Demand for BTC and ETH Exposure Weakens as U.S. Investors Turn Cautious: CryptoQuant

The cryptocurrency market is facing a decline in momentum, which is affecting all sectors in the ecosystem, particularly areas linked to investors in the United States.

A report from CryptoQuant revealed that U.S. investors are exhibiting a slowdown in demand for bitcoin (BTC) and ether (ETH). This slow pace extends to both the spot and derivative markets, following a significant rally in late September that drove BTC and ETH to $126,000 and nearly $5,000, respectively.

BTC and ETH Demand Weakens

During the last rally weeks ago, investor appetite for exposure to BTC and ETH increased, as reflected in the demand for these assets and their related products. With enthusiasm waning, U.S. investors — both retail and institutional — have become cautious in their approach.

CryptoQuant stated that all metrics in the spot, futures, and derivatives markets indicate profit-taking rather than renewed accumulation among investors. Data analyzed by experts collectively points to a cooling sentiment among investors. This also suggests that market participants in the U.S. are waiting for new catalysts before re-entering the risk market.

In the U.S. Bitcoin and Ethereum exchange-traded fund (ETFs) market, outflows are now dominating. The seven-day average net outflow from spot Bitcoin ETFs stands at 281 BTC, amounting to $30.6 million in negative flows. CryptoQuant states that this is one of the weakest records for these Bitcoin products since April, indicating that ETFs acted as net sellers of BTC last week.

On the Ethereum ETFs front, inflows have slowed since mid-August and are currently almost at zero.

Derivatives Markets Feel the Heat

Furthermore, the Coinbase price premium indicates that spot demand on U.S. crypto exchanges has decelerated. The 24-hour moving average of the metric is falling close to zero for the first time since September 8. Positive coinbase premiums usually signal higher prices on the exchange, an indication that demand in the U.S. is growing faster.

Meanwhile, investor demand in the Bitcoin and Ethereum futures markets is at low levels. This can be seen in the decline of the Chicago Mercantile Exchange’s (CME) Futures annualized basis. For Bitcoin, the metric has fallen to 1.98%, its lowest in over two years. For Ethereum, the indicator has declined to 3.0%, the lowest since July 29. This indicates that the demand for Bitcoin and Ethereum futures with expiration dates in six months or longer has decreased as both assets have fallen from their all-time highs.

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