“Wake me up when September ends,” was the predominant sentiment of the majority of crypto holders last month. As macro conditions continue to dictate the short-term path for cryptocurrencies, bearish sentiment has taken over the market.
Throughout September, the bearish were much more heated as seen in the red bars below representing the number of sell or bearish opinions.
Reduce in Demand
The total amount spent to use a blockchain represents the willingness to pay and the need to use of holders. In the last quarter, Bitcoin fees generated just under $30 million from the network, down from $42.9 million in Q2 2022.
On the other hand, Ethereum fees dropped even further, from $1.29 billion in Q2 to $264 million in Q3, down 79%.
While demand for the blockchain fell, the price held relatively well with Bitcoin during the Merge and Ether up 30% compared to last quarter.
Additionally, the net flow indicates that while BTC has a neutral sentiment, ETH is more bullish. Bitcoin recorded a modest investment outflow of less than $50 million, higher than an outflow of $192 million from Q2.
As for Ether, more than $1 billion in ETH left exchanges for the fourth consecutive quarter, while outflows from hedge funds in Q3 were $57 million lower than in Q2.
3 Things to Note in October
Bitcoin price has struggled to break above $20,000 throughout September. Without a good push from retailers and whales, a significant increase in price seems like a distant dream.
Whale metrics from Santiment have shown no whale accumulation or major utility in BTC for you to rejoice at the time of writing.
Whales holding between 100 and 10,000 BTC are continuing to dump. Over the past year, these key addresses have reduced their supply by 3.5%. In September, another 0.4% of the BTC supply was dumped. During October, a major trend to watch out for is whale accumulation.
The number of BTC moving from one address to another is still scarce, which has prompted NVT to issue a bearish signal for the second month in a row. A similar increase could prove to be a bullish indicator.
A look at BTC’s funding rate revealed another worrying trend. After the long get high enough, another dumping occurs, traders try to go short temporarily, then give up and start buying again.
So, in the future, it may be essential to keep an eye on the aforementioned key indicators. A reversal could create a bullish move for BTC, ETH, and the broader market.
*Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision.
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