TI Weekly Market Review: Temporary Silence?

TI Research

After the troop of WallStreetBet mopped up, the cryptocurrency market gradually steps into a relatively stable period. the volatility caused by miners’ selling has been completely absorbed by the market. The price of bitcoin climbed back above $36,000, The price shows a gradually climbing back to a high-level trend with a typical characteristic - The price increases with a lower trading volume.

High Price with Low Volume

This week, the trading volume of Bitcoin has rebounded compared to last week, but the biggest influence factor comes from the actions of Wall Street Bet retail investors during the weekend. After Elon Musk tweeted "Bitcoin" on Jan 29, Bitcoin spot trading volume reached a daily high of $20.63 billion on Jan 30, and then fell back to normal levels the next day.

From the monthly chart, the impact of retail investors is limited indeed, for the impact from miners’ sell-off in mid-January was much greater than that from retail investors. The miners’ sell-off caused a price shock period of nearly a month, while a large number of retail investors only caused a jump in price and trading volume on the same day.

BTC trading volume in the last 30 days, chart from 11:00 pm EST, Feb. 4 Source: tokeninsight.com

Although the trading volume is flat, the Bitcoin price has changed significantly. The upward trend of volatility starting from last week has continued, but the increase is faster. As of 11:00 pm on February 4th, the price of Bitcoin has risen to higher than $37,000. The shock caused by the miner sell-off in January seems to have been basically absorbed by the market, and the lower trading volume indicates that the market's expectations for Bitcoin are generally more positive, and there are many people who hold the cryptos on the sidelines. This shows that the price of Bitcoin will rise further in the near future.

The continued increase in the prices of major exchange platform tokens and decentralized lending platform tokens also provides evidence for possible future price increases. From last year's data, Bitcoin is closely related to large-scale exchanges’ platform tokens and decentralized lending platform tokens. The rise of the latter two often indicates the recent rise in the prices of mainstream cryptos.

BTC price in the last 30 days, chart from 8:00pm EST, Feb 4. Source: tokeninsight.com
BNB, HT and COMP price in the last 30 days, chart from 11:00pm EST, Feb 4. Source: tokeninsight.com

Gas Fee Surges ATH with ETH Prices, DeFi Seems Soaring Back

After becoming the best performing crypto in 2020, Ethereum does not seem to stop moving forward. The recent volatility of Ethereum also showed similar characteristics of "high price and low volume" in the last week. Ethereum's weekly spot trading volume is $41.51B, a slight decrease of 0.62% from last week, basically the same, while the volume of perpetual contracts is only $151B, a slight increase compared to last week, but the spot price rises all the way and breaks through $ 1,600 per ETH, which is a new all-time-high.

The booming price has pushed gas fees to a new high, and the average cost reached more than $20 this Thursday. The flourishing DeFi market is the root cause of the increase in Gas Fee and Ethereum prices. Under the leadership of mainstream DeFi projects such as Uniswap and Aave, the total DeFi value locked has increased by 16.37% in 24 hours. Moreover, starting from 2021, the pressure of transaction settlement on the Ethernet network has reached a new high, pushing the gas fee to an average historical peak of $23.27 per transaction, but user demand has not declined. It can be seen that DeFi in 2021 is soaring.

ETH price and Gas Fee changes in the last 30 days, chart from 1:00am EST, Feb 5. Source: ycharts.com, tokeninsight.com
The DeFi’s TVL changes in the last 30 days, chart from 11:00pm EST, Feb 4. Source: tokeninsight.com
Trading volume summary info in the last 7 days, chart from 8pm EST, Feb 4. Source: tokeninsight.com

In response to rising gas fees, many investors have chosen to buy delivery futures for hedging. On the other hand, despite the recent relatively sluggish options market, the number of contracts traded on Ethereum options has always been much higher than the number of Bitcoin contracts in Deribit, and most of contracts are short-term option contracts mainly, which indicates that a large number of traders are using option tools to hedge possible trading risks.

ETH option contracts trading volume in last 30 days, chart from 2:00am EST, Feb 5. Source: tokeninsight.com

Highlights Picked by TokenInsight

Grayscale Reopens Its Ethereum Trust to Investors

On Feb 1, digital asset manager Grayscale Investments said Monday its Ethereum Trust (OTCQX: ETHE) is again open to accredited investors.

OKEx Collaborates with Mask Network and Mirror Protocol Launches Second ITO - $mTSLA

On Feb 3, in light of recent events involving WallStreetBets, Robinhood and Elon Musk, which grabbed everyone’s attention throughout the world, Mask Network, together with Mirror Protocol, OKEx, Transak offered the mirrored asset $mTSLA on Twitter.

CrossTower Launches Bitcoin Fund to Compete With Grayscale’s GBTC

On Feb 4, crypto capital markets firm CrossTower, based in Bermuda, is launching a hedge fund at the end of the month in a bid to compete with Grayscale’s Bitcoin Trust (GBTC) and other bitcoin funds for accredited investors.

Bitcoin

Ethereum

Options

TI Research

TokenInsight is a data and research organization for the digital asset market. TI provides comprehensive asset-related data and comprehensive and timely information and research services for digital assets.