Fewer People Are Using Bitcoin and Ethereum
The number of active addresses on both Bitcoin and Ethereum networks has been steadily declining this year. This means fewer people are using these blockchains, which could be a sign that investor interest is waning.
What’s Going On?
Market experts believe several factors are contributing to this trend:
- Market Uncertainty: The current market is volatile, with prices fluctuating up and down. This can make investors hesitant to buy or sell.
- Profit-Taking: Some investors may be selling their Bitcoin and Ethereum holdings to take profits after recent price increases.
- Federal Reserve’s Tightening:
The Federal Reserve has been raising interest rates and reducing the money supply, which can make it more expensive to borrow money and invest in cryptocurrencies.
Waiting for a Boost
Experts believe that a shift to quantitative easing (QE) by the Federal Reserve could rekindle market excitement and attract new investors. QE involves adding liquidity to the market, which could make it easier and cheaper to invest in cryptocurrencies.
Hype Hasn’t Materialized Yet
Despite the anticipation of a rally following the Fed’s first rate cut, the expected hype hasn’t materialized. This is because the Fed is still withdrawing liquidity from the market, which is discouraging new investors from entering the crypto space.
Price Drops and Lower Trading Volume
The declining active addresses have coincided with negative price movements for both Bitcoin and Ethereum. Bitcoin is down nearly 2% in the past day, while Ethereum has fallen by almost 5%. Trading volume for both assets has also decreased by over 19%.
The Future is Uncertain
It remains to be seen whether the current trend will continue or if the market will eventually rebound. The Federal Reserve’s actions will likely play a significant role in determining the future of Bitcoin and Ethereum.
