Typical Bull Run: Bitcoin reserves are falling, Ethereum fees are rising

The record high season in the crypto market also has its downsides. While Bitcoin holdings are falling, Ethereum fees are rising. The market update.

Backwards in a chord: After the soaring, profits are diligently being taken on the crypto market. Total market capitalization is down a percentage point on a daily basis, but has remained steadfastly above the $ 3 trillion mark. The workhorse Bitcoin is pulling out 1.7 percent, as is Solana (SOL) and Cardano (ADA). Ethereum (ETH) and XRP share a moderate price discount of one percent. At the bottom of the ten largest cryptocurrencies, Polkadot (DOT) posted a minus of 3.4 percent, Dogecoin (DOGE) of 2.8 percent. In return, Binance Coin (BNB) has risen by 0.6 percent in the last 24 hours.

Bitcoin reserves in the dive

It’s a familiar picture in hot market phases: Bitcoin stocks on the stock exchanges are melting away from rally to rally. Trading venues currently hold just 13 percent of the total amount in circulation – a total of 2.48 million BTC. Since the market crash at the beginning of the pandemic, the share of the total Bitcoin supply has declined by four percent.

As the graph from Glassnode shows, the decline in stock exchange reserves is reflected with the increase in the Bitcoin price. Sure: supply and demand determine the price. If a high demand meets a shortage of supply, price increases are the immediate consequence. The sell-off should therefore also have a positive effect on BTC performance in the future.

Ethereum fees explode

Turbulent market phases also have another effect: increasing transaction fees. Ethereum is simply not getting rid of its high gas fees, the fee throttling expected from the London upgrade has not yet materialized. According to Bitinfocharts, the costs for a simple transaction are currently 0.012 ETH on average – the equivalent of 56 US dollars.

The surge is a “double-edged sword for Ethereum,” as blockchain analytics firm Coin Metrics writes. On the one hand, high network charges indicate high demand. At the same time, however, the high costs “lead to a displacement of the activity”. As a result, transactions with a value of less than 100 US dollars hardly take place.

The number of daily active addresses on Ethereum averaged 650,000 in the past week. This is the highest measured value since August this year. While it was still the NFT hype in the summer, the current increase is mainly due to Uniswap transfers. In addition, according to Coin Metrics, there is “the latest meme coin mania around Shiba Inu (SHIB)”, which is an ERC-20 token on Ethereum. Last but not least, yesterday’s launch of the Ethereum Name Service with its governance token ENS ensures high network utilization. In the last 24 hours, seven percent of the total gas fees were attributable to the ENS token.

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