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The cryptocurrency market is currently experiencing a substantial decline, as both bitcoin” target=”_blank” rel=”nofollow”>bitcoin and ethereum have seen a substantial decline in active addresses. This trend, which has persisted throughout 2024, has caused apprehension about the future of these prominent cryptocurrencies. The implications for market dynamics could be profound as investor enthusiasm wanes.
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Active addresses in decline
According to the latest statistics from CryptoQuant, active bitcoin addresses have shrunk by approximately 1.17 million to 855,000, while ethereum” target=”_blank” rel=”nofollow”>ethereum has been reduced between 382,000 and 312,000. This equates to a 27% drop for bitcoin and an 18% drop for ethereum so far this year.
The absence of new investors Market entry appears to be the main cause of this decline. This is essential to maintain favorable momentum as existing players dominate trading activity in the absence of new capital inflows.
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Since early 2024, active bitcoin and ethereum addresses have been declining
“For bulls to dominate the market, the influx of new investors is a crucial condition.
1.bitcoin 1.17 million -> 855 000
2. ethereum 382K -> 312K” – By twitter.com/burak_kesmeci?ref_src=twsrc%5Etfw” rel=”nofollow”>@burak_kesmeci
Full publication https://t.co/gZftQidnxa pic.twitter.com/q5cdpv7x6t
– CryptoQuant.com (@cryptoquant_com) twitter.com/cryptoquant_com/status/1841129813249032347?ref_src=twsrc%5Etfw” rel=”nofollow”>October 1, 2024
The expected excitement around the approval of spot ETFs has not translated into increased activity on the blockchain. Still, the current user base has many investors who would have expected such developments. The Federal Reserve's continued quantitative tightening continues to remove liquidity from the market, adding more pressure to the situation.
Market sentiment and future prospects
However, there are signs that a possible recovery in the face of these challenges is approaching. For example, ethereum's funding rate has remained positive over the past week, meaning there is growing interest among investors in long positions. This implies that while declines in ethereum's price have continued, a good majority of the market remains optimistic about its performance in the future.
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btc and eth addresses decline: btc falls to 855K, eth to 312K in 2024
Since the beginning of 2024, the number of active bitcoin and ethereum addresses has continued to decline. bitcoin addresses fell from 1.17 million to 855,000, while ethereum addresses decreased from 382,000 to…
– CoinNess Global (@CoinnessGL) twitter.com/CoinnessGL/status/1841134283131363350?ref_src=twsrc%5Etfw” rel=”nofollow”>October 1, 2024
Interestingly enough, large ethereum holders have been accumulating their assets, rather than selling them. These large holders reduced their outflows from 311,950 to 139,390, suggesting that they are confident in the long-term prospects of the altcoin. Investors who take these types of actions usually hope that prices will recover soon.
Additionally, bitcoin multi-exchange flow has seen a substantial decline. This metric contrasts short-term entries and exits with those over a longer period, indicating that current trading activity is significantly lower than historical averages. A low FX multiple generally suggests that investors are holding their assets in anticipation of future price increases rather than actively trading them.
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bitcoin and ethereum: Broader Perspective
The broader bitcoin market is negotiating complicated terrain shaped by geopolitical concerns and legislative changes. Recent events have helped investors generally be more cautious. For example, even though market volatility caused ethereum to drop to around $2,390, bitcoin has managed to hold steady above $61,100.
Featured image from Vecteezy, TradingView chart
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