Is there any truth to the 'alt exodus' rumours?

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Ibis
May 8, 2020

Takeaways:


  • Analyzing the exchange inflow data for some of the top-cap alts to examine the growing talk of investor-led altcoin exodus
  • Assets covered: ETH, XRP, LINK, KNC, REP, ZRX, REN, ENJ
  • Metrics used: Exchange inflow, Top holders, Holder distibution, Social trends, Social data feed


The anti-alt wave seems to be gaining steam on crypto social media, as many of the top 25 assets have been trading down against their BTC pairs in the past 48 hours.


The ongoing decoupling has briefly turned the spotlight from the upcoming BTC halvening to the rest of the market, making ‘alts’ one of the biggest trending topics on crypto social media today:

Today's biggest talking points on crypto social media (Source: Sanbase)

For many, the price trend is growing proof that the current BTC upswing is propelled by traders fleeing en masse from altcoins and into the top cryptocurrency, as Bitcoin prepares to slash its block rewards come next Tuesday.


To illustrate the ongoing community divide, I’ve outlined some of the latest ‘alts’-related mentions on crypto social media, as captured by our system and available in real time on Sandata:

While both sides are represented, the momentum seems to fall squarely on the side of the no-alt crowd as inch closer to the halvening. But is there any proof to support this theory?


To look for clues of the rumoured capital flight, let’s check in on the recent on-chain activity and holder behavior of some of the market’s top altcoins, starting - of course - with the second in command.


If speculators were rushing to convert their alt bags into BTC, we’d likely expect some measure of elevated inflow of said alts to exchange wallets, right?


To test this, let’s peek at a 30-day inflow of ETH to centralized exchanges:

Ethereum's exchange inflow, last 30 days (Source: Sanbase)

As you can see, the last 24 hours have in fact seen some relatively high exchange-related activity for Ethereum, with more than 150,000 ETH (~$32,140,000) moving to centralized exchange wallets.


Although large, the latest spike in ETH's exchange inflow hasn't had an overly dramatic effect on the amount of ETH located in centralized exchange wallets, which continues to hover at around 17% of the coin's total circulating supply:

Percent of ETH's total supply located on exchanges, YTD (Source: Sandata)

The above spike in ETH's exchange inflow seems to be in line with a 'slight' dip of ~120,000 ETH in the collective bags of the biggest non-exchange addresses (aka whales) holding Ethereum:

Collective amount of the top non-exchange addresses holding ETH, last 3 months (Source: Sandata)

To put the dip into broader context, however, it's worth pointing out that - even with the drop - these addresses are, collectively, still up by 220,000 ETH in the last 72 hours alone.


Still, this could indicate some 'early jitters' developing among certain ETH holder groups.


The speculative mood looks less exaggerated with the 3rd-largest coin, however, as Ripple’s exchange inflow has maintained its standard levels over the past 30 days:

Ripple's exchange inflow, last 30 days (Source: Sanbase)

There are sparse signs of panic in the on-chain activity of some of the top ERC-20 coins as well. The Chainlink speculators, for one, appear to be relatively dormant as of late, with the most recent spike in LINK’s exchange-bound activity recorded over 2 weeks ago:

Chainlink's exchange inflow, last 30 days (Source: Sanbase)

Similarly, LINK’s biggest non-exchange addresses have so far showed little intent on reducing their (massive) position, and continue to firmly hold to around 755,000,000 LINK at the time of writing:

Collective amount of the top non-exchange addresses holding LINK, YTD (Source: Sandata)

The same pattern of calm speculative waters repeats in a number of other alts - too many to fit into one article, so here’s just 3 more to illustrate the point:

KNC's exchange inflow, last 30 days (Source: Sanbase)
ENJ's exchange inflow, last 30 days (Source: Sanbase)
REP's exchange inflow, last 30 days (Source: Sanbase)

Of course, this is not to say that there aren’t exceptions to the above. After all, ‘alts’ are not a monolith - no matter what your neighborhood Bitcoin maximalist says.


That’s why it’s not a big surprise to also see a rising exchange inflow in certain ERC-20 coins - like ZRX, for example - in the past 24-48 hours:

ZRX's exchange inflow, last 30 days (Source: Sanbase)

Unlike many other altcoins on the list, ZRX is having a juicy pump of its own, which should go some ways to explaining the rising speculative activity as well.


Similarly, REN has also experienced some major jumps in exchange-bound flows in the past 3 days, right around the time that the ‘capital flight’ discussion was starting to percolate:

REN's exchange inflow, last 30 days (Source: Sanbase)

However, even with these and the latest ETH-related spike in exchange inflow, the on-chain activity of many of the top-cap altcoins has yet to truly reflect this growing notion of a systemic, halvening-related exodus impacting most of the major alts.


That said, I’d keep an eye on the exchange inflow trends for altcoins and BTC alike. Grounded in reality or not, the crowd is prepping for some major volatility in the pre-halvening days.


It pays to keep track of when/if the network participants start feeling the same way.

ethXRPLINKKNCENJ
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Ibis
May 8, 2020

Thanks for reading!

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