Bitcoin ESR Has Shown Divergence From The Price Recently
As explained by an analyst in a CryptoQuant , the ESR is acting as a leading metric for BTC and other coins in correlation with the cryptocurrency. The “ESR” is an indicator that measures the ratio between the Bitcoin exchange reserve and the exchange reserve of all stablecoins.
The “exchange reserve” here refers to the total amount of the given asset (or group of assets) that’s currently being stored in the wallets of all centralized exchanges.
The value of the metric seems to have been sharply going up in recent days | Source:As you can see in the above graph, the analyst has highlighted some interesting trends between the Bitcoin ESR and the price of the asset. It looks like during the bull run in the second half of 2021 and the bear market in the first half of 2022, both these metrics were showing convergence.
This means that the price and the ESR were moving in sync, replicating each other’s movement to some degree. The quant has pointed out, however, that this pattern started to change as the bear market of 2022 went on.
With some major selloffs in the asset that took place in this period, the correlation between the Bitcoin ESR and the price broke, implying that these metrics were no longer moving in tandem. Near the end of 2022, the ESR started climbing, while the price was moving sideways at the bear market lows. But with the start of 2023, the price also began to move up, following in the footsteps of the metric. The Bitcoin ESR has continued to show divergence from the price like this and has been sharply going up toward a new all-time high. “In the current market structure, the ESR acts as a magnet to Bitcoin’s spot price,” explains the analyst. The quant, however, also believes that this divergence will eventually shift back into being a convergence as BTC’s pre-halving accumulation cycle continues further.BTC Price
At the time of writing, Bitcoin is trading around $28,100, up 5% in the last week.BTC seems to have overall moved sideways recently | Source: