Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
Plus: Algorand analytics now live at IntoTheBlock
Based on IntoTheBlock’s weekly newsletter. If you enjoy it, and would like to receive it every Friday make sure to sign up here!
This week we dive into the recent pullback hitting crypto markets. We discuss risky conditions prior to the crash and how the market is adjusting, taking advantage of lower price levels.
We also cover the recent growth in Algorand, which not only saw a yearly high in price yesterday, but has also recorded increasing momentum in on-chain metrics.
Weekly Fees — Sum of total fees spent to use a particular blockchain in a week. This tracks the willingness to spend and demand to use Bitcoin or Ether.
- Bitcoin’s network revenues dropped 22% to a six-week low
- Ethereum’s weekly fees remained high around $450M for second consecutive week with DEX trades leading transaction activity
Exchanges Netflows — The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges over the past seven days. Crypto going into exchanges may signal selling pressure, while withdrawals potentially point to accumulation.
- Significantly more crypto left exchanges than entered them (~ $3B between BTC and ETH), a sign that investors are not panicking despite the drop
- There were five transactions over $100M related to exchange addresses on November 18: four were withdrawals to unidentified wallets or custody services and one from Binance to Coinbase, suggesting large buying activity during the dip
Diving Into the Pullback
After several continuous weeks in the green, crypto markets incurred a decent pullback with Bitcoin and Ether dropping double digits. Despite the relatively severe correction, there is no clear catalyst other than market forces pushing price down. Derivatives markets had been pointing Bitcoin potentially being over-extended as it reached new highs.
As of November 18 through IntoTheBlock’s Bitcoin derivatives indicators
The break-down — Perpetual swaps are the most traded Bitcoin instrument. These charge traders a funding fee to keep prices pegged with spot markets.
- As Bitcoin reached new highs above $65k, funding rates jumped to the highest since May indicating that traders going long were willing to pay larger fees to bet on BTC increasing
- Following the recent drop, funding rates decreased to near-zero, pointing to the market deleveraging and taking a more neutral position
By diving into on-chain data we can better understand how the market has been adjusting to the recent dip. Here we can observe a decrease in the supply of crypto available to be sold.
As of November 18 through IntoTheBlock’s Ethereum exchange flows
Crypto supply on exchanges is decreasing — both Bitcoin and Ether have seen net amounts of over $1 billion leave centralized exchanges this week.
- Over the last 30 days Bitcoin and Ether have seen net outflows from exchanges of $6.4B and $4.7B respectively
- Less supply available to be sold can potentially decrease selling pressure, depending on where crypto is being transferred to
- In Ether’s case, a significant proportion is being deposited into DeFi with the total value locked reaching a record 41M ETH (~35% of circulating supply) based on DeFi Llama
What’s next? on-chain data can also help us determine key areas of buy/sell pressure based on historical trading activity. IntoTheBlock’s In/Out of the Money indicators groups clusters of addresses depending on their average cost of purchase, providing an indication of the price levels that are expected to act as support or resistance.
As of November 18 through IntoTheBlock’s Bitcoin In/Out of the Money
- Bitcoin is currently at a major support level between $55,000 — $56,000, where 970k addresses previously acquired over half a million BTC
- If this level were to break, there could be some buying activity at $53,000 but the greater support level is closer to $50,000
- On the other side, 600k BTC were previously acquired just above $60,000 which is expected to act as a major point for sellers prior to potentially aiming for new highs
IntoTheBlock’s New ALGO Metrics
Algorand is quickly emerging as a contender in the smart contract platform space as crypto shifts towards a multi-chain approach. At IntoTheBlock we’re excited to launch indicators for ALGO — freely available to all users!
Based on these metrics, here are a few key insights.
As of November 18 through IntoTheBlock’s ALGO transaction stats
Behind growing transaction activity — ALGO is the native token of the Algorand blockchain, necessary to execute transactions and use applications. As more protocols such as Yieldly and Tiny Man deploy on Algorand, this increases demand for ALGO.
- ALGO payment transactions reached an all-time high of 1.02 million this week
- These transactions currently only display transfers from one address to the other with the total amount including smart contract usage being closer to 4 million (IntoTheBlock will soon update the indicator to include these).
- USDC transactions on the Algorand blockchain are another major reason for the growing network activity
As of November 18 through IntoTheBlock’s ALGO transaction stats
ALGO is on the verge of a milestone — With nearly 15 million addresses holding Algorand’s token, it has one of the largest amount of holders.
- Even though one address does not equal a user, the number of addresses with a balance provides a valuable approximation to monitor the community of holders
- The number of ALGO holders has more than doubled year over year from 6.87 million in November 2020
Just the tip of the iceberg — IntoTheBlock’s ALGO page offers 150 indicators covering Algorand from various perspectives. The announcement article linked below covers more of these and a thorough deep dive piece on Algorand will be released next week on IntoTheBlock’s Medium page.
Upcoming Webinar
Sign up for our next webinar. Limited amount of free seats available.
A Quantitative Approach to Trading NFTs
In this webinar we will present several advanced analytics and insights that can help you make better decisions while trading NFTs. This analytical approach can aid to value NFTs in a more deterministic way. We will analyze the implied risks and propose some ideas for strategies.
Insights and News
We are constantly discovering new fascinating insights about the crypto-asset market. Here are our latest Medium articles and updates.
Algorand analytics are now available at IntoTheBlock
The new suite of ALGO’s dedicated analytics are free for anyone to access
A Few Unorthodox Thoughts on DeFi Regulation
Jesus Rodriguez, IntoTheBlock’s CEO, discusses novel ideas to consider for regulating decentralized finance.
MakerDAO partnership with Aave redefines the mechanics of stablecoin protocols
MakerDAO is back in the spotlight with its new feature release in partnership with Aave
Inside Crypto’s Pullback was originally published in IntoTheBlock on Medium, where people are continuing the conversation by highlighting and responding to this story.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.