The Week Onchain Newsletter Gaining Ground Bitcoin continues to lead as one of the best performing assets globally in 2023. Not only has BTC appreciated over 140% YTD, it has more than doubled relative to gold, and still dominates against the rest of the digital asset industry.
Ethereum and DeFi Twists and Turns The growth rate of the Ethereum validator set has slowed in recent weeks, as an increasing number of validators voluntarily exit. This has slowed the rate of ETH issuance. Alongside increasing ETH burnt via EIP1559 due to growing network activity, the ETH supply has turned deflationary once again.
The Week Onchain Newsletter Keeping A Firm Grip The volume of Bitcoin supply in profit has reached the levels last was seen 2 years ago as the market came off the Nov 2021 ATH. However, the magnitude of unrealized profit held within these coins remains modest, and thus far insufficient to motivate long-term holders to lock in profits.
The Week Onchain Newsletter Supply Squeeze The fourth Bitcoin halving is fast approaching, being an important milestone both for the asset, and for investors. In this edition, we deep dive into the impressive tightness of BTC supply, and demonstrate how we can measure investor accumulation patterns in the lead up to the event.
The Week Onchain Newsletter The Tightening of Supply The Bitcoin Supply is historically tight, with an all-time-high in coins held by Long-Term investors, and impressive rates of accumulation taking place. In this edition we explore this tightness using several on-chain supply heuristics and metrics.
The Week Onchain Newsletter The Capital Waterfall The digital asset market continues to post impressive relative performance, with both BTC and ETH appreciating meaningfully against USD and gold. However, within the industry, Bitcoin dominance continues to rise, as indicated by several indicators and approaches for observing capital rotation.
The Week Onchain Newsletter A Breath of Fresh Air Bitcoin prices have broken to new yearly highs, trading above the mid-cycle price level of $30k, and reaching $35k. The market found sufficient strength to break above several important psychological pricing levels, making the weeks that follow important to keep an eye on.
The Week Onchain Newsletter The Cycle of Bitcoin Changing Hands Capital rotation within digital assets markets occurs both between assets, as well as internally as coins change hands at different acquisition prices. In this edition, we develop two indicators based off the Realized Cap and NUPL to track this rotation of capital between investors.
The Week Onchain Newsletter Capital Flows, Exchanges and Altseason Liquidity across the Digital Asset landscape continues to rescind. In this edition we assess the activity of both the On and Off-chain environment, and produce a new framework to help identify peak Altseason regimes.
Ethereum and DeFi stETH's Effect on Ethereum Liquid staking transforms the supply dynamics of ETH and creates a shift in the demand for Ethereum's native token. stETH becomes particularly attractive on lending platforms, while stETH liquidity on decentralized exchanges diminishes.
The Week Onchain Newsletter Inscriptions, Mempools and Miners Inscriptions have been a significant buyer of Bitcoin blockspace since their introduction in Feb 2023. In this edition, we explore whether inscriptions are displacing monetary transfers, and how the increase in fees has impacted miner profitability.
The Week Onchain Newsletter Investor Confidence Slides With almost all Short-Term Holders now underwater on their position, sentiment has shifted towards the negative. In this report, we explore several measures to track investor sentiment. We develop indicators which assess divergences between the market and observed investor behavior.
The Week Onchain Newsletter Liquidity Drought Liquidity across the digital asset market continues to dry up, with both on-chain and off-chain volumes reaching historical lows. Whilst HODLing remains the market preference, a significant proportion of the supply is teetering on the edge of falling into a significant unrealized loss.
Ethereum and DeFi Tracking Sentiment via Liquidity Pools Volatility has returned to digital assets markets, with performance of ETH and many tokens experiencing outsized drawdowns. Derivatives markets are suggesting liquidity continues to move higher up the risk curve. We also deep dive into how liquidity pools provide market information.
The Week Onchain Newsletter Evaluating Exchange Risk With hindsight and lessons learned from FTX, the monitoring of exchange related risks is a critical component of digital asset risk management. In this report, we develop three indicators which may help highlight periods of heightened counter party risk.
The Week Onchain Newsletter Bitcoin Flash Crash The Bitcoin bulls have been caught off guard this week, as the largest single day sell-off of the year sends BTC prices below $25k. A deleveraging in futures markets appears to be the catalyst, however a bigger concern may be the 88.3% of Short-Term Holder supply now held in an unrealized loss.
The Week Onchain Newsletter Exhaustion and Apathy The Bitcoin market has reached a stage of extreme apathy and exhaustion, with volatility measures and several key on-chain indicators reaching all-time-low readings. With the market being somewhat top-heavy, we assess how investors are responding to the boredom.
The Week Onchain Newsletter Volatility Crush Bitcoin prices are infamously volatile, however the market is currently experiencing an extreme volatility compression. Whilst options markets reflect this, it suggests that Bitcoin is either no longer infamously volatile... or volatility could be mispriced.
Ethereum and DeFi Is DeFi Back in Business? Regulatory conditions in 2023 have been a tug-of-war between positive and negative news, with altcoins and DeFi tokens being most heavily impacted. With MKR and COMP experiencing significant out-performance in recent weeks, we explore how we can extract information from changes in DEX liquidity.
The Week Onchain Newsletter Whale Watching Whale entities for Bitcoin are often cited as key parties that can have an outsized influence on price performance. In this edition, we isolate out Whale activity, which has seen a dramatic uptick over recent months, and develop a suite of tools to track their behavior.
The Week Onchain Newsletter Choppy and Sideways Despite BTC setting a temporary yearly price high of $31.7k, the Bitcoin market remains constrained within an extremely tight trading range. Several metrics indicate a slow and steady capital inflow, with many resembling the choppy market conditions seen in the 2016 and 2019-20 periods.
The Week Onchain Newsletter Stuck in the Middle Bitcoin prices have reached the $30k 'mid-point' of the 2021-22 cycle, with several metrics approaching levels associated with the 're-accumulation period' seen in past cycles. Inscriptions are cooling off, however monetary transactions are picking up steam once again.
The Week Onchain Newsletter The Surge in Liquid Staking Since the Ethereum Shanghai upgrade, a very clear market preference for liquid staking tokens has emerged. Lido's stETH maintains an impressive dominance, with DeFi capital flows suggesting it has become a preferred collateral asset.
The Week Onchain Newsletter How Many Bitcoin Are For Sale? With a gold rush of applications for a Bitcoin ETF filed this week, a key question is, how many Bitcoin are active and available for sale? In this report, we try to measure the available supply, and assess how demand impacted valuations in past cycles.
The Week Onchain Newsletter A Volatile Road to Nowhere Volatility, volumes, and realized values are at multi-year lows, indicating that Bitcoin investor apathy is firmly in play. However, under the surface, HODLers continue their classic slow and steady accumulation, with the halving now less than 1yr away.
