Eray Sirin
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Eray Sirin

Weekly Report: Blockchain #29 | Week 50

(December 12, 2022 — December 18, 2022)

Significant Developments of the 50th Week:

◽️ Chinese stocks closed the Week lower as news of the rising death toll in Beijing due to COVID-19 spread in local and international media. The anecdotal real-time data point to serious declines in the use of roads and public transport as fear of the virus restricts activities in the same way as official curfews.

◽️ The Fed increased the interest rate by 50 basis points to 4.50%. Having increased interest rates by 75 basis points in the last four meetings, the Fed made a lower rate hike by changing its aggressive interest rate policy at the previous FOMC meeting of the year. In addition, the Eurozone November 2022 annual inflation rate was announced as 10.1 percent and -0.1 percent monthly.

◽️ DXY dropped to 103.5 levels, a very important support during the Week. DXY, which started to rise again with the appreciation of the US Dollar after the Fed’s interest rate decision, returned to the levels it opened the Week and closed at 104.8 levels.

🪙 With all these developments, the Crypto Money Market closed the Week negatively. Total Crypto Market Cap, which opened Week 50 at $805B, experienced a decrease of about 4.5%, closing the Week at $768.6B. It hit an $848.1B high and a $753.1B low during the Week.

Last three Week closes of Crypto Market Cap:

Week 48: $814.5B

Week 49: $805.6B

Week 50: $768.6 🔻

Bitcoin started positive with a 7% increase in the Week, but it could not maintain this rise and closed it negatively. Bitcoin, which created the Week at $17.085, experienced a 2% decrease after the interest rate at the Fed meeting on December 14 and closed the Week at $16,738. During the Week, the highest $18,387 and the lowest $16,527 were expected.

In Ethereum, the outlook is not much different. Ethereum, which opened the Week at $1,263, experienced an increase of about 7% but faced this situation towards the weekends. Ethereum, which experienced an %6.3 decrease from the Week’s opening, closed the Week at $1,183. During the Week, the highest $1,352 and the lowest $1,155 were expected. Also, the annual spread rate of Ethereum, which is my transaction every Week, is currently at 0.01% (weekly average).

The outlook for other Altcoins is generally negative:

◽️ The best performance this Week came from OKB (OKB), the currency released by cryptocurrency exchange OKEx, with an increase of 3%.

◽️ The worst performer of the Week came from Trust Wallet Token (TWT), which provides various benefits and incentives to Trust Wallet users with a decrease of x%.

◽️ Another bad performance of the Week came from Chain (XCN), whose results dropped by 33%, enabling it to build better financial services from scratch.

Best and Worst Performance of the Week (Market Cap Top 80)

🟢 OKB — %3 📈 — 🔴 TWT — %35.3 📉

Highlights of the Week

◽️ Sam Bankman-Fried was arrested in the Bahamas before his pre-trial virtual appearance by the US House Financial Services Committee for his first hearing on corporate bankruptcy.

◽️ FC Barcelona has signed a new global partnership agreement with WhiteBIT.

◽️ The exporter of USDT, Tether, announced the process of moving 3 billion USDT from the Tron network to the Ethereum network and that they are trying to reach it with Binance in this transaction.

◽️ PayPal announced integration with crypto wallet MetaMask.

◽️ Microsoft has brought new maintenance to cloud services such as crypto mining.

◽️ Former CEO of Twitter, Jack Dorsey, donated 14 Bitcoins to fund the students of the decentralized social network Nostr.

◽️ US crypto exchange Binance US has launched its Binance Pay service. The Binance Pay feature was first made publicly available outside the US in 2021 by global Binance.

Weekly On-Chain Exchange Flow

The outflow of Bitcoin and Ethereum from exchanges carries the assumption that the respective assets are withdrawn to private wallets, not to be sold. Therefore, it is interpreted as positive.

The inflow of Bitcoin and Ethereum to the exchanges assumes that the respective assets enter the exchanges to be sold. Therefore, it is interpreted as negative.

With Tether, the situation is completely different. It is assumed that USDT inflow exchanges to buy assets. Therefore, the inflow of USDT into the stock markets is interpreted as positive.

The outflow of USDT from the stock markets carries the assumption that investors withdraw the money into their accounts and turn it into cash. Therefore, it is interpreted as negative.

According to glassnode data in the 50th Week;

🟢 $1.3B worth of Bitcoin outflowed the exchanges. It can be interpreted quite positively in terms of the amount size. Last Week, $330M worth of exchanges were outflowed.

🟢 $1.4B worth of Ethereum outflowed exchanges. It can be interpreted quite positively in terms of the amount size. Last Week, $383.4M worth of exchanges were outflowed.

🔴 $1.4B worth of USDT outflowed the exchanges. It can be interpreted quite negatively in terms of the amount size. Last Week, $175.0M worth of exchanges were inflowed.

Top Assets by Market Cap

With Bitcoin Market Cap falling from $325.6B last Week to $321.7B this Week, Bitcoin dropped from 26th to 27th place on the Best Assets by Market Cap.

Fear and Greed Index

The Fear and Greed Index closed the 49th Week at the ‘26’ level.

For weeks, the Fear and Greed indicator has been anchored at the ‘26’ level. As we approach the end of 2022, the Crypto Market cannot escape its fear levels. The Fear and Greed Index, which saw its highest level of ‘31’ in the 50th Week, made its weekly cap at ‘26’ again.

The index started the new Week at the level of ‘29’.

Social Media Interactions

None of the coins and tokens on the list should be bought just because they get high engagement on social media! Also, the ‘scam’ project can be found on the list!

Binance Coin (BNB), which is in the 3rd place on the list, has kept its 3rd place this Week, despite declining the number of social interactions for weeks. At the end of a relatively stagnant week, Bitcoin and Ethereum found their place in the first two places of the list, as always, while the number of social interactions decreased considerably.

Week 50 Social Media Interaction Numbers (Top 3):

  1. Bitcoin: 1.81M (Last Week: 2.55M)
  2. Ethereum: 1.08M (Last Week: 1.63M)
  3. Binance Coin: 537.9M (Last Week: 833.4K)

According to The Block data, in the 50th Week, there was a decrease in the number of Tweets for Bitcoin, while the number of Tweets for Ethereum saw a slight increase after the sharp decline last Week. In general, Bitcoin and Ethereum are far from the periods in which they have received the most interaction for months.

Bitcoin Performance by Month

When we look at the December performances of Bitcoin in the past years, a similar image dominates the November. Bitcoin closed with green candles in December, with a few exceptions. While almost all of the rises are quite strong, we can say the same for the declines in general. Macro-scale events, especially the Fed, and updated roadmaps in the fight against inflation seem to determine whether this month will close in green or red. Finally, three of the last four December performances have been negative. However, there is absolutely no such thing as this situation will always continue in the same way.

As of the third Week of December, Bitcoin displays a negative outlook, although not deep. If the decline gets deeper, we can see a situation close to the December performances of the last five years. As we approach the new year, we will be able to see more clearly what awaits us in the coming days.

DeFi

Some of the DeFi News of the 50th Week:

◽️ According to CertiK analysis, the Lodestar protocol is now functionally bankrupt because of Lodestar Finance’s $5.8 million exploit on Dec.

Raydium, an arrest resulted in more than $2 million in losses.

DeFi Market Cap closed Week 50 with a big red candle. DeFi Market Cap, which opened the Week at $36.3B, closed at $32B with a decrease of approximately 11.6%. DeFi Market Cap has hit $36.8B highs and $31.3B lows during the Week.

DeFi Market Cap last three weeks closes:

Week 48: $36.5B

Week 49: $36.2B

Week 50: $32B 🔻

When we look at the TVL ratios in All Chains shown in blue in the chart above, we see that Ethereum’s Dominance has increased compared to last Week. Ethereum owns about 66.7% of TVL on All Chains, and Ethereum Dominance was 65.9% last Week.

TVL Amount in All Chains (without Double Count):

Week 48: 42.7B

Week 49: $41.8B

Week 50: $39.7B 🔻

According to the Defillama data, Week 50, TVL amounts of Chains generally have a negative image (top 10).

◽ There was a very strong $1B decrease in the Ethereum TVL last Week. In Week 50, there was another decrease of approximately $1.4B.

Binance Smart Chain (BSC) TVL decreased by approximately $980M compared to last Week, and Tron (TRON) TVL decreased by roughly $40M.

There was only one change in the list based on the amount of TVL in all chains.

Arbitrum moved up to 4th place, with Polygon falling to 5th place with an increase of approximately $70M in TVL and a decrease of about $50M in Polygon.

If we look at the number of protocols on the chains, Ethereum is at the top with 614 Protocol, and Binance Smart Chain is second with 514 Protocol.

Increasing or high number of protocols does not mean anything by itself. The quality of the protocols is of great importance.

DeFi Protocol Revenues

According to data from The Block, the monthly decline in DeFi revenues ended in August. DeFi Protocols peaked in revenue in November 2021 and has declined ever since. DeFi Revenues in August 2022 closed above July, ending the nearly 9-month decline. September remained below the August data.

DeFi protocol revenues were rising in November after a long hiatus. DeFi protocol revenues, which seem quite low as of the third Week of December, are well behind November.

October: $48.5M

November: $77.2M

December*: $21.5M (*December 19)

Stablecoins

Stablecoin Market Cap’s last three weeks’ closes (according to Coinmarketcap):

Week 48: $143.4B

Week 49: $142.9B

Week 50: $141.7B 🔻

◽️ Tether (USDT) Market Cap has seen a slight increase of about 0.7% compared to last Week. Tether has a Market Cap of $66.1B as of Week 50 and a Market Cap of $65.7B the Previous Week.

◽️ USDC Market Value increased by 5.2% compared to last Week. USDC has a Market Cap of $44.9B as of Week 50, and last week it had a Market Cap of $42.7B.

◽️ BUSD Market Cap also saw a massive drop of about 16.6% this week compared to last Week. BUSD has a Market Cap of $18.4B as of Week 50, and last week it had a Market Cap of $22.1B.

During the year, the market capitalization gap between Tether (USDT) and USDC had fallen to $10 billion. However, this difference has increased for weeks and ended at $ 26.6 billion as of the 44th Week. Finally, in the 50th Week, the difference is 21.2 billion dollars.

In May 2022, Tether (USDT) Market Cap was $83B, USDC Market Cap was $48B and BUSD Market Cap was $18B.

Stablecoin Market Dominances according to coingecko data (Top 3):

  • Tether Market Dominance: 48.2% (Last Week: 47.5%)
  • USDC Market Dominance: 32.7% (Last Week: 30.9%)
  • Binance USD Market Dominance: 13.4% (Last Week: 16%)

Bitcoin On-Chain

On-Chain data for the 50th Week of 2022:

Number of New Addresses

The number of unique addresses that appeared for the first time in a transaction of the native coin in the network.

We can say that the Number of New Addresses generally moves in direct proportion to the Bitcoin price.

Week 48: 2.97M

Week 49: 2.90M

Week 50: 3.04M 🔺

SOPR

The SOPR a very simple indicator. It’s calculated from spent outputs. It’s the realized value (USD) divided by the value at creation (USD) of the output. Or simply: price sold / price paid.

SOPR > 1 means investors are in profit.

SOPR < 1 means investors are at a loss. It can be thought of as a buying zone.

In addition, SOPR generally moves in parallel with the price.

Week 48: 0.983

Week 49: 0.980

Week 50: 0.991 🔺

NUPL

Net Unrealized Profit and Loss (NUPL) is the difference between market cap and realized cap divided by market cap. Assuming that the latest coin movement is the result of a purchase, NUPL indicates the total amount of profit/loss in all the coins represented as a ratio. It could be interpreted as the ratio of investors who are in profit.

Values over ‘0’ indicate investors are in profit and an increasing trend in value means more investors are beginning to be in profit.

This phase indicates the increasing reason to take profit which leads to an increase in sell pressure.

Week 48: -0.19

Week 49: -0.17

Week 50: -0.16 🔺

MVRV

The ratio of coins Market Cap to its Realized Cap which indicates whether the price is overvalued or not.

Historically, Values over ‘3.7’ indicated price top and values below ‘1’ indicated price bottom.

Week 48: 0.83

Week 49: 0.85

Week 50: 0.85

Puell Multiple

The ratio of the value of coins daily issuance to its yearly average which indicated clear buy and sell areas after logarithmized.

Values over ‘6’ indicate possible top and under ‘0.4’ indicate possible bottom.

Week 48: 0.51

Week 49: 0.59

Week 50: 0.57 🔻

MPI (Miners’ Position Index)

Miners’ Position Index (MPI) is the ratio of total miner outflow (USD) to its one-year moving average of total miner outflow (USD).

Higher value shows that miners are sending more coins than usual which indicates possible selling.
If miners send some proportion of their reserve at the same time, it could trigger a price drop.

Week 48: -0.92

Week 49: -0.89

Week 50: -0.66 🔺

Total Hash Rate

Mining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack.

Although Bitcoin’s exact hashing power is unknown, it is possible to estimate it from the number of blocks being mined and the current block difficulty.

Week 48: 250.1 EH/s

Week 49: 261.9 EH/s

Week 50: 254.9 EH/s 🔻

Note: No metric should be used alone!

Nothing in this report should be construed as investment or trading advice.

Communication:

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