The BTC stole the market this week as number one cryptographic prices have tried to recover again the levels 10000. The attempt of the BTC crossing the psychological barrier has occurred after the price ETH have reached their levels highest since early March 2020. with the hype and conversations of BTC and ETH , which continue to circulate among the cryptographic community, traders and investors have could find interesting information when comparing -chain, off-chain, and derivative derivatives. From this, we could gain a better understanding of the current BTC and ETH situation , helping us to better judge which one is the best buy now.
Balance on exchanges
The balance of the exchanges could provide us with a color in terms of the feeling of the HODLers and the number of coins / tokens available for sale. Glassnode data shows that the BTC balance on the stock exchanges fell to 0.32 mln BTC , the lowest level in over a year. The BTC balance on the stock exchanges has been trending down since March, and the trend continues this way.
Figure 1a: BTC trade balance (Source: Glassnode)
Figure 1b: ETH trade balance (Source: Glassnode)
On the other hand, the ETH trade balance has snowballed. The number reached 18.7 million ETH in mid-March this year, which has not been the case since the end of December 2016.
Interestingly, the balance numbers of the two assets reacted very differently during the massive sale in March. It seems that the sale triggered the downward trend in the balance of the BTC , while more traders have put their ETH trading after the price correction ETH in the same period.
Why is it important?
We believe traders and investors withdrawing their coins / tokens from trading could be a sign of a long term uptrend, as they wanted to store their holdings in cold wallets and expect the potential bull run. From this point of view, it seems that the markets were more optimistic on BTC than on ETH . However, other factors could also be responsible for the increase and decrease in balances, such as network security.
Addresses with a high balance
The whales' willingness to accumulate coins / tokens could be another clue that traders and investors should look for in fundamental analysis. The number of unique high-balance addresses could be particularly large.
Glassnode data suggests that the number of unique addresses equal to / greater than ETH 32 has steadily increased over the past year, despite price fluctuations. Meanwhile, the number of unique addresses with as many as 10,000 BTC rebounded from the lows of late March. However, it seems relatively low compared to the number at the end of June, which is 120.
Figure 2a: Bitcoin addresses . with ball. ≥ 10KBTC (Source: Glassnode)
Figure 2b: Ethereum addrs. with ball. ≥ 32ETH (Source: Glassnode)
Why is it important?
We think that the power of hodling is one of the critical measures to reflect the feeling of whales on a given asset, and it seems that ETH is clearly a winner from this point of view. However, we also see limits to this. This is because ETH 32 is a relatively low barrier to entry, which could reduce the size of the number.
Although the number of BTC addresses with a high balance has increased, this data alone is only part of the bigger picture. By combining the trade balance, we can see a more complete picture.
Transaction and gas costs
Transaction costs Bitcoin and gases Ethereum used have recently received numerous conversations encrypted newsgroups. One of the stories is that the total amount of ETH gas used has reached a new historical record, which means that more people are using the network; thus, the price should increase. The price ETH have reached 250 levels before returning to 230 handles.
However, when we look at the average number of ETH gases used, we could see another picture. Glassnode data shows that the average ETH gas used fell behind the rally and formed a downward trend. From this point of view, there may not be as many transactions as we thought.
Figure 3a: Bitcoin transaction fees (average) (Source: Glassnode)
Figure 3b: Ethereum gas used (average) (Source: Glassnode)
On the other hand, the average transaction fees for bitcoin are at relatively high levels despite the recent fluctuations. In general, higher transaction fees could suggest that the market has higher demand for trading. Therefore, users are willing to pay more for faster settlements. It also indicates that more people are using the network.
Why is it important?
We believe that cryptocurrency is a kind of valuable network asset, which means that the more people use it and use it, the more valuable that asset will be. However, it should be noted that there is no direct correlation between transaction fees / gasoline and price, and these numbers could be just two more pieces of the puzzle.
ETH remains negative, BTC rebounds
If the chain activity analysis is like a fundamental stock analysis, the analysis of derivatives trading activities could be like a statistical analysis. This could give market participants some insight into how real traders have positioned their trades. We could find valuable information there.
We have noticed that one of the recent conversations in the crypto community is that the ETH option bias has become negative, and it could be bullish for the price.
Figure 4a: BTC 25d asymmetry (source: asymmetry)
Figure 4b: ETH 25d asymmetry (Source: Skew)
Option asymmetry is the difference in implied volatility between OTM / ATM / ITM options. Traders can use these relative changes as a trading strategy . Skew's data show that the ETH options bias remained essentially negative, while that of the BTC was regularly recovered in the positive zone.
What does it tell us?
We believe that the IV changes in the various option contracts might somewhat suggest the future volatility of the underlying and how traders anticipated it. However, the asymmetry of the options is not always a useful indicator in forecasting prices, but may be useful in certain circumstances. We believe that traders should take this into consideration as well as many other factors that can stimulate crypto markets.
Eyes of the market on BTC options with higher strike prices, the ETH approach has been relatively conservative
The way that option traders choose strike prices seems to tell us that the market has adopted a more progressive view of BTC prices , while that of ETHs has been relatively moderate.
We can see that most of the open BTC options were in the area of the strike prices of 10,000, while the second and third strike prices wear out around 12,000 and 11,000. On the ETH side , 280 strikes were the most popular, while the second and third largest OIs were 220 and 240.
On the ETH side , calls with 280 keystrokes seem to be a typical bullish pattern. However, the calls with 220 and 240 strikes seem rather a conservative approach, as the contracts were already / will soon be in the money. On the other hand, positions 220 and 240 are more like defensive configurations, since ETH has been rallying since mid-May.
On the BTC side , calls with 10,000 strikes also seem to be a standard bullish pattern, but calls with 12,000 and 11,000 strike prices seem even more aggressive. money. If a trader is bearish on BTC , he can consider put options with strike prices even lower than above 10,000.
Figure 5a: BTC opt. OI by strike (as of June 4) (Source: Skew)
Figure 5b: ETH opt. OI by strike (as of June 4) (Source: Skew)
Conclusion
We have covered some of the chain activities and trading data of BTC and ETH derivatives , and it seems that it is still not easy to make a simple call on which asset is a better buy right now. However, it appears that BTC traders have been more optimistic about the price in the long term, while ETH traders have been more focused on short term price actions. Nevertheless, traders and investors should be flexible in their trading strategies and adjust their configurations according to market conditions.
