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The cryptocurrency market is currently experiencing a substantial decline, as Bitcoin and Ethereum have both seen a substantial decrease in active addresses. This trend, which continued throughout 2024, has raised apprehensions about the future of these flagship cryptocurrencies. The implications for market dynamics could be profound as investor enthusiasm wanes.
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Refusal of active addresses
According to the latest statistics from CryptoQuant, Bitcoin’s active addresses decreased by approximately 1.17 million to 855,000, while Ethereum decreased by approximately 382,000 to 312,000. This equates to a drop of 27%. for Bitcoin and 18% for Ethereum since the start of the year.
The lack of new investors entering the market appears to be the main cause of this decline. This is essential to maintain favorable dynamics, as existing participants dominate trading activity in the absence of new capital inflows.
Since the start of 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 1.17M -> 855K
2. Ethereum 382K -> 312K” – By @burak_kesmeciFull article 👇 pic.twitter.com/q5cdpv7x6t
– CryptoQuant.com (@cryptoquant_com) October 1, 2024
The expected enthusiasm around the approval of spot ETFs has not translated into increased activity on the blockchain. Nonetheless, the current user base has many investors who would have expected such developments. The Federal Reserve’s continued quantitative tightening continues to starve the market of liquidity, adding even more pressure to the situation.
Market Sentiment and Future Outlook
However, there are indications that a potential rebound is near in the face of these challenges. For example, the funding rate on Ethereum remained positive last week, meaning investors are increasingly interested in long positions. This implies that even though the price of Ethereum continues to fall, a good majority of the market remains optimistic about its future performance.
BTC and ETH addresses decrease: BTC falls to 855K, ETH to 312K in 2024
Since the start of 2024, the number of active Bitcoin and Ethereum addresses has continued to decline. Bitcoin addresses increased from 1.17 million to 855,000, while Ethereum addresses increased from 382,000 to…
– CoinNess Global (@CoinnessGL) October 1, 2024
Quite interestingly, large Ethereum holders are accumulating their assets rather than selling them. These large holders reduced their outflows from 311,950 to 139,390, suggesting they have confidence in the altcoin’s long-term prospects. Investors who make this type of action generally expect a rapid price recovery.
Additionally, Bitcoin’s Exchange Flow Multiple has seen a substantial decline. This measure contrasts with short-term inflows and outflows and those over a longer period, indicating that current trading activity is significantly lower than historical averages. A low trading flow 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: A Broader Perspective
The broader Bitcoin market is operating in complex terrain, shaped by geopolitical concerns and legislative changes. Recent events have helped investors generally be more cautious. For example, despite market volatility that caused Ethereum to fall to around $2,390, Bitcoin has managed to remain consistent above $61,100.
Featured image from Vecteezy, chart from TradingView
