Bitcoin Market Health

Bitcoin experienced another week of price gains during Week 46, starting the week at $15,500 and ending it at $15,940. On Thursday, it rose above $16,000 for the first time since January 2018. Although it dipped below this point later in the week, as of today, BTC is back above $16k once again.

Bitcoin on-chain fundamentals saw a small drop over Week 46. GNI lost 1 point, dropping to a score of 61 points. This was caused by decreases in the Liquidity and Sentiment subindices, while Network Health increased.

Network Health gained 5 points, ending the week at a score of 67 points. Both the network growth and network activity subcategories saw decent gains as a result of an increase in on-chain transactions and new entities joining the network.

Liquidity lost 5 points throughout the week, giving it a score of 54. Transaction liquidity dropped slightly, but trading liquidity saw even larger losses. This decrease was caused by a decline in the number of BTC being deposited onto exchanges, as well as a drop in the supply of stablecoins relative to the supply of BTC.

Sentiment saw a 4 point decrease, ending Week 46 at a score of 62 points. The investor sentiment subcategory was responsible for this decrease, dropping mostly as a result of a decline in STH-SOPR. In other words, short-term traders are selling BTC at a lower profit margin on average.


Glassnode Compass

As BTC continues to show bullish signs, the compass remains in Regime 1 for yet another week, signalling continued positive sentiment.

While GNI dropped by one point over the past week, bitcoin's price trend increased to a value of 16% after it rose to exceed $16,000 for the first time since the last major crypto bull market.

BTC's continued price increases have pushed it further and further from trends in the stock market, lending even more credence to narratives that suggest a potential decoupling from traditional markets.

Some are also circulating a narrative that BTC could decouple from the rest of the cryptocurrency market. However, this seems less likely, and is not supported by historical trends. In the past, increases in BTC have been followed by increases in ETH and other major altcoins, followed by smaller altcoins and DeFi. As such, while crypto markets may be decoupling from the stock market, BTC likely won't decouple from the rest of crypto at this stage.


Altcoin Digest

Performance against BTC

The top altcoins mostly performed poorly in comparison with bitcoin throughout Week 46, with the exception of XRP, which gained 2.8% against BTC.

In the midst of announcements about a hard fork, BCH lost 12.9% of its value in BTC terms throughout the week.

Performance against USD

Not only did most of the top altcoins lose value against BTC over the week, but they also lost USD value (once again with the exception of XRP).

While ETH only dropped by 1.5%, BCH lost a massive 10.5% of its USD value following its fork into two chains (BCHA and BCHN).

Which altcoins would you like to see us cover in future editions of The Week On-Chain? Let us know on Twitter.


Ethereum is 18% of the Way To Launching ETH2.0 Phase 0

While BTC sees continued support at higher and higher prices, the rest of the crypto ecosystem is also continuing to develop. One of the major developments is with Ethereum, which will see ETH2.0 Phase 0 launching soon.

The first stage of ETH2.0 - the "Beacon Chain" - will launch on December 1st, provided that at least 524,288 ETH are staked in the deposit contract before this date.

Currently, almost 3000 validators have staked a total of 95,552 ETH in the ETH2.0 contract address. This means that the Ethereum network is over 18% of the way towards reaching the threshold required to launch Phase 0.

When Phase 0 initially launches, little will change for Ethereum. The Beacon Chain doesn't have accounts and can't handle smart contracts; rather, it is simply the first stage in moving Ethereum from a proof-of-work to a proof-of-stake consensus model. Once Phase 0 launches, the original PoW Ethereum chain will continue functioning as per normal.

This interim period will give the Beacon Chain the opportunity to undergo testing in a live environment. In the future, Ethereum shard chains (Phase 1) will be launched, and eventually the two blockchains will merge, at which point the Beacon Chain will enable PoS mining and be responsible for assigning stakers as validators for shard chains.

Even accounting for this gradual launch process, the prospect of faster processing times and cheaper transactions is promising for the price of ETH, as it gives the Ethereum network the opportunity to capture even more of the economic activity in the crypto sphere.

To stay updated on the progress toward Phase 0, check out our ETH2.0 metrics on Glassnode Studio.


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.