TLDR:

• • Bitcoin’s realized cap monthly growth has returned to +0.25%, ending a steep -2.6% decline recorded in February 2025.
    
  • The February correction triggered realized losses as investors who bought BTC at higher prices exited their positions.
    
  • The downturn reflected a weak-to-strong hands transfer, with patient buyers absorbing supply from loss-realizing sellers.
  • Analysts now watch whether rising profit-taking will slow recovery or if fresh demand will sustain the positive cap trend.

Bitcoin’s realized cap has moved back into positive monthly growth, posting a gain of +0.25% after a steep decline.

This shift follows a difficult correction period that pushed the metric to -2.6% in February. The realized cap tracks the difference between realized profits and realized losses in the market.

It is considered one of the clearest measures of capital movement. Analysts are now watching closely to see whether the trend can hold as market conditions improve.

Realized Cap Drop Reflected Investor Losses During Correction

The February decline in Bitcoin’s realized cap came as investors sold holdings at a loss. Many of those investors had purchased BTC at higher price levels earlier in the cycle. As selling pressure grew, the realized cap pulled back sharply, reflecting capital destruction in the market.

Crypto analyst Darkfost explained the pattern on X, noting that the realized cap measures “the difference between realized profits and realized losses.” During the downturn, this balance tilted heavily toward losses. That shift dragged the monthly growth rate deep into negative territory.

The correction phase also produced a shift in ownership. Investors unwilling to absorb further losses exited their positions and transferred holdings to buyers at lower prices.

This process is commonly referred to as a transfer from weak hands to strong hands. It is a pattern that has appeared in previous Bitcoin market cycles.

Even so, overall sentiment during the correction remained cautious. New capital did not immediately return to the market after prices fell. Buyers waited for valuations to reach levels they considered attractive before committing fresh funds to Bitcoin.

Positive Shift Suggests New Capital Is Returning to Bitcoin

Now that the realized cap has turned positive again, the market dynamic appears to be changing. According to Darkfost, “investor sentiment is improving as capital begins flowing back into the market.”

That change is reflected in the monthly growth figure moving above zero for the first time since the downturn.

The +0.25% reading is modest on its own. However, coming directly after a -2.6% monthly decline, it carries weight as a directional shift. Analysts tend to look at this kind of recovery as an early sign that buyers are returning with confidence.

Capital inflows at this stage often reflect improved sentiment among both retail and institutional participants. When new money enters the market, it tends to push realized profits higher. That, in turn, supports further growth in the realized cap over subsequent months.

The central question, as Darkfost noted, is whether this recovery can continue as more investors take profits. If selling pressure increases alongside rising prices, the growth rate could stall again. However, if demand absorbs that supply, the realized cap is likely to continue its upward trend.

Ethereum’s native token, Ether (ETH), has dropped more than 35% versus Bitcoin (BTC) over the last 12 months, a slide that market observers say could have further to run if technical and on-chain signals play out. The underperformance comes as Bitcoin continues to attract corporate interest and mainstream adoption, while Ethereum faces a mix of liquidity and momentum headwinds that have tempered its rally narratives.

Key takeaways:

• ETH/BTC remains trapped below a multi-year descending trend line that has capped breakouts since 2022, with a potential 40% downside target toward 0.0176 BTC if the weakness persists into 2026.
• Binance ETH reserves climbed to 3.62 million ETH as of May, about 24.6% of all Ether held on exchanges, signaling higher near-term selling risk, according to CryptoQuant data.
• Bitcoin reserves on Binance have fallen, highlighting divergent exchange liquidity trends between the two assets.
• The broader market narrative, including Ethereum’s lingering “ultrasound money” momentum and BTC’s growing institutional interest, continues to shape relative performance and risk sentiment.

ETH-BTC: technical setup points to extended weakness

ETH/BTC has remained entrenched beneath a long-standing descending trend line that has constrained every major breakout since 2022. The pattern mirrors a similar setup that preceded the steep drop from late 2024 into 2025, suggesting the same structural pressure could reassert itself if BTC and ETH fail to find fresh demand.

In August 2025, ETH/BTC briefly retested the trend line, only to be repelled at a convergence zone that included the 0.382 Fibonacci retracement and the 50-month exponential moving average. Since then, the pair slid back below the 20-month moving average, which now acts as a resistance-turned-signal of selling pressure around the 0.034 BTC level.

The chart implies a potential objective around 0.0176 BTC if selling continues, a level that would represent roughly a 40% decline from recent prices and aligns with the 2020 cycle bottom. Traders watching the eth/btc ladder see this as a crucial test of whether Ether can regain tempo or if Bitcoin’s uptrend remains the dominant driver of market risk appetite.

On-chain and exchange signals paint a mixed liquidity picture

On-chain data from CryptoQuant highlights a notable divergence in exchange balances between ETH and BTC. Ether reserves on Binance—the world’s largest crypto exchange by volume—have risen to 3.62 million ETH as of May, accounting for about 24.6% of all Ether held on crypto exchanges. This increase in available ETH suggests more supply could be poised for sale if buyers do not absorb it in the current market environment.

In contrast, Bitcoin reserves on Binance have fallen, signaling tighter exchange-side liquidity for BTC. The opposite dynamics—rising ETH supply versus diminishing BTC supply on exchanges—help explain, at least in part, the ongoing divergences in price action between the two assets.

Higher exchange balances for ETH often translate into greater near-term selling pressure, especially when demand lacks the vigor to match supply. By contrast, shrinking BTC reserves can reflect a combination of hodling behavior and a rotation of liquidity away from centralized venues, which can give BTC a relative edge when risk sentiment shifts.

These reserve patterns add a practical dimension to the broader narrative: Ether appears more exposed to potential supply-driven downside on exchange rails, while Bitcoin benefits from tighter liquidity and, in some cases, a stronger bid from institutional participants stepping into the market.

Narrative tensions and market context: where the momentum sits

Beyond the charts and on-chain metrics, the fundamental backdrop for Ether remains a topic of debate. For years, Ether’s “ultrasound money” narrative — the idea of a deflationary or steadily scarce asset embedded in Ethereum’s monetary dynamics — helped frame ETH as a better long-term store of value relative to fiat or even BTC in some cycles. However, that narrative has cooled in recent periods, contributing to a prolonged period of lag versus Bitcoin on a relative performance basis.

Bitcoin, meanwhile, has benefited from growing corporate engagement and wider adoption into traditional portfolios. Market observers have pointed to evidence of corporate accumulation and strategic participation by institutions as a tailwind for BTC’s price resilience. Notably, retail and institutional access to spot BTC trading, including upcoming offerings and integration into mainstream platforms, continues to shape the adoption trajectory for BTC more than ETH in several market segments.

Recent coverage underscores this asymmetry: corporate players have shown sustained interest in BTC, while Ethereum’s growth narrative has faced headwinds that temper a broad-based upside versus BTC. In parallel, developments such as retail access expansions for spot BTC and ETH trading — including moves from traditional financial firms into crypto markets — remain in focus for readers watching how the market prices risk, liquidity, and opportunity across the digital asset spectrum.

Related commentary has explored how these dynamic shifts could influence capex decisions for developers, liquidity provisioning for exchanges, and the pace of adoption on Layer 2s and decentralized finance ecosystems. As the market absorbs these cross-currents, traders may look for catalysts that could tilt the balance—ranging from further macro normalization to concrete progress on Ethereum’s scaling roadmap and the evolution of centralized exchange liquidity pools.

On balance, the ETH-BTC relationship continues to hinge on a mix of technical barriers, on-chain liquidity signals, and the evolving narrative around what each asset represents to investors and users in different market regimes. While BTC’s path remains susceptible to institutional demand and liquidity dynamics, Ether’s fate will likely be decided by how supply pressure on exchanges interacts with network upgrades, layer-2 maturation, and the broader pace of Ethereum’s ecosystem development.

Readers should watch whether ETH can push through the established trend line, or if the combination of rising ETH supply on major exchanges and continued resistance around key moving averages keeps the pair under pressure. The next price pivot around 0.0176 BTC would not only mark a technical breakpoint but also signal whether Ether can reassert a case for value relative to BTC in the face of shifting liquidity and narrative forces.

The data underpinning these observations draw from CryptoQuant’s exchange-flow analytics, with ETH reserve figures specifically cited for Binance as of May. For anyone tracking the liquidity landscape, these metrics provide a practical lens into where risk might be concentrated in the near term and how institutional and retail behavior could shape the next leg of the crypto cycle.

What unfolds next could hinge on how much buy-side demand returns to ETH in the face of a higher supply ceiling on exchanges and whether BTC’s liquidity backdrop remains supportive as institutional participation continues to expand. Keep an eye on reserve trends, price action around the critical trend line, and any regulatory or product developments that could tilt market sentiment in the coming weeks and months.

White House adviser Patrick Witt said it’s possible the Clarity Act becomes law by July 4 while Senator Kirsten Gillibrand pushed for an ethics provision in the market structure bill. Consensus Miami 2026 wrapped up with a fiery debate on the role of prediction markets, and a lot otherwise happened at our first conference in the Sunshine State.

CoinDesk also released the results of a survey it commissioned of 1,000 registered voters on their views toward crypto heading into the 2026 election.

PS: I’ll be at the Bermuda Digital Finance Forum next week. Let’s catch up if you’re there.

You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.

The narrative

White House Executive Director of the President’s Council on Digital Assets Patrick Witt told the audience at Consensus Miami this week that he believed it was possible to have President Donald Trump sign the Clarity Act into law by July 4. The timeline would require a markup this month (which seems very possible), four weeks for the Senate to merge the Banking and Agriculture bills (technically possible), a few weeks for reconciliation with the House (also technically possible) and the House vote (will depend on the House) and finally, the part where the president signs the bill.

Beyond Witt, we heard from various industry participants and policymakers at Consensus Miami. Catch up below.

Why it matters

Look, if you’ve read this newsletter for more than a few weeks, you know the Clarity Act has taken center stage for the last several months. Maybe it’ll happen and we can move on to other things. Maybe not. But there does seem to be more momentum now than there has been in weeks, and so we’ll see — I imagine quite soon — what that means.

Breaking it down

Consensus this year had a number of other sessions with lawmakers, policymakers and lawyers weighing in on everything from what the Clarity Act needs (ethics provisions, per Senator Kirsten Gillibrand) to whether or not prediction markets are gambling (we did not reach a conclusion but it was an excellent debate!).

Some highlights:

CoinDesk also released the results of a survey of registered voters it commissioned from April 21-27. We found that while voters generally don’t care about crypto leading into the 2026 midterm election when facing other issues like the economy and healthcare. This likely isn’t a surprise to anyone.

Voters did overwhelmingly say that they did not want senior government officials to have ties to crypto business interests, a majority said they did not feel comfortable with President Donald Trump’s administration overseeing crypto (though just 17% of voters said they knew he and his family had co-founded World Liberty Financial). Voters also overwhelmingly favored banks to crypto projects when asked which was more likely to bring them financial services.

You can read our articles on this data below:

Crypto is at bottom of U.S. voters’ priorities heading into elections, CoinDesk survey shows

U.S. voters don’t trust Trump administration to oversee crypto sector, CoinDesk poll finds

Americans still prefer banks over crypto for financial access, CoinDesk’s survey shows

Thursday

• 14:30 UTC (10:30 a.m. ET) The Senate Banking Committee plans to hold a markup hearing to advance the Clarity Act.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Bluesky @nikhileshde.bsky.social.

You can also join the group conversation on Telegram.

See ya’ll next week!

TLDR:

• Larry Fink identified power, compute, and chips as critical U.S. shortfalls, putting 15 altcoins in focus.
  
• Five compute tokens including $TAO and $RENDER offer decentralized GPU access below traditional cloud pricing.
  
• Power tokens like $EWT and $POWR enable peer-to-peer renewable energy trading without central intermediaries.
  
• Chip-focused tokens such as $HNT, $IOTX, and $CHIP build hardware and lending layers for AI infrastructure. 

Altcoins tied to U.S. shortages in power, compute, and chips are gaining fresh attention across digital asset markets. BlackRock CEO Larry Fink recently named these three sectors as critical bottlenecks for the American economy.

The crypto community has identified 15 blockchain projects that directly target each of these gaps. With BlackRock managing more than $11 trillion in assets, Fink’s remarks carry weight among institutional investors tracking decentralized alternatives. Their growing interest has put these altcoins under fresh scrutiny.

Compute Tokens Offer Decentralized GPU Access for Growing AI Demand

The compute group holds five altcoins, each addressing a distinct gap in AI infrastructure. $TAO operates as a decentralized AI marketplace with 128 specialized subnets running varied machine learning tasks. $RENDER provides a GPU network built for 3D rendering and AI inference at commercial scale.

$IO pools idle GPUs across the Solana blockchain into a single, unified cloud platform for developers. $AKT offers H100 chip access at rates well below standard AWS pricing. $NOS is a Solana-based GPU grid designed specifically for independent AI developers and small teams.

A post from @ourcryptotalk stated these tokens are building for exactly the demand Fink publicly described. Each project targets a separate layer in the compute stack, reducing direct competition among them. $TAO focuses on model training incentives, while $RENDER handles inference and creative rendering workloads.

Traditional data centers are approaching capacity limits as global AI adoption continues to accelerate. Decentralized compute networks offer a practical option for developers needing affordable GPU access at scale. The connection between Fink’s stated concern and these token use cases has raised their visibility across markets.

Power and Chip Tokens Address Energy and Hardware Shortfalls

The power sector includes five altcoins focused on renewable energy distribution and peer-to-peer energy trading.

$POWR enables direct solar and renewable energy trading between participants without any central intermediary. $EWT is a grid-scale energy blockchain already in active deployment by Shell and EDF.

$GLOW rewards verified solar farms in tokens based on measurable clean energy output. $DAY links home batteries and solar panels to wholesale energy markets through a token-based bidding system. $SNC provides a marketplace where neighbors can trade surplus rooftop solar energy directly.

The @ourcryptotalk post framed these power tokens as direct responses to the bottleneck Fink identified. On the chip side, $HNT leads as the largest wireless DePIN network and now integrates 5G on Solana. $ATH runs an enterprise GPU cloud serving game studios and AI labs on a commercial basis.

$IOTX proves real-world chip data on-chain through Internet of Things hardware connectivity. $HONEY builds a dashcam hardware network mapping global roads with data stored directly on-chain.

$CHIP offers GPU-collateralized lending to finance AI infrastructure, acting as a financial layer within the chip sector. The crypto community is now asking which of these 15 altcoins has the capacity to absorb institutional capital flows.

TLDR:

• JASMY has corrected 98.7% from its $0.36 all-time high and now sits in a HTF demand zone at $0.0045–$0.0060.
  
• A weekly close below $0.0040 invalidates the bullish structure, making this the most critical risk level to watch.
  
• Analysts project a potential 10x–40x rally for JASMY during the 2026–2027 altseason if key levels are reclaimed.
  
• JASMY must reclaim and hold above $0.01030 on higher timeframes to confirm any valid bullish market structure shift.

JasmyCoin (JASMY) is drawing attention from crypto analysts as it trades near multi-year lows. The token has completed a near-total macro correction from its all-time high.

Technical patterns suggest a possible long-term expansion phase may be forming. Analysts are now watching key demand zones closely. Price compression at range lows points to a potential shift in market structure ahead.

JASMY Sits Inside Critical HTF Accumulation Zone After Steep Decline

JASMY reached its previous cycle peak at approximately $0.36 before entering a prolonged downtrend. From that high, the token corrected by roughly 98.7%, placing it near historically significant demand levels.

The price is currently trading between $0.0045 and $0.0060, which analysts identify as a high-risk accumulation zone.

Crypto analyst Crypto Patel noted on X that JASMY “may be forming the same structure that led to a 4,000%+ expansion.”

The token has been trading inside a multi-year descending channel since its 2021 cycle top. Consistent lower highs and lower lows have defined price action throughout this period.

A confirmed breakout and retest occurred in 2024, representing a temporary shift in order flow. However, JASMY failed to reclaim the $0.05 level on higher timeframes, which led to redistribution. Price eventually returned to the current HTF demand region near cycle lows.

Compression at range lows is being read as a sign of seller exhaustion by market participants. The pattern mirrors behavior seen before the 2023–2024 rally, which produced a 1,933% gain. Analysts are treating the current zone as a late accumulation phase before any potential move higher.

Key Price Levels and Cycle Targets Guide Market Outlook for JASMY

For any bullish structure to remain valid, JASMY must reclaim and hold above $0.01030 on higher timeframes. Below that, mid-range resistance sits between $0.0070 and $0.0100. A weekly close below $0.0040 would invalidate the current accumulation thesis entirely.

The structure break level that would confirm a higher timeframe shift is $0.0208. Beyond that, major liquidity targets include $0.05 and $0.18. Bull cycle price targets outlined by the analyst are $0.0185, $0.050, and $0.185 respectively.

The 2026–2027 window is being flagged as a period for a potential massive breakout and retest. Analysts point to a possible 10x–40x rally during a broader altseason phase.

This projection is based on the repeating channel compression and expansion structure seen across previous cycles.

The current phase is described as late accumulation near cycle lows, with risk remaining elevated. Traders are advised to monitor weekly closes carefully around the $0.0040 invalidation level. No confirmed breakout has occurred yet, and price remains within the descending channel structure.