The cryptocurrency market is currently experiencing a significant decline, as are both Bitcoin and Ethereum saw a significant decline in energetic addresses. This trend, which continued throughout 2024, has raised concerns about the future of these leading cryptocurrencies. The consequences for market dynamics could be solemn as investor enthusiasm wanes.

Decreasing energetic addresses

According to CryptoQuant’s latest statistics, energetic Bitcoin addresses have shrunk by approximately 1.17 million to 855,000, while Ether dropped by approximately 382,000 to 312,000. This corresponds to a 27% decline for Bitcoin and an 18% decline for Ethereum year-to-date.

No up-to-date investors market entry appears to be the main cause of this decline. This is necessary to maintain favorable momentum as existing participants dominate trading activity in the absence of up-to-date capital inflows.

Since the beginning of 2024, the number of energetic Bitcoin and Ethereum addresses has been decreasing

“For the bulls to dominate the market, the key condition is the inflow of up-to-date investors.

1. Bitcoin 1.17 million -> 855 thousand
2. Ethereum 382K -> 312K” – By @burak_kesmeci

Full entry 👇https://t.co/gZftQidnxa pic.twitter.com/q5cdpv7x6t

— CryptoQuant.com (@cryptoquant_com) October 1, 2024

The expected emotions around the approval of spot ETFs did not translate into increased activity on the blockchain. Still, there are many investors in the current user base who would have expected this development. Further quantitative tightening of the Federal Reserve’s policy continues to deprive the market of liquidity, increasing pressure on the situation.

Market sentiment and future prospects

However, there are indications that given these challenges, a potential rebound is imminent. For example, Ethereum’s funding rate has remained positive over the past week, indicating growing investor interest in long positions. This means that while Ethereum’s price declines continue, the immense majority of the market remains positive about future performance.

BTC and ETH addresses drop: BTC will drop to 855,000, ETH to 312,000. in 2024

Since the beginning of 2024, the number of energetic Bitcoin and Ethereum addresses has been steadily decreasing. Bitcoin addresses dropped from 1.17 million to 855,000, while Ethereum addresses dropped from 382,000 to…

— Coinness Global (@CoinnessGL) October 1, 2024

It’s quite fascinating that huge Ethereum holders are hoarding their assets rather than selling them. These huge holders reduced their outflows from 311,950 to 139,390, suggesting they have confidence in the altcoin’s long-term prospects. Investors taking this type of action usually expect prices to rebound quickly.

Moreover, Bitcoin’s multiple exchange flow has experienced a significant decline. This indicator contrasts short-term inflows and outflows with longer-term inflows and outflows, indicating that current trading activity is significantly below historical averages. A low exchange flow multiple usually suggests that investors are holding their assets in anticipation of future price increases, rather than actively trading them.

Bitcoin and Ethereum: the bigger picture

The broader bitcoin market is negotiating elaborate terrain shaped by geopolitical concerns and legislative changes. Recent events have helped investors be more cautious overall. For example, despite market volatility that sent Ethereum down to around $2,390, Bitcoin managed to stay steady above $61,100.

Featured image from Vecteezy, chart from TradingView