On-chain data reveals that Bitcoin and Ethereum exchange supplies have diverged recently, indicating a possible rotation.

Bitcoin’s Exchange Supply Decreases While Ethereum’s Increases

According to Santiment, an on-chain analytics firm, Bitcoin’s "Supply on Exchanges" metric has fallen to its lowest level since December 2021.

The "Supply on Exchanges" tracks the amount of a cryptocurrency held in centralized exchange wallets. An increase in this metric indicates that investors are depositing assets onto exchanges, often for trading purposes. Conversely, a decrease suggests that investors are withdrawing their assets, likely to hold them for the long term.

Chart Analysis: BTC, ETH, and USDT Trends

The chart shows the trends for Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) supplies on exchanges. Bitcoin’s supply on exchanges has significantly decreased in recent months, now at 942,170 BTC, the lowest since December 2021. Meanwhile, Ethereum and Tether have seen net deposits.

Ethereum's supply on exchanges has reached 17.98 million ETH, and Tether’s is at 16.04 billion USDT. These deposits could indicate that investors are rotating capital into Bitcoin from Ethereum and Tether, perceiving ETH as riskier. Tether, being a stablecoin, is less affected by these inflows and generally indicates that investors are preparing to reinvest in the market.

Market Implications

Despite Bitcoin's bullish on-chain data, its price has been consolidating sideways over the past few months. Currently, Bitcoin is priced around $67,900, down almost 5% over the past week.