Ethereum
Bitcoin and Ethereum on the “acceleration path”, CryptoQuant explains why — TradingView News
On-chain analytics firm CryptoQuant has explained why Bitcoin and Ethereum appear to be on an acceleration path recently.
Bitcoin and Ethereum Look Bullish in On-Chain Metrics
In a new thread on
The first two parameters of interest here track demand from permanent holders and whales. First, here are the relevant charts for BTC:
NewsBTC
As can be seen above, demand from permanent holders, or HODLers, had been declining after peaking in March, but recently the metric has seen a turnaround. These investors added 70,000 BTC to their portfolio over the past month.
A similar trend was also observed in whale holdings, generally defined as addresses containing more than 1,000 BTC. According to the analysis firm, monthly demand from these large investors is up 4.4%.
CryptoQuant also revealed that the sector is seeing an influx of potentially new capital as “new whales” have recently seen their realized cap increase.
The realized cap measures the amount of capital that a particular group of investors uses to purchase their Bitcoin. So, the increase in the realized cap of new whales, which are whale entities entered in the last 155 days, would represent the new demand from large investors entering BTC.
As the charts above show, the trend in this metric looks similar this year to what was seen in 2020. The demand that year led to the 2021 bull run.
Now, here is what the trend of permanent holder inflows and whale balance looks like for Ethereum:
As the charts show, demand for Ethereum from these investor groups has exploded since the approval of spot exchange-traded funds (ETFs) last month.
Permanent holders are now generating inflows of 40,000 ETH per day on average, while whales, investors holding between 10,000 and 100,000 ETH, have increased their holdings to record levels of around 16 million ETH.
Although the signs are positive for Bitcoin and Ethereum in terms of direct demand, there is a development that could be detrimental to the cryptocurrency sector as a whole. This is the slowdown in the growth of stablecoins.
The chart shows that the market cap of Tether (USDT) rose sharply during Bitcoin’s rally to its all-time high. While the largest stablecoin is still receiving capital injections, its demand has slowed.
Historically, stablecoins have been one of the gateways for capital to enter the sector, so consistent demand may be necessary for a sustainable recovery.
BTC Price
At the time of writing, Bitcoin is trading at around $70,200, up more than 4% over the past week.