Speculatory Divergence

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Reading https://insights.glassnode.com/the-week-onchain-week-19-2024/

TLDR :cherry_blossom:

The article discusses the divergence in performance between Bitcoin and Ethereum during the 2023-24 cycle, with Bitcoin exhibiting stronger price action and speculative interest compared to Ethereum.

Key Points :dizzy:

  • Bitcoin experienced a temporary sell-off after the 4th halving, but has since recovered, while Ethereum saw a more severe drawdown.
  • Bitcoin’s Short-Term Holder cohort has seen a stronger increase in speculative activity compared to Ethereum.
  • Long-Term Holders in Bitcoin have been more active in taking profits during the recent rally, while Ethereum LTHs remain patient.
  • The approval of US spot Bitcoin ETFs has likely contributed to Bitcoin’s outperformance over Ethereum.

In-depth Summary :memo:

The article delves into the price performance and investor positioning dynamics between Bitcoin and Ethereum during the current market cycle. It notes that while both assets experienced a temporary sell-off after the 4th Bitcoin halving, Bitcoin’s recovery has been stronger, with a maximum drawdown of -20.3% compared to Ethereum’s -44%.

The analysis suggests that the divergence in performance can be attributed to a stronger inflow of speculative capital into Bitcoin, particularly among the Short-Term Holder cohort. This is in contrast to Ethereum, where the Short-Term Holder Realized Cap has barely moved higher, indicating a lack of new capital inflows.

Furthermore, the article highlights that Long-Term Holders in Bitcoin have been more active in taking profits during the recent rally, while Ethereum’s LTHs appear to be waiting patiently for better profit-taking opportunities. This difference in investor behavior is likely influenced by the approval of US spot Bitcoin ETFs, which have brought increased attention and access to the asset.

ELI5 :hugs:

The article is talking about how Bitcoin and Ethereum have been performing differently in the recent market cycle. Bitcoin has been doing better, with its price recovering faster after a dip, and more people buying and selling it in the short term. Ethereum, on the other hand, has had a harder time, with its price dropping more and not as many people buying and selling it in the short term.

The article suggests that the approval of Bitcoin ETFs in the US has helped Bitcoin do better, as it has made it easier for people to invest in. It also shows that long-term Bitcoin holders have been taking more profits during the recent price increase, while long-term Ethereum holders are still waiting for better opportunities to sell.

Writer’s Main Point :thought_balloon:

The main point of the article is to highlight the growing divergence in performance and investor behavior between Bitcoin and Ethereum during the current market cycle. This divergence is likely driven by the increased attention and access brought about by the approval of US spot Bitcoin ETFs, which has led to stronger speculative interest and capital inflows into Bitcoin compared to Ethereum.