The two largest cryptocurrency assets, Bitcoin and Ethereum are witnessing a noticeable shift in investor behavior and confidence, as evidenced by the negative trend in their network activities, leading to indigent performance in recent months.
Vigorous addresses in Bitcoin and Ethereum in 2024
Recently, Bitcoin and Ethereum activity have dropped dramatically due to a continued decline in the number of busy addresses on both networks. Kyle Doops, host of Crypto Banter and market expert, common the disturbing development of the X platform (formerly Twitter), sparking speculation about its impact on two leading digital assets.
This bleak turn of events points to a potential slowdown in user adoption and a broader reduction in transaction volume, reflecting that Bitcoin market dynamics and Ether may be decreasing. Several factors, such as market uncertainty and profit-taking from ongoing price fluctuations, are believed to have caused the decline, which would have caused users to temporarily leave the network.
The market expert emphasized that since the beginning of this year, despite general expectations of a boom, the number of busy addresses has been systematically decreasing. Specifically, this means fewer wallets work with two blockchains.
Kyle Doops stressed the need for patience amid the shift to quantitative easing to reignite market excitement for fresh investors as liquidity is drained by Federal Reserve (Fed) tightening policy.
Leading on-chain data and analytics company CryptoQuant has done this too shed airy on the development, noting that fresh investors are not entering the cryptocurrency landscape as investors and liquidity have already entered the market in anticipation of Spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs).
Still, CryptoQuant noted that the decline in busy addresses means the media hype has yet to materialize and there has been no uptick following The Fed’s first interest rate cutas expected. This is because the Fed continues quantitative tightening (QT), the process of withdrawing liquidity from the market.
Additionally, CryptoQuant claims that there has also been a noticeable augment in the M2 money supply over the same period. Ultimately, the platform expects the number of busy addresses to augment and market noise to return when the Fed once again resumes quantitative easing, a method of increasing liquidity in the market.
Negative price sentiment is growing
As a result, Bitcoin and Ethereum continue to struggle to initiate gains general market turbulence, raising concerns about the trajectory of leading digital assets.
Currently price BTC dropped almost 2% in the last day, reaching $60,945 ETH sees a greater price decline of almost 5% over the same period, reaching a price of $2,360. Both assets are currently experiencing deterioration in investor sentiment as their trading volumes show a similar decline of over 19%.
Featured image from Unsplash, chart from Tradingview.com
