- Ethereum’s Hot Realized Cap remained relatively stagnant after the 2022-2023 bear market, indicating lower demand compared to Solana.
- Solana’s market momentum in 2023 coincided with a rise in its Hot Realized Cap, demonstrating strong demand.
- Ethereum’s recent outperformance has been accompanied by a surge in its Hot Realized Cap, signaling a resurgence of demand.
Ethereum, often dubbed as the pioneer of smart contracts has faced competition from other altcoins like Solana. While SOL experienced a period of strong demand, ETH’s demand was relatively stagnant. However, a recent surge in its Hot Realized Cap suggests a resurgence in the world’s largest altcoin.
A recent report by Glassnode analyzes the demand-side momentum of two major cryptocurrencies- SOL and ETH, by examining a metric called “Hot Realized Cap.” This metric measures the amount of cryptocurrency held by active accounts within the last seven days. Essentially, it monitors the capital flowing into and out of the market through recent activity.
The report noted that Solana recorded a surge in its Hot Realized Cap beginning in early October 2023, in tandem with its positive market momentum. On the other hand, Ethereum’s Hot Realized Cap did not exhibit a significant spike following the 2022-2023 bear market floor, indicating that demand for SOL outpaced ETH for a considerable portion of 2024.
However, the recent period of Ethereum outperforming Solana has been accompanied by a surge in ETH’s Hot Realized Cap, commencing in early November 2024. This suggests that new demand is returning to Ethereum.
Ethereum Outperforms Solana, Breaking Key Support
In short, this analysis of Hot Realized Cap offers valuable insights into the shifting demand dynamics between Solana and Ethereum, highlighting the evolving investor sentiment and capital flows within the cryptocurrency market. Price-wise, the ETH/SOL pair has seen a dramatic shift, with the former reclaiming dominance.
In a move that caught market watchers off guard, the pair broke below the 0.058 support level on the weekly chart. This unexpected turn has prompted some traders to shift their holdings from SOL to ETH. Analysts expect this trend to continue in the coming months, potentially benefiting other altcoins as well.
