The on-chain analytics firm CryptoQuant has explained why Bitcoin and Ethereum have recently appeared to be on a path towards acceleration.
Bitcoin & Ethereum Are Looking Bullish In On-Chain Metrics
In a new thread on X, the official CryptoQuant handle discussed how some important on-chain indicators are looking for Bitcoin and Ethereum right now.
The first two metrics of interest here keep track of the demand from the permanent holders and the whales. First, here are the relevant charts for BTC:
The data for the accumulation being done by these two investor classes | Source: CryptoQuant on X
As is visible above, demand from the permanent holders, or the HODLers, had been going down after peaking in March, but recently, the metric has seen a turnaround. These investors have added 70,000 BTC to their wallets in the past month.
A similar trend has also been witnessed in the whales’ holdings, typically defined as addresses carrying more than 1,000 BTC. According to the analytics firm, the monthly demand from these large investors is up 4.4%.
CryptoQuant has also revealed that the sector is experiencing an influx of potentially new capital, as the “new whales” have seen their Realized Cap shoot up recently.
The similar patterns seen in 2020 and 2024 | Source: CryptoQuant on X
The Realized Cap measures the amount of capital a particular investor group uses to purchase their Bitcoin. Thus, the increase in the Realized Cap of the new whales, which are whale entities that have entered within the past 155 days, would represent the fresh demand from large investors coming into BTC.
As the charts above showcase, the pattern in this metric has looked similar this year to what was observed back in 2020. The demand that year led to the 2021 bull run.
Now, here is what the trend in the permanent holder inflows and whale balance has looked like for Ethereum:
The demand that ETH has been receiving recently | Source: CryptoQuant on X
As the graphs show, demand for Ethereum from these investor groups has shot up since the spot exchange-traded fund (ETF) approvals last month.
The permanent holders are now making inflows of 40,000 ETH per day on average, while whales, the investors holding 10,000 to 100,000 ETH, have increased their holdings to record highs of around 16 million ETH.
While signs have been positive for Bitcoin and Ethereum in terms of direct demand, there is a development that may be detrimental to the cryptocurrency sector as a whole. It is the slowdown in the growth of the stablecoins.
The data for the 60-day change in the USDT market cap over the last couple of years | Source: CryptoQuant on X
The chart shows that the Tether (USDT) market cap grew sharply during the rally towards the Bitcoin all-time high. While the largest stablecoin still receives capital injections, its demand has slowed.
Historically, stablecoins have been one of the gateways for capital into the sector, so consistent demand for them can be required for sustainable rallies.
BTC Price
At the time of writing, Bitcoin is trading at around $70,200, up more than 4% over the past week.
The price of the asset seems to have been consolidating recently | Source: BTCUSD on TradingView
Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
Keshav Verma
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
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