In recent months, crypto asset prices have become more stable, consolidating in a narrower price band. As volatility fell, analysis suggested a medium-term blowout move was imminent.

In late March, crypto assets finally broke through the upper level of this price band, although macroeconomic uncertainty regarding the Ukraine-Russia war in Eastern Europe still worries the market. While geopolitical tension and conflicting price action make it difficult to anticipate where the market is headed, on-chain data provides a clearer view of underlying crypto fundamentals.

The latest Kraken Intelligence report, Chopsolidationanalyzes on-chain metrics and indicators to explore network demand and supply dynamics that help shed light on the current state of the crypto market and what may happen in the future.

Supply Dynamics

On-chain metrics such as HODL waves, net exchange flows, and average lifetimes spent (ASOL) produced mixed signals for BTC, suggesting that long-term holding demand is dissipating while net outflows from BTC accelerated.

ETH also posted net outflows in March, reducing its immediately tradable supply following net inflows in recent months. This data indicates that market participants may be moving their BTC and ETH into cold storage for long-term holding.

state of the market

According to various on-chain indicators, the sentiment is potentially bullish for BTC and ETH, although it is still too early to tell.

While the BTC Earnings Earnings Ratio (SOPR) indicates that market participants are selling BTC at a profit after an extended period of losses, the ETH Market Value to Realized Value (MVRV) Z-Score suggests that the stock recent price increase has brought the asset out of oversold. territory.

Want to learn more about the on-chain activity in March and what lies ahead? Download the Kraken Intelligence report Chopsolidation where the team explores the crypto fundamentals and on-chain data that shaped the market in March.

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