Cryptocurrencies are trying to resist supply

Ethereum's transition to Proof of Stake is imminent which temporarily improves sentiment in the cryptocurrency market. The improvement, however, still seems to be bypassing Bitcoin, which may prove to be a sleeping giant and will again cool demand if it moves south:

• Bitcoin remains below $20,000, Ethereum has risen above $1,600;
• Ethereum is undergoing its last Bellatrix update today before 'Merge' . As part of it, the Beacon chain will merge with the ETH mainnet, the consensus algorithm will be changed to PoS. The developers have not reported any bug so far, which the market received positively. The next update will already take place during the 'merge' and it will be the 'Paris Upgrade'.
• Ethereum's network throughput will increase to 1,000 or 1,500 transactions per second in real terms, from the current 20. Ultimately, Ethereum is expected to be able to process 100,000 transactions per second;
• After the completion of the Merge, which still looks risky, the Ethereum project will be 80% finished according to information from the developers' website;
• Miners mining Bitcoins with so-called 'diggers' have been hit by a spike in electricity prices. Bitcoin's crypto minig yield has fallen nearly 70% since the beginning of the year and is at 2020 lows, according to Bitinfocharts. Rising electricity prices may weigh on the activity of miners in cryptocurrency ecosystems based on the PoW 'Proof of Work' consensus method;
• Short-term addresses aggressively accumulated Bitcoin between June and August by making the current Bitcoin price volatility a test of the conviction of the most willing investor group. If this proves insufficient to stem declines and the group contributes to increased supply, a further downward price reaction remains unlikely.

The chart shows the cumulative net inflows and outflows (supply and demand) from so-called HODLers, i.e., addresses holding Bitcoins purchased by addresses that have not disposed of reserves for at least the past six months. Over the course of November 2020 and May 2021, registered sales of 394,000 BTC held by long-term holders who aggressively sold during the bull market. From May 2021 to September 2022, we noted the impact of 394 thousand BTC, which 'patched' the hole left by the previous distribution. The accumulation of HODLers confirms the still relatively strong belief in Bitcoin's future among investors with potentially the highest level of conviction and experience. The market probably needs to test the conviction level of short-term traders, who were particularly aggressive in their purchases between June and September this year. Source: Glassnode

The chart shows the change in net position of HODLers. This metric can be used to verify the monthly change in HODLed supply, with two potentially interesting phases during this cycle. At its peak in November 2020 and April 2021, HODLers disposed of as much as 150,000 BTC per month.  HODLers accumulated tokens throughout the second half of 2021 and continue to do so to the present. We are now seeing record Bitcoin accumulation by HODLErs at up to 70 thousand BTC per month, which is the largest monthly change in the position of this group of holders since March 2020, when we were observing pandemic-induced declines. Source: Glassnode

Bitcoin chart, H4 interval. The price of Bitcoin has been consolidating in a sideways trend for nearly 2 weeks, which in the past has usually heralded an upcoming big price move. Source: xStation5Chart of Ethereum, H4 interval. Ethereum is doing noticeably better than Bitcoin, although the RSI is dangerously fast approaching levels at 70 points, which in the past have usually heralded an impending correction. Source: xStation5