Colas also uses wallet growth as a proxy for interest, and said even small demand is a determinant for bitcoin prices. Wallets store the public and private keys which can be used to trade, or receive cryptocurrencies.
Growth in new wallets was roughly 2 percent in both April and May, and first-quarter compounded monthly wallet growth was 3.7 percent this year, Colas said. But for the last quarter of 2017 when bitcoin prices were nearing $20,000, wallet growth compounded monthly was 7.6 percent.
"The comparisons between the 2017 back half comps (excellent) and 2018-to-date (poor) are stark and explain essentially all of bitcoin's fall from grace this year," Colas said. "Simply put, history shows bitcoin wallet growth needs to be +5%/month to see meaningful price appreciation."
Bitcoin prices have dropped by roughly 50 percent this year, trading just below $7,500 Monday, according to CoinDesk. The world's first and largest cryptocurrency surged more than 1,300 percent last year, nearing $20,000 in December.
"This dog will have its day, but today isn't it," Colas said. "While we love the idea of bitcoin (and own a little ourselves), we are not fans of buying it at current levels."
Google searches for most other top cryptocurrencies has also cratered. For ethereum, the world's second largest cryptocurrency, searches are down 70 percent this year. XRP searches have fallen even more sharply, down 87 percent since January 1. Searches for the fourth largest digital currency, bitcoin cash are down 82 percent.
But for EOS, the fifth largest cryptocurrency by market cap, searches gone in the opposite direction. Google searches for that term have jumped 97 percent this year.
Much of that could be due to the company's recent fundraising efforts through what's known as an initial coin offering, or ICO. Start-up Block.one raised more than $4 billion through the cryptocurrency in a yearlong ICO that closed Friday.
Unlike an IPO, which gives investors stock ownership in a company, an ICO gives out tokens whose use case is based on a promise the platform will be useful in a digital network once it gets built.