Bitcoin Users Flee Network After Bearish Price, But Ethereum Continues To Break Records
On-chain data shows that Bitcoin has been seeing an exodus of investors recently, while the Ethereum network has continued to grow.
Total Amount Of Bitcoin Holders Have Just Seen Largest Drop Since March
According to data from the on-chain analytics firm Santiment, the Total Amount of Holders indicator has just seen its largest 3-day drawdown for Bitcoin since March.
As the metric’s name already implies, the “Total Amount of Holders” keeps track of the total number of wallets on a given cryptocurrency network currently carrying a non-zero balance.
When the value of this metric goes up, it suggests that either new investors are joining the blockchain or old ones who had left earlier are coming back. The indicator also naturally rises when existing users create new addresses for privacy.
Whatever the case, the rising number of holders generally implies a net amount of adoption for the asset, which can be bullish for its price in the long term.
On the other hand, the metric heading down implies a net number of users are completely emptying their wallets. Such a trend suggests some holders have decided to exit from the cryptocurrency.
Now, here is a chart that shows the trend in the Total Amount of Holders for the top two coins in the sector, Bitcoin and Ethereum, over the past six months:
As the above graph shows, the total number of holders has recently registered a decrease for Bitcoin, suggesting that some selling has occurred. The recent 3-day drop is the sharpest the indicator has seen since just before the price’s all-time high back in March.
The drop was because investors booked their profits while the rally was still on. This time around, however, the cryptocurrency’s price has been going through bearish action instead, so this exodus of holders is likely occurring due to fears around further drawdowns.
While Bitcoin has seen the Total Amount of Holders go down, the indicator hasn’t broken its uptrend for Ethereum, as the network has continued to set new highs. Thus, it would seem like the ETH investors aren’t going through capitulation yet.
Historically, assets have tended to move against the investors’ expectations, so fear in the market has often helped turn the price around. As Bitcoin investors appear to be fearful right now, it’s possible that a bottom could be near for the coin.
Ethereum’s adoption continuing to happen at the same rate as earlier may not exactly be bearish, but it does show that its users aren’t worried about the price yet.
BTC Price
At the time of writing, Bitcoin is trading at around $64,700, down almost 3% in the past week.