Analysts Identified Signals of a Possible Continuation of the Bitcoin and Ethereum Rally

• Santiment experts recorded a 73% drop in Ethereum reserves on exchanges from the 2020 peak.
• CryptoQuant sees the rise in LTH SOPR as a signal that bitcoin is shifting into an uptrend.
• Analyst Darkfost noted that short-term holders have been mostly in profit for nearly a month.

Crypto analytics platforms Santiment and CryptoQuant have flagged several signals that may point to a shift in the market structure of bitcoin and Ethereum. These include a reduction in Ethereum’s liquid supply on exchanges, rising profitability among long-term bitcoin holders, and short-term holders remaining in the profit zone for an extended period.

Ethereum: exchange supply is shrinking

According to Santiment, around 6.06 million ETH is currently held on crypto exchanges. By comparison, in June 2020 this figure reached 22.9 million ETH.

As a result, the amount of Ethereum available on exchanges for potential selling has fallen by 73%. Santiment notes that fewer coins sitting near exchange order books reduces the volume of the asset that can be quickly sold into the market.

Analysts link the decline in exchange reserves to Ethereum being moved into staking, ETFs, treasury strategies, and long-term custodial storage. Some coins are also locked up by validators to support network operations.

In Santiment’s view, under these conditions it may take a smaller amount of new demand to push the price higher, because there is less supply available for sale.

Large bitcoin holders are reducing their reserves

Separately, Santiment drew attention to a shift in bitcoin holder behavior. Over the past three weeks, during which bitcoin has held above $80,000, market sentiment has moved from caution to actively chasing the upside.

Wallets with balances from 10 BTC to 10,000 BTC, which Santiment classifies as key cohorts for assessing market dynamics, reduced their holdings by 0.20% over this period.

At the same time, retail holders with balances below 0.01 BTC changed their behavior. After a period of selling, they began gradually accumulating bitcoin. Their holdings have increased by 0.09% since the peak of FOMO.

Santiment noted that this combination — large holders cutting positions and retail investors buying — has historically often been observed near locally overheated tops.

Analysts also stressed that this does not guarantee a price drop. According to them, a stronger confirmation is needed for the rally to continue, while bitcoin remains in the $75,000–$80,000 range.

CryptoQuant: Bitcoin’s real rally may only be getting started

CryptoQuant drew attention to the LTH SOPR metric — the spent output profit ratio for long-term holders. According to the platform, it has risen above 1. Analysts believe this indicates the market is shifting from a bearish phase to a neutral state and the start of an uptrend.

At the same time, CryptoQuant notes that in the current cycle, LTH SOPR has not yet exceeded the 6 level. Historically, cyclical tops have formed near this level.

Analysts also pointed out that long-term holders still have not gone through a large-scale profit-taking phase. Their bitcoin holdings remain near all-time highs, and accumulation continued until recently.

Based on this, CryptoQuant believes the earlier price move was more of a preparatory phase, and a full-fledged bull rally may be unfolding now. Under this model, the cycle peak will be the zone of large-scale profit-taking, when LTH SOPR rises above 6.

STH have been holding profits for almost a month

Another positive signal for market structure was highlighted by analyst Darkfost. According to him, short-term bitcoin holders (STH) have, for the first time since the market peak, spent an extended period mostly in profit territory.

A similar episode was observed in January, but it lasted less than a week at the time. In May, losses among short-term holders remained dominant.

STH are now in the profit zone for almost a month. Their unrealized gains are estimated at about $168 billion, while losses stand at just over $100 billion.

Darkfost noted that during bear markets, STH returning to profit usually creates short windows for selling. If the price drops again, it triggers a new wave of losses and capitulation.

At the same time, short-term holders consistently holding onto profits may point to a shift in market structure. In the analyst’s view, that is exactly what is taking shape now. He added that Bitcoin holding above $80,000 would be an important confirmation of this trend.

As a reminder, earlier experts said that bitcoin’s rally could be unsustainable due to weak spot demand.

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