Why Bitcoin's Rally Could Be Frozen
Date: 2025-10-07 Author: Oliver Abernathy Categories: CRYPTO PAYMENTS
Despite Bitcoin's recent breakout to $125,708, analysts warn that speculation, rather than fundamental reasons, may be behind this rise. In a CryptoQuant report, an expert pseudonymous as CryptoOnchain highlighted a worrying sign: declining network activity amidst a rising price. According to his data, the average number of active addresses over the past two weeks has reached its lowest level since spring 2020, indicating possible weakness in the current bullish trend.
Usually, a sustained rise in the price of a cryptocurrency is accompanied by an increase in the number of network participants, indicating an influx of new users and organic demand. However, in the current situation, the opposite is happening: the price is rising, but activity is falling. The analyst suggests that the cause may lie in derivatives market speculation, leverage, and the influence of large investors, rather than mass interest.
Further confirmation of potential instability comes from Coinglass data: open interest in BTC futures has increased by 10% since the beginning of October, reaching $92.14 billion—the highest since the beginning of the year. Historically, such surges in open interest during price increases indicate an overheated market. With excessively large, highly leveraged positions, even small liquidations can trigger avalanche-like corrections and quickly depress the price.
CryptoOnchain notes that if network activity continues to decline, Bitcoin could fall to $120,000. He emphasizes that without an increase in real demand and user engagement, the BTC price remains vulnerable. Unless fundamental support strengthens, the current rally risks ending in a short-term correction.
However, this scenario could change if network activity returns. The influx of new participants and increased transactions could spark new growth and a retest of historical highs.
Thus, the Bitcoin market finds itself at a crossroads: on the one hand, record prices inspire optimism, while on the other, weak network dynamics and growing futures positions highlight the fragility of the uptrend. The fate of BTC's future movement will depend on whether the market can transition from speculative demand to genuine interest from users and investors.
