Bitcoin's price consolidation, coupled with diverging on-chain activity and bullish supply dynamics, mirrors early-stage bull market structures. This report delves into key metrics for Bitcoin and Ethereum, highlighting critical trends.
Market Overview
Price Action
- Bitcoin traded between $46,465** and **$50,461 this week, maintaining gains since July's rally.
- Ethereum continued its upward trajectory alongside Bitcoin, though both networks showed subdued on-chain activity compared to prior peaks.
Key On-Chain Trends
1. Supply Distribution & Cost Basis
Bitcoin's UTXO Realized Price Distribution (URPD) reveals three pivotal price zones:
- $31K–$40K: Accumulated 2.98M BTC—likely a strong support floor.
- $45K–$50K: 1.65M BTC acquired here, forming near-term support.
- $53K–$59K: 2.28M BTC held at a loss; potential resistance if investors capitulate.
2. Profit-Taking Strength
- Adjusted SOPR (aSOPR) remains above 1.0, signaling sustained profit absorption—a hallmark of bullish markets.
- Similar patterns preceded the 2020 bull run: capitulation → profit resurgence → hodler conviction.
Activity Divergence: Bitcoin vs. Ethereum
| Metric | Bitcoin | Ethereum |
|---|---|---|
| Active Entities | 275K/day (–21.4% vs. Jan) | 450K/day (–33% vs. May) |
| Transaction Count | 200K/day (–37.5%) | 450K/day (–33%) |
| Fees Paid | 21 BTC/day (1–2% of reward) | 10K ETH/day (DeFi/NFT surge) |
Notable Insights
- Ethereum’s NFT Boom: High fees contrast with declining DeFi token activity (AAVE, UNI, COMP).
- Bitcoin’s Quiet Blockspace: Low fees suggest efficiency gains (e.g., SegWit, Lightning adoption).
Bullish Supply Dynamics
HODL Waves
- Young BTC (<3mo): Just 15% of supply—a multi-year low.
- Mature BTC (3mo–3y): 50% of supply, indicating strong hodling.
Liveliness Decline
- Falling activity metrics (Bitcoin: –62.5% in USD volume; Ethereum: –70% post-May) signal accumulation.
FAQs
Q: Why is low on-chain activity bullish?
A: Divergence often precedes supply squeezes—fewer coins moving means stronger holder conviction.
Q: Are Ethereum’s high fees sustainable?
A: NFT demand drives fees, but scaling solutions (e.g., EIP-1559) may alleviate pressure long-term.
Q: What invalidates these trends?
A: Sudden spikes in old coin movement (indicating sell-offs) would warn of weakening demand.
Conclusion
While price and activity diverge, Bitcoin and Ethereum’s supply dynamics suggest underlying strength. Monitoring old coin behavior and scaling adoption remains critical for trend validation.
Data sources: Glassnode, OKX.