The state of crypto – October 2022 The state of crypto – October 2022 The state of crypto – October 2022

The state of crypto – October 2022

Cryptocurrencies 4 minutes to read

Summary:  In the month of September, Bitcoins kept flowing out of exchanges, whereas the percent of Ether stored on exchanges has not changed despite a large spike in deposits. For both Bitcoin and Ethereum, it seems that the circulating supply is rotating from institutional to retail investors.


Immediately upon interacting with a blockchain, much data becomes publicly available on a public ledger. Analyzing this data may provide crypto traders and investors with helpful insight into the present state of the market. In “The state of crypto”, we take a look at the most important metrics to observe the market based on transaction and trading activity. Our main focus is the two largest cryptocurrencies Bitcoin and Ethereum, and we divide the metrics into short-term and long-term indicators. You find the report for the last month here.

Short-term

Bitcoin experienced a small net outflow from exchanges from around 9.1% to 8.9% of the total Bitcoin supply. This may indicate that fewer Bitcoin holders are considering selling in the imminent future. The supply of Ethereum on exchanges is identical at 14%. Yet, both cryptocurrencies were heavily deposited to exchanges during September likely due to the price declines alongside the increased volatility early in the month.

Despite the high volatility, it seems that fewer Bitcoins that had not been moved in 365 days were transferred in the past month. This may hint that most long-term Bitcoin holders are not interested in selling at these prices. On the contrary, more Ether were moved that had not been moved in 365 days, but this is likely mostly because of the Ethereum merge, at which event many Ethereum holders were more comfortable holding Ether on exchanges contrary to their own wallets.

For Bitcoin, the supply shifted from Bitcoin-rich wallets to wallets with fewer Bitcoins, as an increasing part of the total supply is kept by wallets storing between 0 – 10 BTC. In that connection, wallets containing between 10 – 1,000 and +1,000 BTC declined in importance, although they still store the majority of the total Bitcoin supply. Wallets storing between 0 – 10 ETH also rose in weight. This may suggest that retail investors are accumulating Bitcoin and Ether, whereas institutional investors are selling. If that is a correct observation, only time will tell which party is on the right track.

Exchange Balance in Percent. During times when crypto investors are more inclined to sell crypto, they often store their cryptocurrencies directly on an exchange to prepare to sell their holdings. On the contrary, they often move the funds to private wallets when they are less likely to liquidate them. In other words, low exchange balances on exchanges are often perceived as valuable for a potential upward trajectory. Source: Santiment
Dormant Circulation. Shows how many Bitcoins and Ether were moved after not being moved for at least 365 days prior to that – accumulated on a daily basis. A high number may express eagerness from long-term holders to liquidate their portfolios. Source: Santiment
Supply Distribution for BTC. This illustrates the supply distribution in percent of Bitcoin and Ethereum based on the amount addresses hold. This may indicate which groups are buying or selling, for instance, whether whales are selling or buying. Source: Santiment
Supply Distribution for ETH. Source: Santiment

Long-term

The circulating supply of Bitcoin and Ethereum that has been moved over the past 5 years continues to decline. This suggests that the circulating supplies are less than the total supply of both Bitcoin and Ethereum, since many no longer have access to their cryptocurrencies, minimizing potential sell pressure. More, it indicates that no large inactive whale has suddenly turned active by moving Bitcoins or Ether recently which could push prices down.

The average Bitcoin holder is estimated to be slightly less underwater than last month from 28.3% to around 26.5% in loss. Though, the price decline in Ether is estimated to have been tough to Ether positions, as Bitcoin and Ether holders are nearly as much underwater now.

The outflow out of exchange-traded crypto products e.g., ETPs and mutual funds has been rough to Ethereum. The second-largest cryptocurrency recorded an outflow of $65.1mn, whereas Bitcoin recorded a minor inflow equal to $3.2mn. Based on the outflow for Ethereum, it seems that “buy the rumor, sell the news” was also present in exchange-traded products in regard to the Ethereum merge.

Circulating Supply (5 years). For Bitcoin and Ethereum, there are continuously issued new Bitcoins and Ether to the supply, respectively. However, it may be the case that someone is permanently unable to access their wallet, which means the supply technically is lower. By looking at Bitcoin’s and Ethereum’s supply that has moved in the past 5 years, we might better interpret the authentic supply and whether large inactive wallets suddenly turn active. Source: Santiment
Market Value to Realized Value (MVRV) Ratio (5 years). The market value to realized value ratio (MVRV) calculates the average profit or loss of all holders based on when each token last moved over the past 5 years. For example, if the MVRV ratio is 1.5, holders are on average estimated to be up by 50%. Source: Santiment
Daily Active Addresses. This expresses the amount of active Bitcoin and Ethereum addresses daily. It illustrates the utilization of the two blockchains, respectively. It is perceived as valuable with many active addresses.
Inflow and Outflow in ETPs, mutual funds, and OTC trusts. CoinShares publishes a weekly report on inflow or outflow into crypto ETPs, mutual funds, and OTC trusts. Since these products are particularly popular among more traditional investors, an inflow or outflow may describe the sentiment among this group of crypto investors.
Bitcoin/USD - Source: Saxo Group
Ethereum/USD - Source: Saxo Group
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