Research Study
Q3 2023 Signals Report
A quarterly breakdown of key market metrics that could be impacting price and investor sentiment
by Fidelity Digital Assets
October 20, 2023 • 25 min read
As of the end of Q3 2023, the data suggests some worry in the near term, but an overall positive outlook for both bitcoin and ether in the longer-term.
Bitcoin, up roughly 65% year-to-date, has broken below important short-term support levels. Long-term holders’ net position continues to rise as the drop below $30,000 may be enticing this group to buy. We also continue to see bitcoin leaving exchanges as we approach a 30% reduction from the exchange supply peak of 2020. The reduction in supply on exchange will be a key metric to watch as we end the year and highlights the importance of other custody options, such as self-custody or the use of a regulated third-party custodian, such as Fidelity Digital Assets℠.
Ether, up roughly 40% year-to-date, is seeing short-term negative price signals, but growing on-chain metrics. The network continues to maintain a higher rate of burn than issuance, resulting in just under 300,000 ether being removed from the network since The Merge was implemented almost exactly a year ago. The number of validators staking on the network has seen a strong increase, up 28%.
Read more to learn what metrics we are watching and what they may be telling us.
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