According to a new report from CryptoQuant, analyst XWIN Research Japan indicates that on-chain data is showing signs of weakness in BTC's price action, completely contrasting with the positive outlook for ETH.
Currently, the amount of BTC reserves on exchanges remains around 2.53 million BTC, showing almost no decreasing trend despite strong price fluctuations. In the past week, BTC has dropped 5.4%, from 123,000 USD to 113,000 USD.
History shows that when the reserve amount on exchanges decreases, short-term selling pressure also diminishes as investors move BTC to cold wallets for long-term holding. However, the fact that the current reserve amount remains 'stagnant' reflects that the supply of BTC ready for sale is still quite large – a warning signal for potential short-term adjustment risks.
In contrast to BTC, ETH is witnessing continuous and strong outflows from exchanges. Notably, outflows exceeding 300,000 ETH occurred at the end of July and mid-August. According to XWIN Research Japan, this indicates that ETH is being transferred to cold storage, staking, or institutional custody – contributing to the tightening circulating supply in the market.
The current ETH price is trading in the range of 4,150 – 4,400 USD, aligning with the trend of capital withdrawal and reinforcing the argument about the potential occurrence of a supply shock in the near future.
BTC – High Liquidity, ETH – Strong Institutional Demand
In addition to the reserve factor, many other indicators also emphasize the deep downside risk of BTC and the increasing institutional interest in ETH.
Famous analyst Xanrox even predicts that BTC could drop to 60,000 USD, equivalent to a nearly 50% decrease from the current price – a shocking scenario if it occurs.
Conversely, Ethereum 'whales' continue to expand their buying positions, with a notable recent transaction being a large wallet opening a long position of 300 million USD ETH on-chain. The relative strength of ETH compared to BTC is clearly improving.
Technically, ETH is also maintaining a positive trend with the potential to reach the resistance level of 4,788 USD in the short term. Meanwhile, at the time of writing, BTC is trading at 112,283 USD, down 0.7% in the last 24 hours.
Conclusion
The divergence in price behavior and on-chain data of BTC and ETH indicates that capital flow in the market is gradually shifting. BTC may face short-term adjustment pressure as liquidity remains high, while ETH benefits from the accumulation demand of institutions and the tightening supply trend.
Given the current situation, ETH is emerging as a more attractive option compared to BTC at this stage, especially for investors seeking strong growth potential in the upcoming cycle.
