Glassnode, an onchain analytics firm, has published a new report that highlights the contrasting performance of bitcoin and ethereum during the 2023-24 cycle. The report emphasizes bitcoin's resilience and ethereum's struggle to generate speculative interest and price performance.
Glassnode researchers have observed a significant divergence in the performance of bitcoin (BTC) and ethereum (ETH), with BTC demonstrating stronger resilience. According to the latest Glassnode onchain report, "Ethereum's under-performance this cycle relative to bitcoin is reflected in a measurable lag in speculative interest from the short-term holder cohort." This disparity has been attributed to a weaker capital rotation trend for ether compared to previous cycles.
The report goes on to explain that the fourth Bitcoin halving initially triggered a sell-off, causing BTC prices to drop to $57,000 before recovering. Glassnode stated, "Measured from the $73,000 all-time high, bitcoin prices corrected by -20.3%, which is the deepest correction on a closing basis since the FTX lows in Nov-2022." In contrast, ether experienced a similar drop but suffered a maximum drawdown twice as severe as BTC.
Despite the initial sell-off, both BTC and ETH showed signs of recovery. However, ethereum's price performance continued to lag behind bitcoin. Glassnode researchers noted, "For ethereum, we continue to see ongoing HODLing behavior, particularly in the 1 to 3-year cohorts," indicating that seasoned holders are adopting a wait-and-see approach due to ETH's current under-performance.
Additionally, investor behavior differed between the two assets. Bitcoin's net unrealized profit/loss (NUPL) metric entered the euphoria phase three months earlier than ethereum's, reflecting a faster expansion of unrealized profits among bitcoin holders. Glassnode's analysis suggests that the disparity in performance and investor sentiment is likely influenced by the approval of spot bitcoin exchange-traded funds (ETFs), which has not yet been mirrored for ethereum.
To read Glassnode's complete study, click here.
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