These two cryptocurrencies are still likely to rebound due to the supply side liquidity crisis. Bitcoin and Ethereum are moving out of the exchanges. In view of this trend, chain analysts believe that the prices of both cryptocurrencies are likely to rise.

Signs of bubbles

In the bullish stage, the market is booming and the cycle is cooling down. Altcoin prices rose and entered a similar bubble market. Traders recognize the top and correction cycles, each forming higher highs and lows. In the end, the market ran out of power, and the local top management became the top management handed down from generation to generation. In this process of subversion, liquidity flows to Shanzhai currency, resulting in the lack of fundamental abnormal returns. With copycat money showing irrational prosperity, these are signs of a return to the bubble. For example, stellar's blockchain fell briefly yesterday, but its original token, XLM, kept its 25% rise from the previous day. At the same time, although the securities and Exchange Commission (SEC) filed a pending securities case, XRP still reached $1. However, the analysis of the top two (cryptocurrency chain) markets has not yet reached the peak.

Ethereum liquidity crisis

Benjamin Lilly of Jarvis labs, an on chain research firm, charted the relationship between reducing exchange supply and Ethereum prices. According to Lilly, ETH "is preparing for a historic process." He found that the balance of Ethereum on the exchange decreased by 44% in 2017, and users extracted eth into their personal wallets. This time, supply to the exchange is down by 25%. In addition, Ethereum's total supply has increased by 38% compared with the previous one, which means that the overall liquidity of suppliers is greater. In addition, the exchange is not the only entity holding eth. Other illiquid eth's are locked in the defi app (11.5 million eth's), grayscale's reserve (3.17 million eth's) and Ethereum 2.0's beacon chain (3.7 million eth's). A total of 18 million ethereums (15% of the total supply) have been locked in. Lilly predicts that demand is increasing and has an explosive effect on prices. This is due to the unethical management of the US dollar, the growth of institutional demand due to the gray effect, and the widespread acceptance of cryptocurrency by NFTs, stable currency and other fintech applications.

Bitcoin continues to buy

Similarly, bitcoin shows no sign of the top of the long-term cycle. Bitcoin's age range indicator has been a powerful indicator of market performance in the past. The metric, also known as hodl wave, separates bitcoin addresses based on the last deposit and withdrawal time.

A wider short-term supply band indicates excessive buyer activity, which occurs before two approaches to the top of the market. "36% of the supply has been active in the past 180 days, but still well below the peak of about 50% in January 2018," wrote Nate maddrey of coinmetrics Maddrey draws similar conclusions from the other two indicators: market value and realized value (MVRV) and cost output ratio (SOPR). In addition to this trend, a large number of bitcoins have left the exchange in the past two days as BTC fell below $59000. The intensified liquidity crisis driven by strong demand intensified the upward pressure after short-term integration.

(2021-4-10)