Key Takeaways
The price of Bitcoin was almost at its all-time high, with a Z-Score of +1.5 standard deviations above average. Miners were restricting supply, and the Stock-to-Flow (S2F) ratio had increased by 75%. Additionally, the growth of Bitcoin addresses was on the rise. However, despite these factors suggesting a strong rally, the network activity of Bitcoin still lags behind its price, causing some uncertainty about the rally’s longevity.
As a researcher analyzing the cryptocurrency market, I found that Bitcoin (BTC) was maintaining proximity to its peak value. Interestingly, the BTC Z-Score stood at +1.5 standard deviations – indicating a robust position but falling short of the +2.5 standard deviations, which is often associated with an “overheating” or overvalued market state.
Naturally, this leaves room for further upside before momentum risks becoming stretched.
Despite a recent uptick, the Activity-Price Divergence (APD) persists at -1.5, indicating that the pace of price increases continues to exceed the level of on-chain activity.
The gap between price and network fundamentals has narrowed but not closed.
Are miners quietly supporting the market by reducing selling pressure?
It seems that miners are contributing significantly to the stability of Bitcoin’s price, as indicated by the Miners’ Position Index (MPI) being at -0.46 currently.
The data shows that the rate of miner withdrawals is continuing to be lower than the annual norm. Despite a 25.8% increase in the Mining Power Index over the last day, it continues to suggest cautious trading activity.
As an analyst, I might rephrase that statement as follows: During volatile times, a decrease in miner-driven supply can contribute to market stability by lessening the pressure on prices to fluctuate excessively.
Can Bitcoin’s scarcity narrative fuel further upside momentum?
Currently, as I’m typing this, the Stock-to-Flow (S2F) value has spiked to approximately 1.5923 million, representing a significant 75% rise. This surge underscores the allure of Bitcoin’s scarcity.
Historically, when the S2F ratio has been high, it’s typically occurred during bullish market phases, as a tighter supply of coins strengthened investor confidence.
Certainly, after the halving event, the reduction in new coin production could potentially boost demand due to scarcity, attracting both individual investors and financial institutions.
Will rising on-chain participation close the gap with price?
Over the past seven days, there has been an enhancement in on-chain activity. The number of new Bitcoin addresses has increased by approximately 25.47%, and the number of active addresses has risen by 11.11%. At the same time, the count of zero-balance addresses decreased by 2.69%, signifying an increase in wallets containing BTC.
This growth increases the number of users, improves trading activity, and makes the market more robust against volatility. If consistent, it may reduce the difference between the bid and ask prices, and bolster long-term price stability.
In summary, the power behind Bitcoin’s price continues to grow, with factors such as decreased miner disposals, an increased Stock-to-Flow ratio, and expanding on-chain involvement contributing significantly to this strength.
Yet, despite the network activity not keeping pace with the price, there remains an unclosed gap which needs to be addressed for continued growth.
If the essential factors keep getting stronger due to more active address usage and consistent supply patterns, the ongoing surge might sustain its pace.
Otherwise, the price may need to cool to realign with on-chain performance.
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2025-08-10 04:20