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THE WEEKLY UPDATE
WEEK 7
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Feb 13, 2020 2
1 Market Update
• The strong bull run continues: BTC above
$10,000 and ETH gains over 25% in a week
• XRP flash crash on BitMEX – Down 60% in 1 Implied Probability of BTC Above Given USD Price at Maturity
minute 100%
• More investors looking into buying bitcoin?
• Volatility stays low – BTC price continues up
90%
80%
2 Valuation 70%
• Bitcoin is above $10,000 – What’s next? 60%
• Retail looking more bullish than institutional
Probability
investors as premium rates spike 50%
• 10% probability for new all-time high in
September June
40%
September
30%
20%
3 Blockchain Activity 10%
10%
• Strong HODLing?
Data collected from Skew.com
• Exchange deposits not affected by the recent
0%
price rise, indicating that less investors want to
2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000
sell their bitcoin
BTC (USD)
THE NEWSROOM
Bitcoin Lender BlockFi Raises $30M Wells Fargo Invests $5M in Startup FC Barcelona Launching Crypto
in Series B Led by Peter Thiel’s Valar Connecting Crypto Exchanges and Token for Fan Engagement
Ventures Banks
Fresh on the heels of an $18.3 million Series A Banking giant Wells Fargo is backing blockchain The soccer club FC Barcelona has launched a
funding round in August, crypto lending startup forensics firm Elliptic. The investment is partly crypto token seeking greater engagement with
BlockFi has secured a $30 million Series B. geared toward a recently launched product that fans. Created in partnership with blockchain firm
helps crypto exchanges win banking relationships, Chiliz, the Barça Fan Tokens ($BAR) will be used to
Elliptic said. allow fans to vote in polls and surveys on Chiliz'
mobile app, Socios.com.
Feb 13, 2020 4
Lasting bull run continues this week
BTC above $10,000 and ETH up over 25%
Top ten by market capitalization Last Last week Last month YTD
Bitcoin Correlation: Gold correlation is slowly fading out
Bitcoin 10198.10 4.52% 15.70% 43%
ETH XRP GOLD S&P500
90-day correlation
Ethereum 268.45 26.22% 62.00% 107% (weekly change included)
XRP 0.32 14.25% 37.96% 72%
Bitcoin Cash 467.44 6.54% 34.27% 131% BTC 0.844 -0.041 0.728 -0.057 0.077 -0.054 -0.013 0.028
Bitcoin SV 354.92 22.17% -16.00% 266% Source: coinmetrics.io
Litecoin 80.28 9.77% 37.42% 95%
EOS 5.26 16.51% 38.41% 104% Top 3: Percentage Change in Price Over the Last Week
Binance Coin 25.50 24.71% 52.91% 87% 35%
Tezos 3.15 47.31% 141.40% 136%
Cardano 0.07 14.61% 65.87% 109% 30%
ETH
25%
Best performing Last Last week Last month YTD
Hedera Hashgraph 0.06 213.00% 524.70% 526% 20%
Tezos 3.15 47.31% 141.40% 136% XRP
15%
Bitcoin Diamond 1.12 43.37% 50.77% 210%
Waves 1.42 41.57% 64.22% 36%
10%
ChainLink 3.96 37.78% 67.17% 121%
5%
BTC
Worst performing Last Last week Last month YTD
0%
ICON 0.40 -12.15% 177.40% 244%
IOTA 0.32 -5.75% 49.41% 103%
-5%
Ethereum Classic 11.82 -1.04% 73.57% 164%
FTX Token 2.49 0.00% 15.88% 17% -10%
HedgeTrade 2.62 3.89% 20.19% 52% 6 Feb 7 Feb 8 Feb 9 Feb 10 Feb 11 Feb 12 Feb 13 Feb
Last week of top 50 by market capitalization
Source: cryptowat.ch Source: cryptowat.ch
Feb 13, 2020 5Flash crash on BitMEX – XRP down 60% in 1 minute
1-Minute Candles for XRP-USD on BitMEX
After just being listed on BitMEX last week, something strange
happened with the XRP price yesterday.
• Just within 1 minute, the price crashed down 60% before
climbing up again instantly.
• BitMEX offers highly leveraged trades of up to 50 times margin
on collateral.
• This led to many customers being liquidated, even with stop
orders set well above their liquidation prices.
• Due to volume of stop orders and low liquidity, there was a lack
of counterparties for several stop orders. This led to customers
getting stopped out at a lower price or even liquidated.
60% drop
• It is of high importance to take liquidity seriously when trading
with high leverage, especially with larger positions.
• BitMEX took no responsibility for this flash crash, and said the
system acted as designed.
Source: tradingview.com
Feb 13, 2020 6Altcoins keep flying – Small Caps up almost 40% in two weeks
Percentage of Total Market Capitalization
BTC ETH BCH LTC XRP DASH NEM XMR IOTA NEO
Market
61.32% 9.69% 2.81% 1.68% 4.67% 0.40% 0.21% 0.52% 0.30% 0.35%
Share
Weekly
Change
-3.7% 16.2% -3.1% -1.2% 6.1% -2.4% 10.5% 4.0% -11.8% 6.1%
The crazy run up among altcoins continues this week. Yet another week Source: Coinpaprika.com
where bitcoin is getting outperformed.
▪ Small Caps is still in front and is up 37% so far in February, in less than
Monthly Performance of Market Capitalization Weighted Indexes
two week. 40%
Small
35%
▪ This is really starting to look like an alt season – with Small Caps
outperforming bitcoin by almost 30 percentage points over the last two
30% Mid
weeks.
25%
▪ Bitcoin’s market share is continuing downwards this week and is
now almost down to 61%. 20%
Large
15%
▪ For the second week in a row, ETH adds 16% to its overall market share. Bitcoin
Ether has been climbing more than 25% in price over the last week. 10%
5%
0%
1 Feb 2 Feb 3 Feb 4 Feb 5 Feb 6 Feb 7 Feb 8 Feb 9 Feb 10 Feb 11 Feb 12 Feb 13 Feb
-5%
Source: Bletchleyindexes.com
Feb 13, 2020 7Are we approaching “extreme greed” in the market?
The Fear & Greed Index is now at 65 with yet another week with a greedy
market sentiment. If this rise continues, we could soon be approaching 65
“extreme greed” – not seen since June 10 last year, when the price had
its last touch on $13,000 before starting the real downtrend.
Extreme Greed
100
90
Now Last week Last month
80
Greed (65) Greed (61) Neutral (49)
70
60
50
40
30
20
10
Extreme Fear Source: alternative.me
0
February 19 March 19 April 19 May 19 June 19 July 19 August 19 September 19 October 19 November 19 December 19 January 20 February 20
Feb 13, 2020 8More investors looking into buying bitcoin?
Google Searches for “Buy Bitcoin” (2019-2020)
100
The price action this far in 2020 seems to attract new investors into the
bitcoin space.
▪ Google search interest for the term “buy bitcoin” has only been higher
once the last 365 days, at the peak of the bull run of June 2019, when 80
bitcoin reached prices above $13.000.
▪ Both peaks of Q2 2019 came during volatile periods featuring massive
upwards price action in bitcoin with over 30% weekly retunes.
60
▪ However, this time it might be different. This search spike comes after
an organic period of growth following a strong start of the year. The price
action prior to the search spike has been far less explosive in the short
term than during the previous spikes. 40
▪ This might indicate that the fresh interest into buying bitcoin is less
affiliated with “FOMO”, compared to the prior occurrences.
▪ Bitcoin breaching and staying above the psychological $ 10 000 resistance 20
might also explain the new inflow of interest in google searches.
0
Feb 19 Mar 19 Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Feb 20
Source: Google Trends
Feb 13, 2020 9Solid volume still backing the recent price rise
The 7-day average real trading volume* keeps rising, supporting the price
rise this year. The 7-day average is now close to a daily level of $800 million,
and it will be interesting to see if we can surpass the daily volume top in
January of $957 million.
3,500
3,000
2,500
Dollar (Million)
2,000
New yearly
volume top
1,500 next week?
1,000
500
Real BTC Daily Volume (7-day average)
0
Jan 19 Feb 19 Mar 19 Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20
Source: cryptowat.ch *as defined by Bitwise Asset Management. ItBit exchange excluded.
Feb 13, 2020 10Bitcoin price up – volatility down
The 30-day volatility has been trending downwards lately and is now on the same level as the beginning of the year. Since then, bitcoin has seen a strong upswing in price,
climbing from $7,000 dollar to above $10,000. There is clearly something different with this recent bull run compared to last year’s price movements. We haven’t
seen a large spike in volatility since late October. If we compare the beginning pf 2020 to the bull run in the first half of 2019, we don’t find the same extreme daily
returns and spikes in volatility. As mentioned last week, this is an indication that the current appreciation is more robust than what we have seen in a long time.
The low volatility recently could be related to the increasing derivates market for bitcoin, which keeps the price action more stable.
7%
6% Completely different
volatility during the
last bull run
5%
4%
3%
2%
Jan 1
1%
BTC-USD Volatility (30-day average)
0%
Feb 19 Mar 19 Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20
Source: cryptowat.ch
Feb 13, 2020 11VALUATION
Bitcoin above $10,000 – What’s next?
▪ The bitcoin price pushed through the resistance of
$10,000 last weekend, a level we haven’t seen since
the “China pump” in late October.
▪ Pushing all the way up to $10,500 before meeting
resistance, which is exactly where the price stopped
after the “China pump”.
▪ The bitcoin price has now flipped resistance to
support around $10,100.
▪ If the price continues upwards from these levels,
resistance is likely to occur around $10,700. This level
acted as resistance last year and is also the next
monthly resistance level that the must be surpassed.
▪ If bitcoin continues past that resistance level, the
area around $11,500 could be the next resistance in
the strong upwards momentum that we have seen
lately.
▪ If the price turns to the downside, the first likely
support level looks to be around $9,300 if we look at
the POC.
Source: Tradingview
Feb 13, 2020 13Retail more bullish than institutional investors
BTC Futures Contracts Settlement Prices (February - June)
11,000
*Other (Average)
10,886
▪ After a week with equal BTC futures premium rates, the
retail exchanges are now ahead of CME.
10,800
CME 10,785
▪ The premium rates for bitcoin are now close to 6%
on average for the June contracts on the retail
exchanges. 10,600
▪ The March premium rates went in opposite directions
this week, and CME is down to 2.5% while others are up 10,400
BTC (USD)
to 3.4%.
Last week
10,200
Last week
10,000
Premium Rates for BTC Contracts
February 2020 March 2020 June 2020 9,800
CME 0.90% 2.51% 4.84%
Other
1.44% 3.38% 5.96% 9,600
platforms
Feb 20 Mar 20 Apr 20 May 20 Jun 20
*Other: Kraken, Bitmex, Deribit, FTX
Source: Kraken, CME, Bitmex, Deribit, FTX
Feb 13, 2020 14Retail premium rates for March are increasing fast
40%
BTC Futures Annualized Forward Curve (February – June)
▪ The bullish sentiment continues this week, at least for the retail exchanges.
35%
▪ The annualized premium rates for March have been climbing up to a rate of
28% on average for the retail exchanges.
30%
▪ This is almost 3x the average premium rate over the last three months.
25%
BTC March 2020 Futures Contracts - Annualized Premium Rates (Historically)
30%
20%
CME Above 27%
Other platforms
25%
Average CME 15%
CME
20% Average Others
Others (Average)
10% Last Week
15%
Last Week
10%
5%
Feb 20 Mar 20 Apr 20 May 20 Jun 20
5%
0%
29 Oct 12 Nov 26 Nov 10 Dec 24 Dec 7 Jan 21 Jan 4 Feb
Source: Kraken, CME, Bitmex, Deribit, FTX
Feb 13, 2020 1510% probability for all-time high in September
Implied Probability of BTC Above Given USD Price at Maturity
100%
90%
▪ By looking at options prices for BTC collected from
80%
Skew, we can get indications on what traders
expect in 2020.
70%
▪ Options trading is now indicating a 50% probability
for BTC to be above $10,000 by the end of June. 60%
Probability
▪ Looking even further ahead, there is a 10% 50%
probability of bitcoin being above $20,000 by
the end of September. 40%
June
September
▪ The probability for an all-time already in June is
30%
nearly half, with only 6%.
20%
10%
10%
0%
2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 28,000
BTC (USD)
Data collected from
Feb 13, 2020 16BLOCKCHAIN ACTIVITY
Strong HODLing: Investors not ready to sell their bitcoin?
▪ Data provided by Glassnode show that we could still be far from a price top for
bitcoin, since there is no significant spike in the count of transfers to exchange
addresses.
Bitcoin Exchange Deposits (7-day average)
▪ In previous bull runs, the exchange deposits has increased, as investors look to sell.
▪ However, recent data show exchange deposits have been relatively flat since the BTC 200
Thousands
price started to move upwards in the beginning of January. $16,200
180
▪ This may indicate that people are not ready to sell their bitcoin, and that a
price top can still be far away. 160
▪ As noted in previous updates, these on-chain metrics have their weaknesses. As 140
exchanges has acquired more bitcoin over the last years, this could impact metrics
$5,400
like exchange deposits.
Count of transfers
120
BTC (USD)
▪ Moreover, this metric only measure the count of transfer and not the total amount of 100
bitcoin. This means that the value transferred to exchanges could be different.
80
$1,800
On-Chain Bitcoin Activity (7-day average) 60
Last Last week Last month YTD 40
Transaction Value Adjusted (mUSD) $6,579 0.46% 45.26% 104.06% 20
Transaction Count 327,720 1.04% 3.98% 11.03%
0 $600
Miner Fees (USD) $283,214 36.21% 41.14% 162.95%
Apr 17 Jul 17 Oct 17 Jan 18 Apr 18 Jul 18 Oct 18 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20
Active Addresses 777,294 -0.25% 7.69% 21.31%
Source: Glassnode Data provided by
Feb 13, 2020 18Disclaimer
• “The weekly update” (the report) by Arcane Research is a report focusing on cryptocurrency, open blockchains and fintech. Information published in the report aims to spread knowledge about developments in the market for
cryptocurrencies. All content that is published is for informational purposes only and no content is intended to be a recommendation for making financial transactions or investments. We do not provide financial advice and
are not responsible for readers losses in the market
• We have made every reasonable effort to ensure that the information in the report is accessible, accurate and up-to-date, but subject to technical problems, errors and inaccurate information may occur.
• Investing in cryptocurrency and technology companies involves considerable risk. To understand the risk you are exposed to, we recommend that you perform your own analyzes and seek advice from an independent and
approved financial advisor before deciding to take action. Investments also have tax consequences that you must take responsibility for investigating and living.
• We disclaim any responsibility for expenses, losses (both direct and indirect) or damage arising from, or in any way related to, the use of information in this report. In other words, users are fully responsible for their own
investment activities.
• 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
Feb 13, 2020 19Subscribe to The Weekly Update Contact: research@arcane.no
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