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The cryptocurrency market is currently experiencing a major downturn, as both Bitcoin and Ethereum have experienced significant declines in active addresses. This trend, which has continued throughout the year 2024, has caused fears about the future of these outstanding currencies. The effects of market changes can be significant as investor enthusiasm wanes.
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Rejecting Active Addresses
According to the latest statistics from CryptoQuant, active Bitcoin addresses contracted by approximately 1.17 million to 855,000, while Ethereum decreased by approximately 382,000 to 312,000. This equates to a 27% drop for Bitcoin and an 18% drop for Ethereum year to date.
The absence of new investors entering the market seems to be the main reason for this decline. This is important to maintain positive momentum, as existing participants dominate trading activity without the influx of new capital.
Since the beginning of 2024, the active Bitcoin and Ethereum addresses have been decreasing
“In order for bulls to have power in the market, the influx of new investors is an important condition.
1. Bitcoin 1.17M -> 855K
2. Ethereum 382K -> 312K” – By @burak_kesmeciFull post 👇 pic.twitter.com/q5cdpv7x6t
– CryptoQuant.com (@cryptoquant_com) October 1, 2024
The expected excitement around the approval of ETFs has not yet translated into increased activity on the blockchain. However, the current user base bears many investors who would have expected such a development. The continued tightening of the Federal Reserve continues to drain money from the market, adding more pressure to the situation.
Market Sentiment and the Future
There are, however, indications that a potential rebound is imminent given these challenges. For example, the level of funding in Ethereum has remained positive for the past week, which means that there is increasing interest among investors in long positions. This means that even though Ethereum’s price decline has been ongoing, most of the market remains optimistic about its performance going forward.
BTC and ETH addresses drop: BTC drops to 855K, ETH to 312K by 2024
Since the beginning of 2024, the number of active Bitcoin and Ethereum addresses has continued to decrease. Bitcoin addresses dropped from 1.17 million to 855,000, while Ethereum addresses dropped from 382,000 to…
— CoinNess Global (@CoinnessGL) October 1, 2024
Interestingly, large Ethereum holders have been hoarding their assets, rather than selling them. These major holders reduced their output from 311,950 to 139,390, suggesting that they have confidence in the long-term prospects of the altcoin. Investors who take this type of action usually expect prices to recover quickly.
In addition, Bitcoin’s Exchange Flow Multiple experienced a significant decline. This metric compares short-term inflows and outflows to long-term inflows and outflows, indicating that current trading activity is significantly lower than historical averages. A low Exchange Flow Multiple usually suggests that investors hold their assets in anticipation of future price increases rather than trading them.
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Bitcoin and Ethereum: A Broader View
The broader bitcoin market is negotiating a complex environment shaped by geopolitical concerns and regulatory changes. Recent events have prompted investors to be more cautious. For example, despite market volatility causing Ethereum to fall to around $2,390, Bitcoin managed to stay above $61,100.
Featured image from Vecteezy, chart from TradingView