Ain’t Over ‘Til It’s Over

In our last two Crypto On-Chain Digest reports (End of Summer Sale and SHOCKTOBER), we noted that a supply shock driven by long-term holders could push BTC and ETH prices higher. 

Well, price followed through and the data suggests that long-term holders remain confident in the current bull run. In the latest Kraken Intelligence report, Ain’t Over ‘Til It’s Over, the team analyzes several on-chain metrics and indicators to gain insights into what’s behind recent market strength and where we stand in this market cycle.  

HODLer’s Delight

Supply is rapidly exiting exchanges, a common indication that market participants may be moving funds into cold storage for long-term holding. Since June:

  • The amount of BTC sitting on exchanges fell by 9.6% to a 3-year low of ₿2.426 million ($139.8 billion) amid greater demand and dwindling immediately marketable supply. 
  • The total ETH supply sitting on all exchanges has dropped by Ξ8.41 million (~$35B), or more than 37% since reaching a top of Ξ22.577 million (~$93.7B) in August 2020. 

With a smaller supply pool available for trading, further demand could tighten the supply squeeze and drive BTC and ETH prices higher.

Not Yet ‘Overbought’

For as fast as prices have risen to new all-time highs, two metrics — BTC’s Reserve Risk and ETH’s MVRV Z-score — indicate that both assets are far from overbought, and that confidence in the current price level is greater than it was during prior all-time highs reached in May. 

The Return of Digital Silver

Litecoin has a reputation for unexpected and abrupt price surges during bull markets. For example, in the bull runs of 2013 and 2017, LTC rose to the occasion and took the spotlight out of nowhere with respective 638% and 1,160% increases in the span of several weeks. At the time, a number of on-chain indicators foreshadowed LTC’s abrupt rise, and now the latest data shows that demand for LTC may be rising under our noses once again.

Get the full story in Kraken Intelligence’s report, Ain’t Over Til It’s Over:

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