The crypto market is going through a rough patch right now, with Bitcoin and Ethereum seeing a big drop in active users. This trend has been happening all year and has some people worried about the future of these popular cryptocurrencies.
Fewer People Are Using Crypto
Data shows that the number of active Bitcoin and Ethereum addresses has been shrinking. This means fewer people are buying, selling, or using these cryptocurrencies.
Here’s the breakdown:
- Bitcoin: The number of active addresses has fallen from 1.17 million to 855,000, a drop of 27%.
- Ethereum: The number of active addresses has fallen from 382,000 to 312,000, a drop of 18%.
The main reason for this decline is that new investors aren’t joining the market. Without new money coming in, the market is dominated by existing users, and trading activity slows down.
What’s Holding Back Crypto?
- Spot ETF Delays:
The excitement around the approval of spot ETFs hasn’t led to more people using crypto.
- Federal Reserve Tightening: The Federal Reserve’s efforts to control inflation are taking money out of the market, making it harder for crypto to grow.
Is There Hope For Crypto?
Even though things look tough right now, there are some signs that the market might be turning around:
- Ethereum Funding Rate: The funding rate for Ethereum has been positive for the past week, meaning more people are betting on the price going up.
- Large Ethereum Holders:
Big Ethereum holders are accumulating their coins instead of selling them, suggesting they believe the price will rise in the future.
- Bitcoin Exchange Flow Multiple:
This metric shows that people are holding onto their Bitcoin instead of trading it, which could mean they’re expecting the price to increase.
The Bigger Picture
The crypto market is facing challenges from geopolitical events and changing regulations. While Ethereum has been struggling, Bitcoin has been holding its ground.
It’s still early to say what the future holds for crypto, but it’s clear that the market is going through a period of adjustment. Only time will tell if crypto can overcome these challenges and regain its momentum.
