Ethereum (ETH) has outpaced Bitcoin (BTC) in terms of long-term holder ratios, with a notable 74.7% of Ethereum addresses now belonging to long-term holders. This figure surpasses Bitcoin’s long-term holder ratio, which stands at just over 60%.

This trend, revealed by data from the on-chain analytics platform IntoTheBlock, highlights a growing preference among investors to retain their Ethereum assets for extended periods. The increase in long-term holders reflects mounting confidence in Ethereum’s future trajectory, as many investors believe in its long-term value.

A Growing Trend for Ethereum

The data compiled by IntoTheBlock suggests that the number of long-term Ethereum holders has steadily risen throughout 2024, climbing from 59% at the start of the year to 75% by the end of 2024. In contrast, Bitcoin’s long-term holder percentage has steadily declined over the same period, falling from 70% to 62%.

This divergence between Ethereum and Bitcoin holder behavior suggests a shift in market sentiment, with Ethereum holders demonstrating greater confidence in holding their assets for the long term. Ethereum’s performance has likely played a role in this growing confidence, as the cryptocurrency continues to capture attention for its use cases beyond just being a store of value.

Bitcoin’s Declining Holder Sentiment

Bitcoin, traditionally viewed as the dominant cryptocurrency, has seen a decline in its long-term holder ratio. This decline coincides with Bitcoin’s recent price fluctuations, including a brief plunge below $92,000 earlier this week. Although the price has since recovered slightly, trading above $94,000, Bitcoin’s Funding Rate, a metric indicating demand in the derivatives market, remains low.

CryptoQuant, a blockchain analytics platform, pointed out that for any price rally to be sustainable, there must be strong demand reflected in rising Funding Rates. The recent rally in Bitcoin was marked by a delayed increase in these rates, signaling weaker market demand. As Bitcoin’s price was rejected at the $108,000 resistance level, the Funding Rates dropped sharply, further indicating a lack of strong market sentiment.

Ethereum’s Growing Confidence

In contrast to Bitcoin’s weakening momentum, Ethereum continues to show strong potential, as reflected by the rising number of long-term holders. The ongoing trend suggests that investors are increasingly confident in Ethereum’s future, especially with its position as a leading smart contract platform and its potential for future upgrades.

As Ethereum’s holder ratio grows, many anticipate that the altcoin could rally toward its previous all-time high, which could trigger profit-taking behavior among some holders. However, until that point, Ethereum’s long-term holders are likely to remain steady, contributing to the overall bullish outlook for the cryptocurrency.

Bitcoin Faces Potential Correction

While Ethereum’s future looks promising, Bitcoin is facing potential challenges. The recent dip below $92,000 raised concerns about Bitcoin’s ability to maintain upward momentum. If Bitcoin fails to hold above the critical $90,000 support level, it risks facing increased selling pressure, which could lead to deeper corrections in the market.

Despite the fluctuations, Bitcoin remains a dominant force in the cryptocurrency market. However, Ethereum’s growing number of long-term holders suggests that investors are beginning to see the potential for significant value in Ethereum, particularly as it continues to evolve and expand its use cases.

Conclusion

Ethereum’s rise in long-term holder ratios, surpassing Bitcoin, reflects a shift in investor sentiment. With Ethereum’s strong use case and ongoing developments, more investors are choosing to hold onto their ETH, signaling growing confidence in the altcoin’s future. In contrast, Bitcoin’s decline in long-term holders, combined with low Funding Rates, suggests that its market sentiment may be weakening. As both cryptocurrencies continue to evolve, it will be interesting to see if Ethereum can maintain its lead in this regard and if Bitcoin can regain the confidence of its long-term holders.