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The analysis of cryptocurrency markets shows that the exchange balances of ether and bitcoin take different paths

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    Bitcoin and ether have parted ways in the inflow to and outflow from exchanges.

    Net position metrics show that Investors are sending bitcoin to exchanges and removing ether from them. The moves imply bearish sentiment for BTC and bullishness for ETH, a departure from their more typical correlated paths.

    BTC Exchange Net Position Change (Glassnode)

    Exchange balances tend to increase when investors are considering selling an asset, or at least placing themselves in positions to do so quickly. Investors removing assets from exchanges implies that investors are looking to hold the asset.

    ETH Exchange Net Position Change (Glassnode)

    The current trends don't necessarily predict longer-term future investor action, but they are noteworthy. Bitcoin trending bearishly would run opposite its average performance following a "golden cross," such as the one that the asset reached Feb. 18. Bitcoin’s price rose an average 8% following the seven golden crosses since 2015 that preceded the latest one.

    A golden cross occurs when the price of an asset’s 50-day moving average surpasses its 200-day moving average.

    What’s behind the latest movements?

    BTC prices remain up 42% year to date, and investors may be unable to ignore the temptation of realizing profits. A key point to watch will be whether BTC movement onto exchanges rises. The current increase has been mild, which may reflect more that investors are looking to manage risk as the market seems to be emerging from a period of contraction than negativity.

    ETH activity has been more pronounced because its exchange net position change has been negative in each of the last 13 days. ETH was removed from exchanges even as prices declined 10% between Feb. 7 and Feb. 13.

    Year to date, BTC has outperformed ETH by approximately 8%, despite ether’s supply declining by 33,000 ETH since September.

    The difference between BTC and ETH in exchange net position has not extended to the derivatives space. Funding rates for both bitcoin and ether remain positive, indicating that long-position traders are willing to compensate short-position traders to maintain their bullish stance.


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