Ethereum [ETH] seems to be doing better than Bitcoin [BTC] these days. While BTC has experienced more selling pressure in the short term, ETH has remained relatively stable.
Here’s the overview.
Ethereum Staking Hits Records and Reduces Liquid Supply
Ethereum’s supply on the open market has shrunk lately betting rates reached a new all-time record. About 40 million ETH are now locked up, up from about 18 million in 2021.
For context, about a third of the total supply is no longer readily available for trading.
Additional data showed that net flows were slightly negative at the time of writing, with the reserve ratio at a near neutral level; no apparent rush to sell.
With fewer tokens available, short-term selling pressure tends to diminish. This can help Ethereum remain resilient in times of chaos.
Bitcoin is now facing more selling pressure
On the other hand, Bitcoin data revealed positive net flows and a rising reserve ratio. A larger amount of Bitcoin has moved to Binance recently, compared to existing currency reserves.
What this implied is that more Bitcoin will become available for sale.
These inflows have increased alongside the crypto’s recent price recovery following news of the Iran-US ceasefire. Some investors may use the rally as an exit opportunity, increasing the opportunity to sell.
So while ETH’s liquidity supply decreases, Bitcoin faces higher selling pressure in the near term.
BTC and ETH no longer matched…
…and this clear difference could have consequences for the market.
At the time of writing, Ethereum seemed better placed to absorb the volatility, while also leading the altcoin space. By extension, there is a possibility that other major altcoins will also experience less immediate downward pressure.
In fact, capital may not flow evenly across crypto assets. Instead, some of it may pivot away from Bitcoin-led transactions toward Ethereum and select altcoins.
We could be in the early stages of a decoupling trend.
Final summary
- The Ethereum offering of 40 million ETH reduces immediate selling pressure.
- However, BTC faces a higher sell-off risk and could even decouple from ETH and other altcoins.