Summary: On-chain trading volume and fees reached record highs this week, with on-chain data for both Bitcoin and Ether suggesting that as cryptocurrency trading becomes more sophisticated and the network becomes more influential, reinforcing the belief in holding both assets.
Bitcoin prices rebounded from their lows this week, opening at $49,077 and reaching a high of $58,396. The growth of stablecoins continued as the largest stablecoin, Tether, reached a new ATH in minting volume, increasing supply by $1.48 billion per week, increasing the status and demand for cryptocurrency fiat currencies.
On-chain data for both bitcoin and ethereum shows that as cryptocurrency trading becomes more sophisticated and the network becomes more influential, reinforcing the belief in holding both assets. As gas prices have fallen and trading volumes have increased, especially after the ethereum price increase, the ethereum chain has seen a significant increase in trading volumes.
Stablecoin supply has generated a new peak
Stablecoins have become the underlying asset and preferred underlying pair across the industry, providing globally accessible and cryptocurrency-based fiat currency anchor coins. Demand for the largest and centrally issued stablecoin, Tether (USDT), hit a new all-time high this week.
Tether’s outstanding debt supply increased by $1.48 billion (+ 3%) this week to a total minted supply of over $51.78 billion.
SDT Circulating Supply Real-Time Chart
Recent stablecoin inflows have brought the stablecoin supply ratio (SSR) down to 13.4, near an all-time low of 9.6. SSR has been consistently low through 2020 and 2021 as stablecoin supply has grown proportionally to the growth of bitcoin valuation.
The low and declining SSR values indicate that global stablecoin supply is increasing relative to bitcoin market capitalization. As the total supply of stablecoins increases, this indicates that the “purchasing power” of cryptocurrency capital has increased and can be quickly exchanged and traded into BTC and other cryptocurrency assets.
Real-time charts of stablecoin supply ratios
The phenomenon of bitcoin maturity (HODLed Cryptocurrency Maturation) has been discussed in previous weeks and we note that bitcoins older than 155 days were reclassified as Long Term Holder (LTH) bitcoins.
Note: 155 days ago was early November 2020 when the price rose from $ 16k to $ 18k consolidating and then breaking the previous cycle’s all-time high.
We can use the Realized Cap HODL wave to observe these changes in the proportion of cryptocurrencies in each age group. This metric will show the increase in ribbon thickness as bitcoin matures or is spent in different age groups. We can see in the table below that the percentage of bitcoins from 1 week old to 6 months old has been growing since November 2020. These are cryptocurrencies that accumulated in the early bull market and have been dormant since then (blue arrows).
Currently, the 3m-6m age range in particular is swelling, suggesting that many cryptocurrencies are approaching the 155-day long-term holder threshold, indicating a strong belief in HODL.
Real-time charts of achieved upper limit HODL Waves
We can confirm this observation by looking at the LTH Net Position Change indicator, which shows the number of cryptocurrencies that have exceeded the 155-day age threshold in the past month. The indicator reached a 6-month high of 96.5k/BTC this week as the number of cryptocurrencies expiring on April 8 exceeded the number of spends
Real-time chart of LTH net position changes
The total supply of BTC held by LTH is also starting to trend upwards after a period of net allocations and expenses. This metric further reinforces that more cryptocurrencies remain dormant and are being HODLed by strong hands than those sold by LTH to realize profits.
LTH Total Supply Live Chart
As a final note on the recent bitcoin correction and HODLer beliefs, the number of profitable UTXOs dropped to 90% in the latest correction, which is the lowest value for that bull market. This indicates that at the bottom of the correction at $47k, more than 10% of all UTXOs were in the red. This coincides with most of the major adjustments in the 2017 bull market.
Despite the decline being the worst contributor to cryptocurrency supply losses, long-term holders do not appear to have been affected by the volatility.
UTXO percentages in real-time profit charts
Ether supply dynamics
On the Ethernet chain, we can use similar tools (such as HODL waves) to assess the age of ETH tokens, while also considering the nuances associated with the Ethernet network.
Bitcoin has a primary application as a store of value, however, Ether represents a more active financial ecosystem where long-term holders can also deploy their HODLed tokens outside of smart contracts and applications. Therefore, ETH dormancy and age are only part of the equation.
First, we review the Ether HODL wave to see the dormant Ether behavior. We can see that a very similar trend exists to Bitcoin in that Ether appears to have expired from 1 week to over 6 months since late 2020 (blue arrows). It can also be seen that the thickness of 1-month to 6-month old cryptocurrencies is gradually increasing, suggesting that HODLing cryptocurrencies accumulated during the early bull market is still a popular strategy
Ether HODL Waves Real-Time Charts
As mentioned earlier, the use of ETH tokens in the ethereum ecosystem is key to understanding network behavior. A relatively large amount of ETH was removed from known exchange wallets this week, spiking over 200k ETH in one day. the table below shows that by 2021, 10 such events have occurred, with daily withdrawals exceeding 200k ETH. in comparison, only two days of transactions exceeded 200k ETH per day, indicating a general preference for self-custody of funds.
Live Chart of ETH Exchange Net Traffic
ETH tokens are not only being withdrawn from centralized exchanges, but are undoubtedly finding their way into smart contracts and DeFi applications as well. The table below compares the percentage of total ETH supply held by exchanges (orange, at 12.0%) with the total supply in smart contracts (blue, at 22.8%). The almost equal and opposite trends of these curves indicate a clear product market fit and the demand for DeFi from Ether holders.
Swap Balance and Smart Contract Supply Live Charts
Total throughput on the ethereum chain reached an all-time high of 16.5 transactions per second this week after ethereum miners raised the blockgas limit to 15M. The previous all-time high of 13.5 TPS was set at the peak of the bull market in 2017 and has since eclipsed it for most of 2021.
Finally, we examine the Ether NVT ratio, a metric that compares the market value of the network to the dollar value of that chain’s settlement. Consider the following framework for interpreting the NVT ratio.
When NVT is trending more short, it indicates that transaction flows are decreasing relative to market capitalization and that the network may be overvalued.
A more bullish NVT downtrend indicates that trading volumes are increasing relative to market capitalization and the network may be undervalued.
When NVT sideways trading supports the current trend, this indicates that both trading volume and market capitalization are increasing and the network is likely to be reasonably valued.
The chart below shows a strong downward trend in Ether NVT since January 2020, especially since the sell-off in March 2020. Recent high transaction throughput has also driven the NVT ratio lower over the past few weeks, indicating support for the recent constructive price action.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/is-hodl-still-the-current-market-staple/
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