BTC deposit addresses hit 10-year low, signaling market contraction

The number of addresses depositing BTC to exchanges has fallen to a 10-year low, a sign of contracting market activity, according to on-chain analyst Darkfost. In a contribution to CryptoQuant, Darkfost noted that the 30-day moving average of daily deposit addresses is currently around 31,000, the lowest level in the last decade. This figure regresses market activity to 2017 levels, standing in contrast to the annual average of 47,000. The analyst explained that historically, such a sharp drop in deposit addresses is often seen in the later stages of a bear market when investor interest has significantly diminished. Darkfost attributed the decline to a combination of factors, including a shift in market structure and investor behavior. These include some investors leaving the market entirely during a prolonged adjustment phase, others choosing to hold their BTC while waiting for more favorable conditions, and a growing preference for self-custody and decentralized trading following the collapse of FTX. While reduced participation and slowing activity are negative in the short term, Darkfost assessed that this trend often coincides with a period of decreasing selling pressure.