On-chain indicators are pointing to positive sentiment towards Bitcoin. Meanwhile, according to a report by Arcane Research, interest in Bitcoin futures on the Chicago Mercantile Exchange has increased significantly, in contrast to Ether.
The supply of “profitable” has increased by 20%
According to data from Glassnode, the supply of “profitable” Bitcoin (the percentage of coins whose price last moved below the current price) has increased since the beginning of this year, specifically by more than 20% since the beginning of the month. first.
Source: Glassnode
Bitfinex analysts wrote in a report as follows:
“This implies that larger and longer-term investors are now holding profitable spot positions. This trend is pretty good for the second half of the bear market, as a 30-day uptrend following a deep downtrend should provide a good buy signal for the next two years.”
Bitcoin in particular and the crypto market in general have been trading well below all-time highs – which were reached in November 2021 – and have also seen a positive uptrend over the past three months as the Bitcoin price increased by 50%. On-chain data also shows that confidence among holders is very high, and Reserve Risk for Bitcoin has recently dropped to its lowest level ever.
“The current price level is the driving force for selling, and confidence in this indicator is also reflected by a host of other secondary indicators, which affect the opportunity cost of HODL. The lower the ratio, the higher the confidence of investors,” the report said.
Source: Glassnode
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Bitcoin is preferred over Ether?
According to a report from Arcane Research, institutional traders are favoring Bitcoin over Ether as of now in 2023. Accordingly, open interest (OI) for Bitcoin futures contracts are listed on the exchange. Chicago Mercantile Exchange (CME) derivatives are up 6% this year while Ether's is down 29%.
“This open interest trend is different from the normal trend in CME futures and it shows that BTC led the market strength in early 2023.”
The report highlights that smaller Altcoin also rallied in January, which was fueled by short-term bull runs, poor liquidity, and an increased risk appetite among retail investors. by the spike in BTC.
In contrast, Ether has not had the same upward momentum. This could explain ETH 's relatively weak start to January compared to other Altcoin . The report also highlights that the annual rolling three-month basis of ETH futures has increased over the past few weeks and is now at a similar level to that of BTC. The futures base of both BTC and ETH on CME has been positive since the week of January 6, signaling positive sentiment among traders.
Joe DiPasquale, CEO of crypto fund manager BitBull Capital, shared that institutional investors’ preference for BTC represents “the safest choice in a bear market.” He noted that upcoming Ethereum protocol updates could raise concerns about the “risk of problems” and added that Shanghai’s hard fork will allow validators to withdraw 16 million ETH already. stake, which is expected to further increase selling pressure.
DiPasquale also said that BTC can serve as the base currency in all Altcoin trading pairs; meaning that when the market drops, other cryptocurrencies will lose value in both USD and BTC.
“By being exposed to BTC, investors can also hedge such losses and potentially even earn more in the early stages of a bull market, as it is often led by Bitcoin price goes up.”
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