The Week On-Chain (Week 36, 2020)

Despite continued strong on-chain fundamentals, BTC lost over 11% of its value in Week 36 - but it still outperformed altcoins, which took an even larger tumble.

The Week On-Chain (Week 36, 2020)

Bitcoin Market Health

Along with the rest of the market, the price of BTC fell quite significantly during Week 36. Bitcoin started out the week at $11,622 and ended it at $10,343. It briefly dropped below the $10k mark on Saturday, but quickly recovered, finding resistance at this point and rising back above $10,100.

Bitcoin on-chain fundamentals stayed consistent in Week 36. GNI remained at 60 points, showing that fundamentals remain solid, despite the price decrease. The Liquidity subindex saw significant gains, while Sentiment experienced a large drop, likely due to price uncertainty.

Network Health stayed at a healthy 74 points during Week 36. This subindex saw a 1 point increase in the network growth subcategory, while network activity dropped by 1 point. This was due to a small increase in new adoption, while on-chain activity slowed slightly.

Liquidity increased significantly, gaining 14 points to take it to a score of 62 points overall. Trading liquidity saw a large uptick as BTC flowed onto exchanges, while transaction liquidity went up due to an increase in on-chain transactions from the beginning of the week.

Sentiment saw a large decrease during Week 36, dropping to 27 points from 52 the previous week. While saving behavior increased - likely due to hodlers acquiring more BTC at lower prices - overall investor sentiment decreased as the supply of BTC in profit went down.

Glassnode Compass

For the 15th week in a row, the compass remained in Regime 1, indicating an overall bullish outlook. However, the downward price movement led to price performance decreasing.

As a result, BTC is inching closer to the transitional Regime 3, a zone which indicates strong on-chain fundamentals but a negative price trend. Further decreases in price over the coming week may take the compass out of the green zone for the first time in nearly 4 months.

Bitcoin has consistently shown correlation with traditional financial markets as it matures as an asset, and the downward performance of the S&P - and the stock market in general - threatens to bring BTC and other cryptoassets down as investors de-risk and turn to their crypto holdings for liquidity.

In the weeks to come, investors should be cognizant of movements in the stock market as a supplement to on-chain fundamentals in determining the expected behavior of BTC and crypto markets in general.

Altcoin Digest

Performance against BTC

During Week 36, all of the major altcoins lost value against BTC as the crypto market saw a downward correction.

XRP held its ground most strongly, losing only 3% against BTC, while LINK lost 12.6% of its value next to bitcoin after gaining 11.1% the previous week.

Performance against USD

Week 36 saw significant losses for all major altcoins and bitcoin against USD. BTC fared the best, losing only 11.2% of its value, whereas LINK performed the worst, losing 22.2%.

As the market becomes more volatile, investors appear to be de-risking by moving from lower-cap alts back into more reliable assets such as BTC and ETH.

Which altcoins would you like to see us cover in future editions of The Week On-Chain? Let us know on Twitter, or enter our latest survey competition to have your say.

Drama in DeFi: SUSHI Founder Sells Devshare in What Some are Calling an "Exit Scam"

After repeatedly promising not to sell the 10% devshare portion of SUSHI tokens, SushiSwap founder Chef Nomi sold the majority of the tokens allocated towards the continued development of the project, in what some are alleging is an exit scam.

On Saturday, in a single transaction, Chef Nomi withdrew 2.5 million SUSHI and 20,000 WETH from Uniswap's SUSHI/WETH pool, then swapped the SUSHI for almost 18,000 WETH - ending up with over 38,000 ETH, currently valued at nearly $12.5 million.

Chef Nomi sold 2.5 million SUSHI on Saturday, paying a 1000 Gwei gas price

This action caused the SUSHI price to tumble from $4.12 to $2.05 the same day, losing over 50% of its value in less than 5 hours - after which it traded for as low as $1.19 on Sunday.

Despite disapproval from the community, Chef Nomi has not disappeared, and appears to be sticking around to continue working on SushiSwap. Comparing the situation to when Charlie Lee sold his LTC, Chef Nomi claimed that this is not an exit scam, but rather that they sold in order to stop caring about price and instead focus on development.

Whether or not this is indeed an exit scam, Chef Nomi has indelibly damaged their reputation - and SushiSwap's chances of success - with this risky move.

Stay tuned on Glassnode Insights for further updates - and for the whole story on SushiSwap's rise to notoriety, read our full analysis.

Sushi vs. Unicorn: The Rise (And Fall?) of Uniswap
Uniswap has long been one of Ethereum’s favorite projects. But the emergence of SushiSwap may be threatening its very existence.


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Metrics and Assets

  • Internal Contract Calls (ETH) - The total number of internal smart contract calls on the Ethereum network, i.e. contract calls initiated by other contracts (internal transactions).
  • External Contract Calls (ETH) - The total number of smart contract calls on the Ethereum network initiated by Externally Owned Addresses (EOAs), i.e. external transactions.

Disclaimer: This report does not provide any investment advice. All data is provided for information purposes only. No investment decision shall be based on the information provided here and you are solely responsible for your own investment decisions.