquidated at break-even prices.

Periods of low activity have historically led to market frustration, often resulting in abrupt downward corrections or prolonged price stagnation, both of which can be disheartening for optimistic investors eager for quick gains.

Bitcoin may break free from this stagnation if there is a simultaneous increase in transfer volume, ETF turnover, and the number of active addresses. An uptick in velocity and mempool depth, along with heightened movement in the derivatives market, would likely foster greater confidence.

Activity in derivatives has fluctuated sharply over the past month, indicating volatile speculative interest, yet it wasn’t sufficient to keep BTC above $95,000. Without a combination of these favorable signals, the probability increases that Bitcoin may form a lower-high pattern on the weekly chart, potentially retreating to levels as low as $86,000.

The current lack of transaction activity poses a significant barrier to Bitcoin’s short-term prospects for upward movement. Unless there is a resumption of substantial on-chain activity, the market’s hopes of consistently exceeding and maintaining a price above $100,000 may remain unattainable in the immediate future.