The Weekly Update Week 16, 2021
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
The Weekly Update
Week 16, 2021
Provided byMarket Update
1 ▪ Bitcoin dropped further last week, all the way down to
$47,000. However, this week has started with a strong
recovery, already climbing more than 15% from the lows.
▪ The market sentiment just dropped to the lowest level in a
year, but quickly recovered with yesterday’s price boost.
Options: Open interest at Strike price
▪ The Kimchi premium is now trending downwards again. The (Deribit, expiry on Fri Apr 30th)
peak of this Kimchi premium cycle reached 20.2% on April
18th, with bitcoin trading down 12.71% in the following week. 8000
▪ Over the last week, we’ve seen a substantial decline in the 7000
bitcoin futures’ open interest. Bybit, in particular, has seen a
large OI decline, a rather healthy sign for the market.
6000
Valuation Max pain
Open Interest (BTC)
5000
2 ▪ Bitcoin dropped down to $47,000 this weekend, but is
already recovering strongly. Are we heading higher again?
4000
▪ The massive liquidations following last weekend's dump have
undoubtedly reduced the speculative FOMO. We’ve now 3000
seen funding rates in the neutral territory since Sunday, April
18th.
2000
▪ 68,500 BTC options are set to expire on Deribit on Friday,
with a notional value of $3.6 billion. The max pain price 1000
currently sits at $54,000.
0
Blockchain Activity
$44,000
$76,000
$60,000
$100,000
$28,000
$48,000
$70,000
$84,000
$24,000
$32,000
$54,000
$80,000
$20,000
$36,000
$40,000
$52,000
$50,000
$68,000
$120,000
$56,000
$62,000
$88,000
$64,000
$72,000
$58,000
$66,000
3 ▪ A lot of bitcoin has changed hands lately. On-chain data
suggests that buyers in the $30,000 to $41,000 interval and
$43,000 to $52,000 interval have sold to new holders at Calls Puts
Source: Deribit
around $55,000.
▪ The number of active Ethereum addresses is at an all-time
high of 680,000.A volatile week in the crypto market
Is the bottom in for bitcoin?
Bitcoin Correlation:
ETH XRP GOLD S&P500
90-day correlation
Bitcoin dropped further last week, all the way down to $47,000. However,
(weekly change included)
▪
this week has started with a strong recovery, already climbing more than BTC 0.743 -0.024 0.320 0.053 0.089 -0.005 0.183 0.002
15% from the lows.
Source: CoinMetrics
▪ A drastic change in market sentiment has seen the derivatives market
cool off, and traders are more uncertain about bitcoin's direction than we Top 3 by Market Cap: Percentage Change in Price Over the Last Week
have seen in a while.
▪ ETH and other altcoins recovered strongly yesterday as well and continue 18.0% $2,572
their climb today. ETH is once again flirting with its previous highs.
▪ DeFi-related tokens seem to be back in focus among traders, with solid
gains across the board this week. 10.0% $572.5
Best Performing Price Last week Last month YTD
Polygon 0.581 87.11% 68.15% 3147%
Compound 684.190 57.48% 86.89% 369% -1.2% $55,147
PancakeSwap 33.323 54.04% 107.50% 5678%
Worst Performing Price Last week Last month YTD
Dogecoin 0.275 -33.85% 406.60% 4738%
VeChain 0.203 -11.50% 119.80% 957%
NEO 95.681 -6.56% 118.70% 556%
Last week of top 50 by market capitalization
Source: cryptowat.ch, messari.io Source: NYDIG
Apr 27, 2021 3 Provided byBitcoin dominance at lowest level in more than two years
Percentage of Total Market Capitalization
BTC ETH BCH LTC XRP DASH NEM XMR IOTA NEO
Market
51.83% 14.94% 0.81% 0.87% 3.28% 0.15% 0.15% 0.37% 0.29% 0.34%
Share
Weekly
-2.02% 2.16% -0.03% 0.00% 0.25% -0.01% -0.01% 0.05% 0.01% -0.05%
A somewhat discouraging last week for most traders, as all indexes
Change*
continued to decrease. The Mid Caps Index is still the clear winner of * Weekly change in percentage points
Source: Coinpaprika.com
April, with bitcoin struggling the most. Can this week’s recovery give a
strong end of April?
Monthly Performance of Market Capitalization Weighted Indexes
▪ The Mid Caps Index ended yesterday at 58%, still outperforming other
indexes by a large margin.
▪ The Small Caps Index touched the negative area this weekend but 58%
bounced strongly to a 15% gain yesterday.
▪ It’s not been a good month for the Large Caps Index, which ended
yesterday in the red.
▪ Bitcoin’s market share is now at the lowest level in two years.
Altcoins have been flying this year, and even though bitcoin has 15%
performed well, its market share of the total market cap is now down
below 52%.
-1%
-10%
Source: NYDIG, Bletchleyindexes.com
Apr 27, 2021 4 Provided byMarket sentiment dropped to lowest level in a year
The Fear and Greed Index dropped to 27 on Monday, the lowest level in almost a year. This was very close to “Extreme Fear” levels. It’s a long time since the market has been fearful. A
market sentiment down in the Extreme Fear area has historically been a good buying opportunity. However, the sentiment bounces strongly again yesterday, and ended at a neutral
state of 50.
Fear & Greed Index
Extreme Greed
50
50
Now Last week Last month
Extreme Fear Greed (50) Greed (73) Greed (65)
Source: Alternative.me, NYDIG
Apr 27, 2021 5 Provided byMarket activity picking up again
Another weekend with lots of action in the crypto market. The 7-day real bitcoin volume* pushed even higher last week, and almost climbed up to the highs of February. This
sudden increase came after several days with more than $10 billion changing hands on the leading spot exchanges.
16
Real BTC Daily Volume (7-day average)
14
12
Trading Volume ($ bn)
10
8
6
4
2
0
Apr 20 May 20 Jun 20 Jul 20 Aug 20 Sep 20 Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21 Apr 21
Source: Messari, Skew *as defined by Arcane Research. Read more here.
Apr 27, 2021 6 Provided bySpike in volatility – highest level in almost two months
The 7-day volatility climbed well above 4.5% yesterday, after a strong 10% daily return for bitcoin. This is the highest level since the beginning of March and shows
how the last week has been full of action. After a period if relatively low volatility, it seems like we are trending upwards again.
20%
BTC-USD Volatility
Daily Return 30-Day Volatility 7-Day Volatility
15%
10%
5% 4.63%
3.25%
0%
-5%
-10%
Apr 20 May 20 Jun 20 Jul 20 Aug 20 Sep 20 Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21
Source: cryptowat.ch, Coinbase
Apr 27, 2021 7 Provided byStill huge premiums on the smaller Grayscale trusts
Premium to NAV: Grayscale Litecoin and Bitcoin Cash Trusts
7000%
While the narrative surrounding the Grayscale Bitcoin trust and Ethereum
trust trading at significant discount prevail, the situation within the Litecoin
and BCH trust is widely different. 6000%
▪ Grayscale’s bitcoin trust traded at a discount of 18.92% on Thursday, April 22nd, while
5000%
the Ethereum trust traded at a discount of 4.5% the same day.
▪ While the major Grayscale trusts currently trade at a discount to their NAV, other
4000%
Grayscale trusts still trade at a huge premium.
▪ The Grayscale Litecoin Trust (LTCN) trades at a premium to NAV of 784%. The 3000%
premium peak of the LTCN shares was reached on November 24th with an
unbelievable premium of 5871%.
2000%
▪ The Grayscale Bitcoin Cash Trust (BCHG) is trading at a slightly lower but still very
significant premium of 237%.
1000%
▪ In other words, if you seek crypto exposure through your 401(k) you should be highly 784%
cautious with the Litecoin and Bitcoin Cash trusts, given how the shares are trading
far above their fair value. 237%
0%
18 Aug 12 Sep 7 Oct 1 Nov 26 Nov 21 Dec 15 Jan 9 Feb 6 Mar 31 Mar 25 Apr
LTCN Premium to NAV BCHG Premium to NAV
Source: NYDIG Data and TradingView
Apr 27, 2021 8 Provided byBitcoin futures market: Open interest on the decline
Bitcoin Futures: Total Open Interest
$30bn 25%
Over the last week, we’ve seen a substantial decline in the bitcoin
futures’ open interest. Bybit, in particular, has seen a large OI decline, a
rather healthy sign for the market.
$25bn
▪ The current global open interest in the bitcoin futures market sits at $18.4 billion,
which is the lowest level seen since March 8th. 20%
$20bn
▪ Denoted in bitcoin the open interest is currently sitting at the levels seen
throughout January and February of around 340,000 BTC.
$15bn 15%
▪ Bybit, in particular, has experienced a large decline in its open interest. As of
April 18th, Bybit’s OI accounted for 21% of the total OI in the bitcoin futures
market, in contrast to today's levels of 13%.
$10bn
▪ Bybit is, together with Binance, the exchange with the most frequent
liquidations. This suggests that traders on Bybit have a heftier risk appetite, 10%
preferring the highest degrees of leverage available.
$5bn
▪ Thus, the sharp decline in Bybits market share should be viewed as a healthy
sign for the market in general. Now, we’re likely seeing more calculated trades
take place with more sophisticated traders on FTX and CME entering positions. $0bn 5%
1 Jan 15 Jan 29 Jan 12 Feb 26 Feb 12 Mar 26 Mar 9 Apr 23 Apr
Global Open interest CME Market share Bybit Market share Binance Market share FTX Market Share
Source: Skew
Apr 27, 2021 9 Provided byThe Kimchi Premium is declining
The Kimchi premium is now trending downwards again. The peak
of this Kimchi premium cycle reached 20.2% on April 18th, with
bitcoin trading down 12.71% in the following week. BTCUSD (Bitstamp) vs BTCKRW dollar adjusted (Bithumb)
▪ The premiums on the South Korean bitcoin pairs have declined since April $100,000 70%
18th.
May 25th, 2017 60%
62.60%
▪ Three weeks ago, we mentioned the return of the Kimchi premiums, and
emphasized that while we could not firmly state if the premiums had
reached the peak levels, high Kimchi-premiums tended to signal an $10,000
50%
overheated market.
Jan 8th,2018 April 18th, 2021
Mar 17th, 2017 40%
▪ The premiums reached a peak of 20.2% on Sunday April 18th, and later 22.20% 47.30% 20.2%
declined to 2%, before showing signs of rising again as it now trails at $1,000
Kimchi Premium
around 6%. June 30th, 2019
BTCUSD (log)
8.50% 30%
Feb 21st, 2018
13.40% Mar 12th, 2020
▪ The declining Kimchi-premiums, in addition to the reduced funding rates Jan 5th, 2017
19.30% 8.00% 20%
and futures premiums, may be viewed as healthy signs for the market Nov 4th, 2015 Nov 14th, 2018
onwards. $100 11.80% 6.50%
BTC performance Jan 8th, 2020
5.90% 10%
Peak Kimchi Premium 1 week 30 days
Nov 4th, 2015 -24.0% -10.9%
Jan 5th, 2017 -19.6% 2.8% 0%
$10
Mar 17th, 2017 -13.3% 8.5%
May 25th, 2017 5.3% 11.6%
Jan 8th, 2018 -9.3% -49.4% -10%
Feb 21st, 2018 -1.3% -14.6% BTCUSD BTCKRW ($-adjusted) Kimchi Premium
Nov 14th, 2018 -18.9% -42.9%
$1 -20%
June 30th, 2019 6.6% -10.8%
Mar 12th, 2020 27.7% 42.2%
Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21
Jan 8th, 2021 -9.6% -4.4%
Source: Tradingview, Bitstamp and Bithumb
April 18th, 2021 -12.71% ?
Apr 27, 2021 10 Provided byInstitutional activity picking up in Ethereum
Trading volume exploding
The open interest on CME’s Ethereum futures has climbed steadily since
launch and is currently approaching $300m. In addition, the trading CME: Ethereum Futures
volume of the Ether futures has surged the last few weeks.
$350m $800m
▪ CME launched its Ether futures on February 8th, and over the last few weeks,
the trading activity in these futures has picked up.
$700m
$300m
▪ The open interest on CME’s Ether futures currently sits at $287m. This is 4.1% of
the global open interest in the Ether futures market, which is far lower than the $600m
CME share of the global OI in the bitcoin futures of 12%. $250m
$500m
▪ However, over the last weeks, the trading volume and open interest in the
Trading volume
Open Interest
Ether futures have grown significantly. $200m
$400m
▪ On Thursday, April 22nd,
as Ethereum reached a new ATH, the Ethereum futures
$150m
on CME saw a daily trade volume of $680m.
$300m
▪ The entire week last week saw substantially higher volumes on CME’s Ether $100m
futures than during its previous weeks. $200m
▪ The growing open interest and trading volume correspond with the approval $50m
$100m
of 4 Canadian Ether ETFs last week as Purpose Investments, CI Global Asset
Management, Evolve, and 3iQ all launched their ETFs.
$0m $0m
▪ Are we now witnessing the institutional adoption growing deeper into the 8 Feb 22 Feb 8 Mar 22 Mar 5 Apr 19 Apr
crypto industry?
Source: Skew CME (Open Interest) CME (Trading Volume)
Apr 27, 2021 11 Provided byValuation
Provided byAre we heading higher again?
Bitcoin / U. S. Dollar, 6H, Coinbase
Bitcoin dropped down to $47,000 this
weekend, but is already recovering
strongly. Are we heading higher again?
▪ Bitcoin lost $50,000 again on Friday, but
managed to reclaim that level quickly.
▪ The price is already heading towards
the resistance level around $58,000.
This is still a level we look out for, and
climbing above this level would be a
bullish reversal sign.
▪ A retrace and retest of the support
around $51,000 could be on the line
before climbing further.
▪ Some more consolidation and another
drop down to $47,000 would not be
very surprising in this mixed market
environment we are currently seeing.
Source: Tradingview, Coinbase
Apr 27, 2021 13 Provided byPremium on CME decreasing further
BTC Futures Annualized Rolling 3-Month Basis
60%
Premiums on BTC futures have stayed relatively flat over
the past week, despite the significant change in
sentiment. However, the premium on institutional- 50%
focused CME is decreasing further this week.
▪ The annualized 3-month basis has stabilized around 20% 40%
on most retail-focused platforms this week. We saw
levels closer to 15% this weekend, but the start of the
week has brought more confidence back in the futures 30%
market.
▪ The premium on CME is decreasing further. This morning, 20%
the annualized 3-month basis on CME was around 7%.
This is the lowest level since September last year.
10%
▪ This enormous gap is probably not just a sign of a more
bearish sentiment among institutional investors, but
shows the lack of liquidity on the offshore exchanges to 0%
arbitrage away these differences.
-10%
▪ Many institutional traders do not have access to these
markets but would probably jump on these lucrative
“cash and carry” trades if possible.
-20%
28 Feb 6 Mar 12 Mar 19 Mar 25 Mar 31 Mar 6 Apr 13 Apr 19 Apr 25 Apr
FTX BitMEX Deribit Binance CME*
Source: Skew.com *Closed Saturday - Sunday
Apr 27, 2021 14 Provided byNeutral funding rates for more than a week
BTC Price vs Funding Rates
The massive liquidations following last weekend's dump have
undoubtedly reduced the speculative FOMO. We’ve now seen
funding rates in the neutral territory since Sunday, April 18th.
▪ The funding rates have now trailed around the neutral
territory for more than a week.
▪ Neutral funding rates similar to what we currently are
experiencing have not been seen since late February, early
March when bitcoin consolidated between $45,000 and
$50,000.
▪ The fact that funding rates has remained neutral amid
bitcoin’s strong recovery yesterday is a healthy sign going
forward.
▪ Another metric further backing the promising signs from the
derivatives market is the relatively low open interest. On
Monday 27th of April, the bitcoin futures market reached the
lowest open interest recorded since March 8th
▪ This indicates that bitcoin’s recovery has been driven by the
spot markets, making the current price action seem more
sustainable.
Source: NYDIG Data
Apr 27, 2021 15 Provided byLarge option expiry on Friday
Options: Open interest at Strike price
(Deribit, expiry on Fri Apr 30th)
68,500 BTC options are set to expire on Deribit on Friday, with a 8000
notional value of $3.6 billion. The max pain price currently sits at
$54,000. 7000
▪ Friday marks the expiry for yet another round of monthly options. 6000
Open Interest (BTC)
Max pain
▪ As we’ve highlighted earlier, large option expiries have tended to be followed 5000
by large moves in the last few months.
4000
▪ Currently, 68,500 bitcoin are set to expire on Deribit, with a notional value of
$3.6 billion. 3000
▪ The max pain price currently sits at $54,000. 2000
1000
▪ Max pain is a calculation that shows at what price level option holders (buyers)
would as a whole suffer the maximum amount of financial pain. This is
calculated based on all open interest for the given expiry date and is not 0
concerned with any individual trader’s specific position.
$56,000
$54,000
$28,000
$44,000
$70,000
$76,000
$80,000
$24,000
$32,000
$52,000
$50,000
$68,000
$20,000
$36,000
$40,000
$64,000
$62,000
$88,000
$100,000
$120,000
$48,000
$58,000
$84,000
$60,000
$66,000
$72,000
▪ The max pain strike of $54,000 could provide an anchor for the short-term
price action in bitcoin and is a level to follow closely in the upcoming days.
Source: Deribit Calls Puts
Apr 27, 2021 16 Provided byBlockchain Activity
Provided byBitcoin on-chain summary: High fees this week
The transaction fees have remained higher than usual over the
last week and accounted for more than a fifth of the miner
revenue in the previous week.
▪ Since the coal mine incident in Xianjing, the hashrate has declined
substantially. However, over the last few days, the hashrate has
returned to its previous levels.
▪ The reduced hashrate led to fewer blocks creating, leading
transaction fees to fly. The average daily fees paid to miners
increased by 23.7% in the last week.
▪ Over the last week, fees contributed to near 22% of the miner
revenue, which is unusually high.
▪ The high fees have led to a further decline in transactions per day.
▪ With hashrate once again rising, we expect lower fees in the near
term.
Source: Bytetree
Apr 27, 2021 18 Provided byHuge bitcoin accumulations around the $55,000 BTC price level
On-chain data from Glassnode suggests strong support at the current price levels
A lot of bitcoin has changed hands lately. On-chain data UTXO Realized Price Distribution
suggests that buyers in the $30,000 to $41,000 interval and
₿ 800,000
$43,000 to $52,000 interval have sold to new holders at
around $55,000.
₿ 700,000
▪ The UTXO Realized Price Distribution (URPD) shows the number of
existing bitcoins last moved at each price by current investors.
₿ 600,000
▪ The URPD chart might provide a different perspective on bitcoin-
price support levels and could be an efficient tool to add to the BTC last moved in interval $53k-60k:
2.3m BTC
trader-toolbox. ₿ 500,000
On-chain support
BTC last moved in interval $43k-52k:
Peak on-chain support at $55k
1.5m BTC
284,000 BTC moved
Peak on-chain support at $47k 173,000
▪ The current state of the URPD suggests that 2.3 million bitcoin has BTC moved
changed hands at the $53,000 to $60,000 area. ₿ 400,000
BTC last moved in interval $30k-41k:
1.4m BTC
▪ When we last viewed the URPD chart on March 15th,
865,000 bitcoin
had been moved around the $54k to $58k area. Now this area ₿ 300,000
represents the largest block of bitcoin’s moved since the $10,000
area.
₿ 200,000
▪ Both the $30,000 to $41,000 area and $43,000 to $52,000 area
have been substantially decreased since the last time we viewed
this chart, suggesting that a majority of the active bitcoin hodlers ₿ 100,000
have now accumulated at prices around the current price levels.
▪ This suggests some profit-taking among the buyers following bitcoin ₿0
surpassing its former ATH. The current hodlers are likely not $647 $5,825 $11,002 $16,179 $21,357 $26,534 $31,711 $36,889 $42,066 $47,244 $52,421 $57,598 $62,776
interested in selling at the current levels, meaning that the level
around $54,000 to $58,000 now could provide strong support going Source: Glassnode
as we advance.
Apr 27, 2021 19 Provided byEthereum activity reaches new all-time high
Ethereum: Number of Active Addresses (7d Moving Average)
800,000
700,000
The number of active Ethereum addresses is at an all-time high of 680,000.
600,000
▪ Ethereum is going through a strong period of adoption, now illustrated by the vibrant on-
chain activity.
500,000
▪ The number of unique addresses that have been active in the network either as a sender or
receiver reached a new all-time high this week, with its 7-day average currently sitting at
680,000 active addresses.
400,000
▪ Ethereum surpassing $2000 led to a burst in activity, as the number of active addresses has
risen substantially throughout April. 300,000
▪ The previous all-time high in terms of active Ethereum addresses was reached on January
10th, 2018. Then, the 7-day average peaked slightly above 660,000 active addresses. 200,000
100,000
0
Apr 16 Oct 16 Apr 17 Oct 17 Apr 18 Oct 18 Apr 19 Oct 19 Apr 20 Oct 20 Apr 21
Source: Glassnode
Apr 27, 2021 20 Provided byDisclaimer
• The Weekly Update (the “Report”) by Arcane Research is a report focusing on cryptocurrencies, open blockchains and fintech. Information published in the Report aims to spread knowledge and summarise
developments in the cryptocurrency market.
• The information contained in this Report, and any information linked through the items contained herein, is for informational purposes only and is not intended to provide sufficient information to form the basis for an
investment decision nor the formation of an investment strategy.
• This Report shall not constitute and should not be construed as financial advice, a recommendation for entering into financial transactions/investments, or investment advice, or as a recommendation to engage in
investment transactions. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital asset before deciding to purchase or sell any such instruments.
• Cryptocurrencies and digital assets are speculative and highly volatile, can become illiquid at any time, and are for investors with a high risk tolerance. Investors in digital assets could lose the entire value of their
investment.
• Information contained within the Report is based on sources considered to be reliable, but is not guaranteed to be accurate or complete. Any opinions or estimates expressed herein reflect a judgment made as of the
date of publication and are subject to change without notice.
• The information contained in this Report may include or incorporate by reference forward-looking statements, which would include any statements that are not statements of historical fact. No representations or
warranties are made as to the accuracy of these forward-looking statements. Any data, charts or analysis herein should not be taken as an indication or guarantee of any future performance.
• Neither Arcane Research nor Arcane Crypto AS provides tax, legal, investment, or accounting advice and this report should not be considered as such. This Report is not intended to provide, and should not be relied on
for, tax, legal, investment or accounting advice. Tax laws and regulations are complex and subject to change. To understand the risks you are exposed to, we recommend that you perform your own analysis and seek
advice from an independent and approved financial advisor, accountant and lawyer before deciding to take action.
• Neither Arcane Research nor Arcane Crypto AS will have any liability whatsoever for any expenses, losses (both direct and indirect) or damages arising from, or in connection with, the use of information in this Report.
• The contents of this Report unless otherwise stated are the property of (and all copyright shall belong to) Arcane Research and Arcane Crypto AS. You are prohibited from duplicating, abbreviating, distributing,
replicating or circulating this Report or any part of it (including the text, any graphs, data or pictures contained within it) in any form without the prior written consent of Arcane Research or Arcane Crypto.
• By accessing this Report you confirm you understand and are bound by the terms above.
• Arcane Research is a department within Arcane Crypto AS, org. 994 608 673, and can be contacted at research@arcane.no or tbj@arcane.no
21 Provided byProvided by
You can also read
