Bitcoin And Ethereum Active Addresses Nosedive In 2024, Signaling A Potential Slowdown In User Adoption

Lately, Bitcoin and Ethereum activity has drastically plummeted due to a persistent drop in the number of active addresses on both networks.

The two largest cryptocurrencies by market capitalization, Bitcoin and Ether, are displaying a concerning trend with a worsening performance despite being in a bull market.

On-chain data reveals a continuous decline in active addresses on both Bitcoin and Ethereum networks. Kyle Doops, host of Crypto Banter and market expert, shared this development on X (formerly Twitter), sparking speculation on its implications for the top two digital assets.

This pessimistic shift indicates a potential slowdown in user adoption and a broader decrease in transaction volume, suggesting that the market momentum for Bitcoin and Ethereum may be waning. Several factors are thought to be contributing to this decline, including market uncertainty and traders taking profits amid the current price波动, which leads to users temporarily leaving the network.

The market expert highlighted that the number of active addresses has been consistently decreasing since the beginning of this year despite being in a bull market. Specifically, this implies that fewer wallets are engaging with the two blockchains.

Doops emphasizes the need for patience as the industry awaits a shift to quantitative easing to reignite market excitement, with the sector needing new traders as liquidity is being drained by the Federal Reserve’s (Fed) tightening.

Leading on-chain data and analytics firm CryptoQuant has also covered this development, highlighting that new traders are not entering the crypto landscape despite anticipation of the Spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs) that brought traders and liquidity into the market.

However, CryptoQuant notes that this drop in active addresses indicates that the hype did not materialize and there was no rally after the Fed's first rate cut, as was expected. This is because the Fed is still performing quantitative tightening (QT), a process of removing liquidity from the market.

During the same period, CryptoQuant adds that there were also notable increases in the M2 money supply. Ultimately, the platform anticipates a rise in active addresses and a return of market hype once the Fed resumes quantitative easing, a method of adding liquidity to the market.

Rising to the Occasion: Crypto Banter and CryptoQuant Provide Valuable Insights on Shifting Market Dynamics

As the crypto market continues to experience turbulence, with moments of both excitement and disappointment, the two largest cryptocurrencies by market capitalization are displaying an interesting trend.

Despite being in a bull market, Bitcoin and Ether are showing sluggish performance, sparking concern among investors. A deeper look at on-chain data reveals a continuous decline in active addresses on both networks.

Kyle Doops, host of Crypto Banter and market expert, shared this development on X (formerly Twitter), highlighting its significance. This pessimistic shift indicates a potential slowdown in user adoption and a broader decrease in transaction volume, suggesting that the market momentum for Bitcoin and Ethereum might be decreasing.

Several factors are thought to be contributing to this decline, including market uncertainty and traders taking profits amid the current price波动, which leads to users temporarily leaving the network. Doops emphasizes the need for patience toward a shift to quantitative easing in order to rekindle market excitement as the sector awaits fresh investors.

Leading on-chain data and analytics firm CryptoQuant has also covered this development, highlighting that new traders are not entering the crypto landscape despite anticipation of the Spot Bitcoin and Ethereum Exchange-Traded Funds (ETFs) that brought traders and liquidity into the market.

However, CryptoQuant notes that this drop in active addresses indicates that the hype did not materialize and there was no rally after the Fed's first rate cut, as was expected. This is due to the fact that the Fed is continuing quantitative tightening (QT), a process of withdrawing liquidity from the market.

During the same period, CryptoQuant adds that there were also notable increases in the M2 money supply. Ultimately, the platform expects a rise in active addresses and a return of market hype once the Fed resumes quantitative easing once again, a method of adding liquidity to the market.

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