Category: Markets

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Bitcoin Crypto News Markets

Total Exchange BTC Inflows Show Sellers May Be Exhausted

Despite the chaotic geopolitical environment, the Bitcoin market is in a fairly balanced state with low exchange inflows, suggesting seller exhaustion. Could this indicate we’re approaching a turning point in the market?

According to market analysis firm Glassnode, net BTC inflows to exchanges since September 2021 have been virtually flat, indicating fairly modest sell-side supply pressure. Even with the heightened geopolitical uncertainty of the past week, total exchange inflows have remained relatively small at around 1000 BTC per day.

Investors Flock to BTC Derivatives

Although the net inflow of BTC to exchanges overall has been flat, there has been a movement of BTC from exchanges with less derivative market dominance to those with more, indicating investors may be looking increasingly to hedge risk rather than actually sell their BTC.

Bitcoin balances on exchanges. Source: Glassnode

Binance, FTX, Bittrex and Bitfinex have seen significant growth in the amount of BTC they hold: in aggregate, these exchanges have seen an increase of BTC inflows of 24.3 percent since the end of July 2021. In contrast, all other exchanges Glassnode tracks have seen drops. 

In addition to the growth of their held BTC, Binance and FTX have seen their dominance in the BTC derivatives markets more than double since December 2020. This growth in derivatives suggests that investors are generally looking to find ways to offset their risk rather than sell.

Other Market Indicators Further Suggest Seller Exhaustion

According to Glassnode, the majority of sell-side pressure for BTC has been coming from short-term HODLers – those who bought in the past 155 days – who are about 15 percent down on their investment on average. Selling pressure from long-term HODLers has been in steady decline since January 2021.

Despite many recent sellers realising losses, the aggregate market losses are not nearly as significant as we’ve seen in previous bear markets – around 0.5 percent of market cap per day compared to around 1.0 percent in previous bear markets.

According to Glassnode, these relatively small aggregate losses may be a further signal of seller exhaustion, that is to say most of those who plan to sell already have. Although they warn a “final and complete capitulation” is still possible based on historical precedent.

Are We Getting a Look at Bitcoin’s Bear Bottom?

Another encouraging indicator that the bottom of the bear market may be close is that approximately 52.5 percent of all transaction volume is currently spent at a loss: historically this figure has been around 55 percent in the final stages of bear markets.

This finding follows a sell-off of BTC in January 2022, where Bitcoin’s relative strength indicator (RSI) dropped to levels not seen since March 2020 during the Covid crash, which some analysts suggested showed that BTC was oversold and primed for a rebound.

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Airdrop DeFi Markets NFTs Tokens

New NFT Marketplace X2Y2 DeFi Token Up 225% Despite Bumpy Start   

X2Y2, a new non-fungible token (NFT) marketplace, has seen its token soar 225 percent after launching a ‘vampire attack’ airdrop to attract users from OpenSea.

Following technical difficulties with the drop, the community has had some negative reactions to the way it was handled.

On February 16, X2Y2 launched its Ethereum-based NFT trading platform aiming to rival leading NFT marketplace OpenSea. In also launching a vampire attack airdrop, users from OpenSea who had spent more on their collections were eligible for more rewards and were thus lured away from the top platform.

To be eligible for the drop, users needed to have listed their NFTs on the X2Y2 marketplace:

A vampire attack is a strategic move from new marketplaces to airdrop their coins to users after they complete a set of requirements that increase attraction to their platform.

Since its launch, the X2Y2 token pumped 225 percent but is now trading at lower than its launch price:

X2Y2 price performance. Source: CoinMarketCap

Troubles with the Airdrop Cause Delay

X2Y2’s launch went through a bumpy start after some technical problems with claiming tokens stopped the airdrop for a few hours:

During this time, users criticised the platform’s decision to pause the airdrop, which could have alleviated downward pressure on the X2Y2 price. One user commented: “You have fixed the problems but you don’t resume the airdrop right away? It’s not a good look to wait around for more people to buy in to increase the price before they get dumped on prior to resuming the claiming.”

The project planned to hand out 120 million tokens, but on the day of the launch only 7 percent had been claimed before the airdrop went offline, with users who had already claimed tokens allowed to stake at a massive APY:

X2Y2 is not the only upstart NFT platform launched to challenge OpenSea. Last month, in another example of a vampire attack, LooksRare pitched its LOOKS token to reward users of the platform and hopefully attract existing users from OpenSea.

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Crypto News Ethereum Gas Markets NFTs

Ethereum Gas Prices Have Significantly Decreased from January Peak

Ethereum (ETH) gas prices have decreased by a significant 72 percent since their peak in January. This decrease in demand stems from the price dropping below US$3,000 yet again.

At the beginning of January, gas prices jumped due to the surging volume for NFTs but have since decreased following a bearish price drop below US$3,000. The movement can be mainly attributed to the overall crypto market downturn, following negative macro sentiments, but most of all due to the threat of war in Ukraine. Although ETH has seen significant price drops, there is no lack of positive development surrounding the ecosystem.

Earlier this year, high ETH gas prices and rising network congestion forced developers to build on layer 2 solutions.

Gas trends. Source: Delphi Digital

The TVL (total locked value) in DeFi (decentralised finance) remains above US$200 billion, despite recent market downturns from US$250 billion in November 2021. Levels correlate with ETH’s all-time high market value of US$4,878 on November 10.

As previously mentioned, sentiments surrounding the ETH ecosystem have not dissipated. That KPMG in Canada has added ETH to its balance sheet shows there is a clear recognition of ETH as an investment asset, even for risk-averse enterprises.

Small Ether Holders Increasing

Adding to ETH’s success is the fact that Ethereum adoption is not only limited to crypto whales and big players. According to data, the number of addresses holding between 0.1 and 1 ETH is at an all-time high. In the span of a year, the number of these addresses increased by 98 percent and at the moment they hold 1.78 million ETH collectively – up 4.54 percent in one month.

At the other end of the argument, the NFT market has slowed down since reaching its peak levels in January 2022. Although this year has seen record-breaking NFT market activity, market data suggests that the number of sales is down from almost 64,000 sales per day in mid-January to 24,000 by the end of last week.

Since the price of ether dipped below US$3,000, the demand to make transactions on the ETH blockchain has remained relatively low. And as the demand for transactions declines, so too the market price of blockspace. According to data, transaction fees are officially at their lowest since July 28, 2021.

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Bitcoin Crypto News Markets

60% of BTC Supply Remained Dormant Through Latest Volatile Period

Following the recent drawdown crypto markets, Bitcoin moved strongly into oversold territory, suggesting conviction might have been on the decline. HODLers, however, didn’t get the message, as on-chain analytics shows over 60 percent of supply hasn’t moved in a year.

Illustration of declining ratio between younger to older coins. Source: Glassnode

Long-Term Holders Retain Conviction

Despite Bitcoin’s negative price action reflecting a 50 percent decline from its November high, it’s telling that much of Bitcoin’s holder base has remained unperturbed. This tends to suggest that most Bitcoin holders have strong conviction, enough to see them through periods of extreme price volatility.

One metric illustrating this is age distribution bands, also known as “HODL waves”. Aside from illustrating when various age group bands last moved, it also provides clues regarding broader macro adoption trends.

As illustrated below, over 60 percent of supply has been dormant for more than a year.

BTC HODL waves. Source: Coin Metrics

Minnows Continue to Accumulate

Another optimistic indicator outside of HODLers’ refusal to sell is that addresses holding small amounts of BTC continue to accumulate. As illustrated below, addresses holding between 0.001 and 0.1 BTC have increased from approximately 13.5 million to 16 million since the beginning of 2021:

Number of small holder addresses for BTC and ETH. Source: Coin Metrics

For those feeling particularly uneasy at the recent price action, the indicators above must surely provide some much needed “hopeium”.

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Crypto News Markets Solana

Solana Slides 42% in a Week Amid More Outages

Solana (SOL) has been hit extra hard during the new year’s crypto sell-off with the chain also experiencing downtime and duplicate transactions, resulting in an outcry from the community.

Solana Down With the Rest of the Market

Solana (SOL), one of the top 10 crypto projects by market cap, has seen a 42 per cent drop in price during the past week, and is now nearly 70 per cent down from its all-time high of US$260, set on November 6.

Since the beginning of the year, the market has been in a downward spiral with most coins shaving off a good 30/40 percent, and Bitcoin (BTC) down nearly 50 percent from its own all-time high, also in November.

Solana/USDT price chart. Source: CoinMarketCap

Solana’s Chain Congestion

During this time, many people have been trading, using DeFi, and looking for liquidation bounties, causing a considerable increase in transaction volume. Because of this, Solana has experienced some performance problems on the chain caused by “excessive duplicate transactions” and “high levels of congestion”:

Users looking for bounties have been racing to close eligible positions, some even using bots to look for them. With the market in its current state, the liquidation bounty race has caused a flood of duplicate transactions that need to be corrected by validators while still processing the increased load.

During January, the network has experienced a few days when there have been “partial outage(s)”, one lasting up to 17 hours, leaving users up in arms. The chain also went through a distributed denial-of-service (DDoS) attack, which also caused downtime and a major slowdown of the network:

From Solana’s side, it has sent out update 1.8.14 to deal with the worst of the problem, with more improvements expected to roll out in the next eight to 12 weeks.

Complex Transactions Slowing Down Networks

According to Solana Status, “The last 24 hours have shown these systems need to be improved to meet the demands of users, and support the more complex transactions now common on the network”. With the increase of complex transactions in the mix, Solana validators are struggling to keep on top of the constant flow of user demands.

According to Emin Gun Sirer, chief executive of Ava Labs, Avalanche (AVAX) has held up well, describing its chain performance as “solid” during the recent stress test:

Categories
Bitcoin Crypto News Markets Solana

Crypto Markets Tumble Amid Global Investor Sell-Off, Down 44% from All-Time High

Virtually all digital assets are in the red following sharp declines that began last Thursday and continued into the weekend. An estimated US$1.3 billion in leveraged long positions was liquidated amid a correction that saw the crypto market capitalisation (market cap) drop close to 50 percent from its November high.

Blood in the Crypto Streets

Over the course of a few days, billions were wiped out across the board, with few exceptions. Of the top 100 cryptocurrencies by market cap, DeFi tokens were hit hardest:

Top 10 worst performing digital assets over past seven days. Source: CoinMarketCap

The top 10 cryptos by market cap fared somewhat better, although Solana’s 36 percent decline over the week is also partially due to it suffering another, yes another, DDoS (distributed denial-of-service) attack.

Top 10 digital assets by market cap over past seven days. Source: CoinMarketCap

What Happened?

As the US Federal Reserve recently signalled its intent to tighten monetary policy in 2022, market sentiment shifted from risk-on to risk-off.

Risk-on assets are those with higher volatility, to the upside as well as the downside. These include assets like equities and crypto. Generally speaking, value stocks tend to be less risky than tech stocks. And Bitcoin is widely considered less risky than other digital assets.

Risk-off assets, by contrast, are assets with low volatility and therefore perceived as less risky. These are things like government bonds and cash, which don’t tend to fluctuate sharply in value.

With the broader market going risk-off, a Wall Street-induced equity sell-off saw close to US$500 billion in market cap erased over the course of five days. This move was amplified by a cascade of leveraged long liquidations, an all-too-familiar sight in the crypto markets:

As Bitcoin increasingly is viewed as risk-on in the short term, a fascinating positive correlation has emerged between the NASDAQ (a technology-focused index) and Bitcoin.

NASDAQ and BTC correlation. Source: Will Clemente

If you compare the NASDAQ to Bitcoin and then compare Bitcoin to the DeFi tokens, it’s evident that the further you go out on the risk curve, the harder you get hit when market sentiment goes risk-off:

While some may be feeling the Monday blues from the past few days’ crypto carnage, others will look at it similarly to the May 2021 sell-off, which in hindsight represented a great buying opportunity. Of course, hindsight is 20/20.

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Blockchain Crypto News Markets Privacy Tokens

Privacy-Focused Token SCRT Pumps 64% in a Week Amid ‘Shockwave’ Announcement

The Secret Network (SCRT) has seen considerable price movement since the launch of its new bundle of upgrades, Shockwave, aiming to improve the network and get more builders on the chain.

Shockwave Ripples Through the Down-Market

After launching its new upgrade on January 12, SCRT has seen a near 65 per cent rally in the past seven days from a low of US$5.6 to $9.34 at the time of writing, fighting against the current down-market.

The announcement has sparked interest in those who want to both invest and build on the privacy-centric chain, with its US$65 million total value locked (TVL) and total market value of US$1.3 billion at the time of writing.

SCRT 7-day price movement: CoinMarketCap

Adoption and growth are SCRT’s major focus for 2022 and could have a further positive impact on the price. There is also more potential upside after the SCRT token’s listing on FTX, giving it exposure to the major US exchange’s large client base:

Previously, the SCRT token spiked after the project launched its privacy based non-fungible tokens (NFTs) on the OpenSea marketplace.

What Does Shockwave Entail?

SCRT is the only blockchain network to have run private smart contracts on its mainnet for over a year, and in Q4 2021 integrated the Cosmos Inter-Blockchain Communication protocol (IBC) to help optimise the network and add liquidity.

The endgame of Shockwave is to turn Secret Network into cryptocurrency’s privacy-preserving hub, something that’s made possible thanks to Secret’s use of Cosmos’s IBC.

CoinBureau

With Web 3 security and privacy at its heart, SCRT has its eyes on expanding the ecosystem, with the project showcasing some major actions planned in 2022. The chain wants to create funding and incubation opportunities while empowering developers with better tools and support. In so doing, the community can grow and empower itself with a vast array of functionality at its fingertips.

According to Secret’s blog, the network has set the following goals for the first half of 2022:

  • get 100 new projects building in the Secret ecosystem;
  • have hundreds of thousands of new users onboarding onto Secret Apps; and
  • launch multiple Secret Apps achieving 10,000+ active users.
Categories
Blockchain Crypto Exchange DeFi Markets Tokens

Bullish Signals Push DeFi Token ATOM Up 90% in the Past Month

The Cosmos blockchain (ATOM), one of the OGs in the space, has seen exceptional growth in the past month through the sea of red washing over the market, thanks to its cross-chain approach and new decentralised exchange (DEX).

A Cross-Chain Future for Cosmos

Cosmos is a community-owned and operated blockchain, and one could say it functions as a layer 0 on which other blockchains can be built and liquidity shared between chains. Cosmos can connect and exchange data and assets with other sovereign blockchains; this is made possible by using the Inter-Blockchain Communication protocol (IBC).

This technology is now being used to connect various blockchains and is considered “the safest and most secure and decentralised way to move assets across different blockchains, unlocking interoperability across multiple chains”.

ATOM Price Spike

During the past month, the ATOM token has soared close to 90 percent from just over US$21 on December 14 to around $40.83 at the time of writing. With an estimated US$162 billion in digital assets under management and 262+ dApps and services, the chain is poised for further growth.

As more chains are bridged, the total trading volume will increase. Since the release of cross-chain bridges that connect the Cosmos (ATOM) ecosystem with other Ethereum (ETH) Virtual Machine (EVM) compatible networks, the trading volume has expanded considerably.

OSMO price and DEX trading volume. Source: Token Terminal

Ups and Downs for Osmosis

Osmosis (OSMO) is one of the first DEXs to service chains connected through the IBC, and has already begun benefiting from its position. One week ago it was in the top 3 DEXs, however, at the time of writing, the exchange had gone down to rank 12th.

OSMO’s massive increase in trading volume has also been one of the factors causing the price to surge 81 percent from a low of US$4.05 on December 17 to a new all-time high of US$9.57 on January 12.

Categories
Bitcoin Blockchain Crypto News Markets

BTCS Launches ‘Bividend’, the First NASDAQ Company to Pay BTC Dividends

A little-known NASDAQ-listed blockchain company, BTCS, has made history by becoming the first to offer a Bitcoin dividend, dubbed quite appropriately, a “Bividend“.

Bividend Explained

BTCS, which describes itself as as “securing the next-generation blockchain infrastructure and providing data analytics tools for your crypto portfolio”, announced this week that it was proceeding with a so-called “bividend”, the first dividend payable in Bitcoin by a NASDAQ-listed company.

The company intends to pay a once-off dividend in either Bitcoin or cash, equivalent to US$0.05 per share, on March 16, 2022. To qualify, you must be a shareholder of record, meaning that the shares cannot be held by a brokerage firm such as Robinhood, where you are merely the beneficial owner. You also need to specifically opt in if you prefer Bitcoin over cash.

We want to reward our long-time shareholders for their continued support and encourage financial freedom by providing the means to enable direct ownership of Bitcoin and other digital assets.

Charles Allen, CEO of BTCS

Allen added that BTCS had a history of breaking new ground:

In the crypto space BTCS has a long history of firsts, including being the first pure-play US public company focused on cryptocurrencies and blockchains, the first US public company to mine Bitcoin, the first … to implement a digital asset treasury strategy, and the first … to secure next-generation proof-of-stake blockchains.

Charles Allen, CEO of BTCS

BTCS shares soared on the announcement, pushing the price as high as 43 percent on the day, taking its market capitalisation to around US$43 million.

BTCS share price. Source: Tradingview

Publicity Stunt?

While some have seen the news as bullish, others have adopted a more cynical view, suggesting it is merely a publicity stunt.

Matt Levine of Bloomberg describes BTCS as a “somewhat unloved micro-cap company” that pulled off an effective marketing trick, propping the shares up more than 40 percent on the day.

A bividend is a terrible name but an obviously good meme-y crypto stunt to increase attention … BTCS will pay about $500,000 in bividends, which bought it about $15 million of market cap. Just a good trade!

Matt Levine, writer, Bloomberg

Cynicism aside, he may not be wrong. BTCS is still almost 50 percent off its September high when it debuted on the NASDAQ.

Whatever your take, it’s clear that:

  • regardless of whether it was a publicity stunt or not, it worked; and
  • given its success, there are likely to be a host of copycats in the near future leveraging the Bitcoin brand to elevate their own.
Categories
Crypto Art Crypto News Investing Markets NFTs

OpenSea’s Value is 880% Higher Than a Year Ago Following its Latest Fundraising Round

OpenSea has raised US$300 million in its latest funding round, bringing the largest non-fungible token (NFT) marketplace to a US$13.3 billion post-money valuation and adding to the project’s massive growth in sales and user participation.

Paradigm and Coatue led the funding round with participation from new and existing investors.

We are excited to work with these incredible partners, thinkers and builders who collectively bring a depth of experience in Web3, NFTs, and best-in-class consumer experiences.

OpenSea blog post

Via the blog post, the project also announced its new VP of Product, Shiva Rajaraman, whose CV includes stints at Meta, YouTube, Spotify and WeWork. OpenSea’s previous head of product was Nate Chastain, who left the company after it was discovered he had used inside information to buy NFTs before they appeared on the marketplace and sold them at a profit.

OpenSea Sees Massive Growth in 2021

The US$13.3 billion valuation figure OpenSea is reporting demonstrates the growing appeal of NFTs, which can be used as blockchain-based deeds of ownership to any form of digital item. As a testament to their growth, in July 2020 OpenSea was valued at US$1.5 billion after a Series B funding round.

The marketplace has not been slowing down, posting its third-best trading day ever on January 2 with US$243 million in Ethereum NFT volume. OpenSea has recorded US$14.68 billion in sales across 1,387,357 traders worldwide, as well as a major increase in user activity.

Participants Want OpenSea to be User-Owned

Earlier this month, some of the NFT community questioned OpenSea’s ability to intervene in the workings of the platform when it froze 16 NFTs stolen from a collector.