The state of crypto – February 2023 The state of crypto – February 2023 The state of crypto – February 2023

The state of crypto – February 2023

Mads Eberhardt

Cryptocurrency Analyst

Summary:  The prices of Bitcoin and Ethereum have increased by 38% and 36%, respectively, year to date. The higher prices have not caused exchange balances to increase, as exchange inflow has been somewhat limited, potentially indicating that few holders are inclined to sell at these levels. Exchange-traded crypto products had a high inflow in January, potentially indicating that traditional investors have lightly returned to crypto.

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.


The prices of Bitcoin and Ethereum have increased by around 38% and 36% year to date, respectively, as the risk-on sentiment was revised across asset classes, following wide-ranging confidence that the FED and other central banks sooner rather than later put an end to interest rate hikes and quantitative tightening.

It appears that the substantial upward price move between the 10th to 14th of January caused some holders to deposit Bitcoin and Ethereum to exchanges likely to take profit, given that the exchange inflow surged in that period. Since this spike, the daily inflow has been on a constant downward trajectory, although the prices have increased further since the surge in mid-January. This may indicate that weak hands have already taken profit, potentially indicating limited resistance at these levels, as stronger hands are not interested in selling at these prices. As a matter of fact, long-term holders did not attract much attention on-chain in January, as not much dormant supply moved, stressing that the price increases are not of importance to them.

The limited exchange inflow has caused the total exchange balance to decrease slightly in the past couple of weeks, with the latter often indicating less willingness to sell crypto. To be fair, though, it may merely be a continuation of the outflow trend of the last couple of months in which holders have minimized counterparty risks by withdrawing from exchanges, upon the collapse of FTX.

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
Exchange Inflow. This metric solely concerns the total deposit of Bitcoin and Ether to exchanges without considering the withdrawal of funds. By only considering deposits, we may better interpret what leads to sell pressure. 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


The price surges in January have considerably improved the average profit or loss of Bitcoin and Ethereum holders, given that the MVRV ratio of both cryptocurrencies is now closer to 0. The greater profit or loss may provide holders with much needed-relief but it may also cause some to close positions, as they are closer to their entry.

In January, exchange-traded crypto products ended a negative period by encountering a substantial inflow equal to $154mn until the 27th of January, of which $124.8mn was inflow to Bitcoin and $9.1mn was inflow to Ethereum. Similar to much of 2022, this once again expresses that Bitcoin is more popular to hold as an exchange-traded product rather than Ether. The great inflow into exchange-traded crypto products indicates that more traditional investors want to have exposure to crypto, yet it is potentially merely an expression of fear of missing out.

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.
Source: Saxo Group
Source: Saxo Group

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (
- Full disclaimer (

Boulevard Plaza, Tower 1, 30th floor, office 3002
Downtown, P.O. Box 33641 Dubai, UAE

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.