On 12 August, Lucas Outumuro, head of research at analytics firm Into TheBlock, published weekly observations about the market.
Lucas covered the final stages of preparing Ethereum for the merge, its impact on Ethereum as well as ETH, and the upcoming ETHpo token. Lucas also evaluated institutional demand for bitcoin by looking at past holding patterns and on-chain activity.
According to Lucas, this week, Ethereum (ETH) is moving sharply away from crypto exchanges, while Bitcoin (BTC) is moving in the opposite direction. Outumuro noted that Ethereum recorded a net outflow of nearly $1 billion during the week, indicating “strong buying activity” and potential accumulation.
Lucas also gave some practical information on the exchange netflow.
Exchange netflow is the net amount of inflows minus the outflows of a particular crypto-asset going into or out of centralized exchanges. Crypto-assets moving into exchanges can indicate selling pressure, while crypto-asset withdrawals indicate potential accumulation.
According to Lucas Outumuro of IntoTheBlock,
- Bitcoin records relatively large inflow to centralized exchanges worth $132M after last week’s outflow
- ETH, on the other hand, has seen a steady outflow over the past week, leaving the exchanges around $1B, suggesting strong buying activity.
Crypto analytics firm Sentiment published a study in 2021 showing that large fluctuations in exchange inflows led to a 5% drop in the average value of crypto assets.
Outumuro said that investors are holding bitcoin at high rates.
Largest bitcoin holdings sit with long-term-oriented entities
- More than 60% of the bitcoin supply is held for more than 1 year
- The record 24.3% has been held for more than 5 years
- Entities that entered bitcoin 5 years ago were mostly crypto-native firms and individuals
With crypto and stocks approaching parallel lines, institutional investors’ access to BTC is becoming more common than ever.
According to Outumuro, both crypto assets saw an increase in fees and on-chain activity, despite the difference in exchange flows for BTC and ETH.
“Fee represents the sum of the total fees spent for using a particular blockchain. It tracks the willingness to spend and the demand to use BTC or ETH. On-chain activity for both Ethereum and Bitcoin prices. grew along with.”