The Exchange Net Position Charts for the leading crypto Bitcoin and the leading altcoin Ethereum are showing interesting signs. Glassnode data shows contrasting activity from ETH to BTC, indicating increased investor sentiment.
Why is stock market entry and exit important?
Analysis of Bitcoin and Ethereum exchange flows revealed opposite activity for the first two tokens. Meanwhile, the market leader has established a clear dominance in terms of long-term hodl. Exchange flows are the number of tokens deposited or withdrawn from an exchange wallet. A popular on-chain metric to assess this is the Exchange Net Position Change.
The primary reason for moving tokens to an exchange is to sell the token. Therefore, stock market entries are generally considered bearish. In contrast, withdrawing tokens is usually done with the goal of holding them long-term. Because of this, stock market exits are generally considered bullish. Examining tokens going in and out of exchanges makes it possible to identify bearish or bullish investor sentiment.
Bitcoin’s stock market net position change
As you follow on Kriptokoin.com, the market saw sharp price drops due to de-leverage across the industry after the Terra scandal. Bitcoin also fell to $ 17,600 on June 18 in this process. The chart below shows the exchange’s BTC outflows, with daily exits exceeding $1 billion on average. The data has been pretty consistent since the bottom. Despite Bitcoin falling as low as $20,800 on August 19, the stock market exit rate increased significantly over the past week. This shows that investors are seeing value in the current price range.
Source: GlassnodeThe FTX exchange accounted for more than half of the total exits last week. There is no obvious root cause for this occurrence. However, ‘leaked documents’ on August 20 revealed that FTX had increased its revenue from $90 million in 2020 to $1 billion in 2021. This means an increase of over 1,000%.
Source: GlassnodeFurther analysis of FTX’s BTC reserves shows a significant drop in holdings. In March, the company held more than 120,000 BTC. But now, for part of the 3rd quarter, this has only dropped 13,000 coins, with the period showing the sharpest drop since June, leading to a gradual decline in holding BTC.
Source: GlassnodeLeading altcoin Ethereum exchange net position change
In contrast, Ethereum’s Net Position Change shows that the amount of tokens leaving the exchanges is close to net zero, despite the large outflows as of mid-March. This development is a negative sign, especially as the merge approaches. He suggests that investors think the move to Proof-of-Stake (PoS) is a ‘buy the rumor, sell the news’ event.
Source: GlassnodeAccording to experts, the contrasting activity between Bitcoin and the leading altcoin shows that investors see BTC, not ETH, as a long-term play against macro developments such as inflation or escalating geopolitical tensions.
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