January was a turbulent month for the crypto space as market participants saw a sell-off. Continued uncertainty over the US Federal Reserve’s proposed rate hikes in March and rising tensions in Eastern Europe plagued the market for most of February, although prices rallied towards the end of the month. While such macroeconomic skepticism makes it difficult to separate the signal from the noise, analysis of on-chain data can provide more insight into the underlying crypto fundamentals.

The latest Kraken Intelligence report, sitting tighttake a closer look at on-chain metrics and indicators to explore where the market is today and what may be to come in the crypto space.

BTC and ETH input

On-chain metrics such as net exchange flows show that BTC and ETH posted net inflows in February, increasing their tradable supply. This indicates that market participants may be moving their BTC and ETH out of cold storage to potentially trade them on exchanges. However, while BTC’s bearish momentum appears to be fading, the opposite is true for ETH.

mining uncertainty

Bitcoin miner optimism appears to be slipping amid market uncertainty, as evidenced by a recent drop in hash rates, an expected negative mining difficulty adjustment, and a pullback in the Puell multiple.

Bullish on ETH, bearish on BTC

According to various on-chain indicators, the sentiment is bearish for BTC and potentially bullish for ETH at the moment. Specifically, BTC’s Spent Earnings Ratio (SOPR) indicates that market participants are selling BTC at a loss and ETH’s Market Value of Realized Value (MVRV) suggests that it was oversold in February.

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

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