Historically, Bitcoin has played a crucial role in driving market trends. Due to this substantial influence over other cryptocurrencies, BTC has, time and again, served as a primary indicator.
While long-term holders of Bitcoin started liquidating their positions in January, their Ethereum counterparts have been steadily accumulating.
Divergence Among Ethereum Holders
The behavior of long-term holders is crucial for gauging market cycles. As price increases, these investors start offloading their accumulated assets, which, in turn, begins the early stages of a bull market and continues its peak. Instead of following Bitcoin’s lead, a divergence has been witnessed and long-term holders of Ethereum have kept up their accumulation.
According to the latest analysis by IntoTheBlock, this behavior marks a departure from the last cycle when Ethereum holders’ actions closely mirrored those of Bitcoin investors.
The shift is attributed to the growing yield opportunities for Ethereum, making it more lucrative to hold.
Currently, IntoTheBlock estimates that 27.5% of the total ETH supply is staked. Meanwhile, 16.3% of this staked ETH is being restaked via protocols such as Eigenlayer, Karak Network, and Symbiotic. Such a trend demonstrated a strong demand for native yield among ETH holders.
Moreover, many long-term Ethereum holders could be bidding their time for the spot Ethereum ETF approval and new all-time highs before deciding to sell. As reported earlier, more than 83% of ETH holders are currently sitting on profit, with additional catalysts at play, the asset could witness significant rally going forward.
While Bitcoin led the pack with almost 90% of its holders in profit, the bearish trend persists as the top crypto asset hovers near a crucial demand zone. Data suggests that investors need to monitor the support level between $61.9k and $63.8k.
Bitcoin Transactions Plummet
Glassnode’s latest analysis revealed a significant decline in the volume of transactions on the Bitcoin network following its all-time high despite healthy investor profitability.
This reduction in transaction volume could potentially highlight a decreased appetite for speculation among investors and a growing sense of indecisiveness within the market.