Hopefully these badly-structured sentences were somewhat helpful in shining some light on why the increase in the underlying value of a currency is derived from the assumptions/projections about the increase in economic activity, rather than the increase in trading activity (i.e. back and forth buying/selling BTCs for USDs). Unfortunately, the only way to increase economic activity in a market-driven economy is to increase consumption of products/services produced in that economy this is what I call the increase in spending. And when it comes to BTC-based economics, deflation is just a pretentious way of saying inflation.
If you're trying to relate Bitcoin deflation to the relative inflation of the Dollar against Bitcoin, then sure...... But that doesn't really make a meaningful point above and beyond saying that Bitcoin has deflated relative to the Dollar...
I'm not really sure where you're going with all of that. In terms of spending more in an economy, if the size of the market of goods being bought using the currency increases at a faster rate than the reduction in hording, then price deflation will occur even as the supply of currency being circulated is inflated... But that's completely relative... So again, I'm not really sure where you're going with all of this.
Oh... Now I see where our viewpoints diverge... When discussing inflation/deflation you are referring to the appreciation/depreciation of one currency against the other, whereas I'm referring to the appreciation/depreciation of a currency against the value of goods and services it is used to buy (as measured by the demand and supply of those goods and services, independent of any given currency). Thus, my argument about there not being a BTC-based deflation without the increase in BTC spending basically comes down to the notion that we can't say whether BTC is deflating or inflating unless it is being used to buy goods and services directly.