Users, TVL & Transactions: Useful, But Not for Price Prediction There is a growing narrative that users, TVL, and transactions “drive” crypto prices. That interpretation is flawed. 👉 These metrics do not predict price. They describe participation. 🟢 Why: 🔹They follow incentives, not lead them In big networks (like BTC and ETH), on-chain growth can lead price when it creates sustained net demand. But most of the time, price (liquidity + positioning) leads, and users/TVL/tx follow via reflexivity and valuation effects. 🔹TVL is price-contaminated TVL rises when prices rise, even if real usage is unchanged. Leverage and looping exaggerate the signal. 🔹Transactions are structurally noisy MEV, bots, batching and fee mechanics ensure that on-chain activity explodes in both fear and greed, which is exactly why it’s a poor standalone signal for valuation 🔹Absolute levels are meaningless Big networks will always look “strong.” What matters is change, participation quality, and momentum, not size. ⚠️ Bottom line: Users, TVL and transactions regime indicators. They help us answer where we are, not where price goes next.