The cryptocurrency market is presently experiencing a substantial decline, as both Bitcoin and Ethereum have experienced a substantial decrease in active addresses. This trend, which has persisted throughout 2024, has triggered apprehension regarding the future of these prominent cryptocurrencies. The implications for market dynamics could be profound as investor enthusiasm diminishes.
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Declining Active Addresses
According to the latest stats from CryptoQuant, Bitcoin’s active addresses have contracted by about 1.17 million to 855,000, whereas Ethereum has reduced by about 382,000 to 312,000. This equates to a 27% drawdown for Bitcoin and an 18% decline for Ethereum year-to-date.
The absence of new investors entering the market appears to be the primary cause of this decline. This is essential for maintaining favorable momentum, as existing participants dominate trading activity in the absence of new capital inflows.
Since early 2024, active Bitcoin and Ethereum addresses have been declining
“For the 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 post 👇https://t.co/gZftQidnxa pic.twitter.com/q5cdpv7x6t
— CryptoQuant.com (@cryptoquant_com) October 1, 2024
The anticipated excitement surrounding the approval of spot ETFs has not translated into increased activity on the blockchain. Still, the current user base carries a lot of investors who would have expected such developments. The continued quantitative tightening of the Federal Reserve continues to strip liquidity from the market, adding more pressure to the situation.
Market Sentiment And Future Prospects
There are, however indications that a potential rebound is near in the face of these challenges. For example, funding rate on Ethereum has remained positive for the past week, meaning there is growing interest among investors in long positions. This implies that whereas plunges in the price of Ethereum have been ongoing, a good majority of the market remains optimistic regarding its performance going forward.
BTC and ETH addresses decline: BTC drops to 855K, ETH to 312K in 2024
Since the start of 2024, the number of active Bitcoin and Ethereum addresses has continued to drop. Bitcoin addresses fell from 1.17 million to 855,000, while Ethereum addresses declined from…
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