Tag: Market

NFT Market Facing Persistent Selling Pressure

by Blockchain News

According to the data provided by the analytics platform NFTGo during the month of April, the market for nonfungible tokens (NFTs) has been regularly seeing a greater amount of selling pressure than purchasing. There were only 7,907 purchasers on April 26, although there were 8,641 vendors trying to sell their NFTs. On April 19, there were just 5,893 purchasers, which led to the market reaching its second-lowest point in the preceding year.

There were 18,495 buyers in the market on April 5, but there were also 36,423 sellers, and there hasn’t been a single day in April in which the number of buyers has outweighed the number of sellers. Even with the rise on April 5 to 18,495 buyers, the market still had 36,423 sellers. Those who have their sights set on selling their NFTs in the near future could find this consistent selling pressure to be reason for alarm.

NFT trade volumes on March 10 were between $68 million and $74 million before the collapse of the bank; nevertheless, they dropped to $36 million on March 12. In addition, between March 9 and March 11, there was a reduction of 27.9% in the number of daily sales of non-fungible tokens (NFTs).

Twitter users have expressed their opinions on a wide variety of topics in response to the volatile circumstances in the NFT market. The co-founder of Canary Labs, Ovie Faruq, said in a tweet on April 26 that the NFT market is “not functioning” at the present time.

The amount of wash trading on the top six NFT markets increased to a total of $580 million in February, according to a research that was published by CoinGecko on March 20. This was the fourth consecutive month that wash trading increased. According to the findings of the research, the volume of the NFT marketplace increased by 126% from the previous month’s level of $250 million. The rise may be attributed to the general recovery of the market for non-traditional financial assets.

Despite the fact that the NFT market has been under pressure to sell during the month of April, it is important to keep in mind that the NFT market is still a relatively young and emerging business, and it is not unusual for the market to be volatile. Despite this, the consistent selling pressure may indicate to sellers that they need to change their pricing strategy or explore the possibility of hanging onto their NFTs for extended periods of time.

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Is Bitcoin Gearing Up to Exit the Current Bottom?

by Blockchain News

Since Bitcoin (BTC) has been trading above the psychological price of $20K, Glassnode has released its weekly on-chain report titled “Hammering Out The Bottom,” scrutinizing the stakes and the risks that may lay on the road ahead.

The market insight provider stated:

“Bitcoin has rallied back above the $20k level this week, pushing off a low of $19,215, and trading as high as $20,961. After consolidating in an increasingly tight range since early September, this is the first relief rally in many months.”

Source: Glassnode

Bitcoin was up by 6.6% in the last seven days to hit $20,626 during intraday trading, according to CoinMarketCap.

With the realized price being the average acquisition price per coin, Bitcoin is presently approaching the underside of the realized price set at $21,111. A break above it would signify notable strength. 

Source: Glassnode

Redistribution of wealth continues to happen

During the Bottom Discovery phase, diminishing investor profitability usually triggers the redistribution of coin wealth because weaker hands capitulate into severe financial pain. 

Using the UTXO Realized Price Distribution (URPD) indicator, Glassnode noted that more consolidation and duration may still be required in the current bear market because coins changing hands are lower than the 2018-2019 bottom discovery phase where 22.7% of total supply was redistributed.

The market insight provider pointed out:

“Performing the same analysis in 2022, we can see that around 14.0% of supply has been redistributed since the price fell below the Realized Price in July, with a total of 20.1% of supply now having been acquired in this price range.”

Even though Bitcoin is getting ready to exit the bottom, the bear-to-bull transition has not completely formed because of the lack of a convincing influx of new demand. 

Meanwhile, crypto trading firm Cumberland recently highlighted that Bitcoin volume remained absolutely massive given that BTC derivatives worth approximately $50 billion were being cleared on crypto exchanges daily, Blockchain.News reported. 

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Are Bitcoin Miners Earning Minimum Reward as Hash Price Plunged to Historic Lows?

by Blockchain News

The revenue of Bitcoin (BTC) miners continues to dwindle, given that hash price has nosedived to historic lows of $66,500 per Exahash, according to Glassnode.

The market insight provider explained:

“The Bitcoin Hash Price has reached an all-time-low of $66,500 per Exahash. This means that BTC miners are earning the smallest reward relative to hashpower applied in history, and likely puts the industry under extreme income stress.”

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Source: Glassnode

Therefore, this indicates that miners are earning the lowest revenue in Bitcoin’s 13-year journey.

Furthermore, this is happening as the mining difficulty in the Bitcoin network hits an all-time high (ATH). Glassnode added:

“BTC mining difficulty just reached an ATH of 158,208,051,864,292,013,637,632. Previous ATH of 152,947,196,320,564,012,646,400 was observed on 23 October 2022.”

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Source: Glassnode

Mining difficulty is a metric of how hard or easy it is to generate new Bitcoin and is often impacted by the number of machines plugged into the network.

High mining difficulty implicates enhanced network security because more computing power is required to mine a similar number of blocks as before. 

78% of BTC Supply has been immobile for More Than 6 Months

With the immobile Bitcoin supply reaching ATH, it seems some hodlers have remained steadfast in their objective.

Market analyst Will Clemente pointed out:

“A new all-time high 78% of Bitcoin supply has not moved in at least 6 months. Pretty remarkable in the face of the worst macroeconomic backdrop in recent history, geopolitical uncertainty, and WW3 fears. There is a group of seriously convicted hodlers out there.”

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Source: Glassnode

Hodling is one of the favoured strategies in the Bitcoin market because coins are stored for future purposes other than speculation.

For instance, hodled BTC recently hit a 5-year high, Blockchain.News reported. 

Meanwhile, Bitcoin price was hovering around $19,315 during intraday trading, according to CoinMarketCap. 

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Bitcoin, DeFi Space See Positive Momentums, NFT Market Declines in Q3

by Blockchain News

The latest data shows that although cryptocurrencies witnessed a massive market crash experienced in Q2 2022, the digital assets made some relative recovery in Q3 amid the ongoing bearing market conditions, according to the third-quarter report published by data platform CoinGecko.

Per CoinGecko, the report highlighted that such recovery is manifested based on the fact that the cryptocurrency market increased its market cap from a low of $903 billion in July to reach up to $1.2 trillion in August.

While Bitcoin struggled in Q3, it managed to outperform other commodities such as gold, oil and other traditional assets, except for the US Dollar Index (DXY), which tracks the greenback’s value against major currencies. However, from Year to date (YTD) perspective, Bitcoin still experienced the largest loss of -58% compared to all other asset classes. In other words, the cryptocurrency plunged more than 58% year-to-date and is now hovering around $19,113.66 per coin, according to data from CoinGecko. Bitcoin continues to trade mostly in lockstep with US equities but largely recovered compared to the equities market in Q3.

DeFi Rebounds

Data from CoinGecko has also disclosed that the Decentralized Finance (DeFi) market recovered by 31% in the third quarter, from $54.66 billion it was on July 1 to stand at $63.02 billion as of August 23 2022. It’s no news that the DeFi space has been facing it rough as data showed that the DeFi ecosystem lost 68.13% representing $155.79 billion in Total Value Locked (TVL) in the second quarter of 2022.

The rally can be traced to the crypto market’s slow but steady recovery, which is led by Ether, the native token of the Ethereum blockchain. Even though Ether (ETH) has plunged 33% to $1,330 from its quarterly high in mid-August, it is still up by 26% compared to Q2. The Ethereum blockchain accounts for $35.44 billion, or 56.24% of the TVL seen in the crypto space today.

Besides DEXs (decentralized exchanges) maintaining their status as the largest component of DeFi, they gained a significant rise in market share, increasing 36.8% to $10.9 billion, according to the data. This has been driven by the uptick in trading volume, majorly propelled by the Merge narrative, and with the continued popularity of the liquid staking sector. In 3Q, the liquid staking landscape almost tripled its market cap to $1.54 billion, and Lido, the market cap leader in that category, rose 264% to $1.60 within that period.

NFT Winter

Based on data from CoinGecko, sales of non-fungible tokens (NFTs) dropped significantly in the third quarter, as crypto investors struggle with the ongoing “crypto winter” and the demands for the highly speculative digital assets show little sign of returning. The NFT market witnessed a heavy hit in the past quarter, as it experienced a -77% plunge in total trading volume across the top 5 NFT marketplaces, OpenSea, Magic Eden, LooksRare, X2Y2, and CryptoPunks.

MagicEden was the only NFT marketplace that witnessed growth in September, doubling its MoM volume and dominance while the rest of its competitors continued to dip. With its recent expansion into the Ethereum blockchain and the launch of its headline-grabbing y00ts NFT collections, MagicEden gained significant dominance (from 9% → 22%) in 3Q. The Solana-based NFT marketplace appears to be eating OpenSea’s market share, which now stands at 60% from 90% in Q3. But it remains to be seen if MagicEden can sustain the momentum.

Stablecoin movements

Lastly, in the last Q3, the stablecoin economy’s market valuation dropped by 3% from $156.7 billion to $152 billion. The major 5 stablecoins are Tether (USDT), USD Coin (USDC), Binance USD (BUSD), Dai (DAI) and Frax (FRAX), as they have continued maintaining their positions, having no new entrants nor changes to their order.

However, data showed interesting movements in market cap within the top 5, with USDC dropping 16% or $9 billion after the US Office of Foreign Assets Control (OFAC) imposed sanctions on Tornado Cash. BUSD’s market cap grew the most, increasing by 18% or $3 billion because of inflows from USDC, triggered by Binance’s announcement on BUSD auto-conversion. USDT also witnessed a slight increase, possibly having absorbed some of the selloffs of USDC.

As of September, USDT crossed above $68 billion, USDC dropped to $49.39 billion, while Binance USD (BUSD) increased its market cap to $21.63 billion.

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Eastern Asia’s Crypto Market Growth Halts, China’s Crypto Transaction Volume Drops by 31% YoY

by Blockchain News

Chainalysis, a US blockchain analysis firm, released a new research study Thursday, showing that Eastern Asia is the fourth-largest cryptocurrency market, receiving $777.5 billion worth of crypto between July 2021 and June 2022.

This figure represents just under 13% of global transaction volume during that time period.

As a result, the study identified that Eastern Asia has lost ground to other regions this year. The region saw year-over-year transaction volume growth of just 4%, making it the region with the lowest crypto activity this year, according to the research. Last year, the region was ranked as the third biggest region by crypto transaction volume at this time. 

Source: Chainalysis

The biggest reason for this loss is likely due to the decline in cryptocurrency activity in China, the largest market in the region. While the study identified that China saw its crypto transaction volume drop by 31% compared to the previous year-long period, neighbors like Japan more than doubled transaction volume. This is likely due to Chinese government crackdowns on crypto activity over the last year, the study revealed.

Besides the low cryptocurrency trading activities in the region, the data indicates that Eastern Asia has surprisingly low DeFi adoption. Over the year-long time period Chainalysis conducted this study, DeFi made up just 28% of transaction volume in Eastern Asia, less than all but one other region – Eastern Europe – as shown in the figure below.

The data shows that Japan’s crypto market has grown significantly over the year-long period studied, with on-chain transaction volume increasing 113.2% over the previous 12 months, compared to 72% for the next-closest country, South Korea, and 31.1% for China.

To explain Japan’s resilient crypto activities, one of the reasons is due to the relatively high embrace of DeFi. Despite having a smaller overall crypto market, Japan’s DeFi transaction volume is almost double the size of South Korea’s at $56.7 billion and close to China’s total of $67.6 billion, as indicated in the figure below. The research shows that decentralized exchange (DEX) trading may be eating into trading on centralized services, which have not witnessed similar growth.

As the data highlighted above, China has witnessed a huge decline in cryptocurrency activity, likely due to government crackdowns imposed last year. However, despite a 31.1% drop-off in transaction volume, China remains the biggest crypto market in the region, the fourth overall in the world, and ranked tenth for grassroots adoption on Chainalysis’ global crypto adoption index.

While government crackdowns have had a clear impact, China’s cryptocurrency market remains strong, with healthy transaction volumes across both centralized and DeFi services. The figure below shows that China’s trading activity has started to pick back up in recent months, and even mining, which saw a massive fall in activity following the ban, has made a comeback in the country.

Early this month, Chainalysis released a similar study showing that emerging markets, such as the region of the Middle East and North Africa (MENA), dominated this year’s global crypto adoption index. Latin America became the second in transaction volume growth, North America was third, and Central and Southern Asia close behind.

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DeFi TVL Rebounds to the $54 Billion Mark, Eth-based MakerDAO Remains Dominant Lender

by Blockchain News

Fresh data from tracking service DeFi Llama shows that the total value locked (TVL) in decentralized finance (DeFi) protocols has rebounded to the $54 billion mark.

According to the data, the total TVL was down — between $53.7 and $53.29 billion — since October 12. In September, the TVL was down to $52.22 billion, the lowest since March 2022. 

Source: DefiLlama

As per the data, the largest DeFi lending platform across all chains remains the Ethereum-based MakerDAO, with a market dominance of 14.48% and $7.83 billion TVL. Lido is the second most dominant DeFi lender with a market cap of $6.11 billion, while the third is Curve Finance with $5.92 billion, Aave comes fourth with $5.19 billion, and Uniswap is fifth with $4.97 billion.

As it can be seen in the data, the value locked in Ethereum remains the largest, with around $31.2 billion, or just over 57% of the aggregate value locked today. Ethereum is followed by Tron’s $5.54 billion, Binance Smart Chain (BSC)’s $5.33 billion, and Avalanche’s $1.41 billion, among other DeFi protocols.

In simple terms, TVL measures the total value of all assets locked into DeFi protocols. TVL includes all the tokens deposited in all the functions that DeFi protocols offer, including staking, lending, and liquidity pools. In other words, the TVL is a measure of the funds deposited in smart contracts, and this figure is closely monitored by analysts as an indicator of investor confidence in the market.

Over the last two years, the cryptocurrency sector recorded a dramatic increase in the total value locked (TVL) across all DeFi platforms because of the boom associated with the bull market that attracted massive capital during that time. But all that changed in 2022.

As of March this year, the value locked in DeFi traded above the $200 billion mark. But things started turning worse in May amid a wider sell-off in global markets and waning interest in risky assets, such as cryptocurrencies. The total value locked in the crypto market declined from $160 billion in mid-April 2022 to $52.2 billion in September 2022, the lowest level since March 2022.

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Solana NFT Platform Magic Eden Moves To An Optional Royalties Method

by Blockchain News

Solana-based NFT platform Magic Eden announced on Saturday it’s opting for an optional royalties method for its users. 

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Users will now have the option to pick between giving the creator royalties or not and how much they wish to pay as royalties to creators when purchasing an NFT from the platform.

“After some difficult reflection and discussions with many creators, we’ve decided to move to optional royalties on @MagicEden,” Magic Eden said in the Twitter announcement. The platform added, “The decision on how much royalties to pay will be passed to the buyer.”

By default, the platform stated ALL collections/listings would honor full royalties. However, at the same time, buyers would also have three options to choose from to set their preferred royalty percentages.

Buyers would be able to set up their user profile to input a specific royalty percentage payment that will apply to all NFTs they purchase on Magic Eden. Alternatively, they would also be able to select a royalty percentage for a particular collection or a single NFT.

Magic Eden further said this new option is not a decision the platform “takes lightly,” and the team understands this move has severe implications for the ecosystem, so they hope it would not be a permanent decision as royalties today are not enforceable on the chain.

One other thing the NFT platform mentioned is that it will also waive transaction fees on NFT purchases. The platform charged 2% on every sale.

Notably, this new move from Magic Eden comes during the ongoing argument about NFT royalties in the industry. Some individuals believe royalties shouldn’t be enforced on users, while creators say royalties payments are a reward for their efforts on projects.

In addition, looking at users’ reactions to the company’s update, some seem rather unimpressed, while others appear to buy the idea of not enforcing royalties.

A tweep commented, saying, “This is by far the worst decision you guys could have made. Creators/founders stuck by you through thick and thin. This will send projects to zero and disincentivize new project growth. Consider building a method to enforce royalties rather than giving in.”

Another tweep said, “Royalties are stupid and shouldn’t exist. Glad to see platforms taking this approach. Any project that depends on royalties from secondary sales is unsustainable and defined to fail.”

Speaking of Magic Eden, in July, the platform announced the establishment of its venture outfit called Magic Ventures, focusing on bootstrapping Web3.0 gaming protocols.

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Bitcoin Crosses $20K Mark, as Whales Continue to Accumulate Tokens

by Blockchain News

After slipping to lows of $18,000, Bitcoin (BTC) has gained some momentum and crossed the psychological price of $20,000.

The leading cryptocurrency was up by 7.77% in the last seven days to hit $20,154 during intraday trading, according to CoinMarketCap.

The upward momentum is experienced amid Bitcoin whales on a spending spree based on heightened accumulation. Market insight provider Santiment explained:

“Bitcoin whales are showing signs of sustained accumulation, which has been a rarity in 2022. Since September 27th, addresses holding 100 to 10k BTC have collectively added back 46,173 BTC back to their wallets as large USDT holdings have dropped.”

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Source: Santiment

Therefore, whales on the Bitcoin network are showing a sustained hodling trend, which can also be depicted by the fact that more coins have been leaving crypto exchanges.

Santiment added:

“Bitcoin continues to see its supply moving away from exchanges as traders show further signs of being content with their current holdings. With less than 9% of BTC on exchanges for the first time since 2018, it is a good bode of confidence for bulls.”

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Source: Santiment

Bitcoin exiting exchanges usually reflect a hodling culture because coins are transferred to digital wallets or cold storage for the future other than speculation. Therefore, it’s a bullish signal because it slashes selling pressure.

Bitcoin hodlers have not shown signs of relenting in their quest to have more coins because more than 42 million addresses hold BTC despite the bear market. This is 4.5 million more than 2021; data analytic firm IntoTheBlock pointed out. 

The bullish momentum being experienced in the BTC market is coming at a time when the UNCTAD has cautioned the federal reserve not to throw caution to the wind when tightening fiscal and monetary policies because this could prompt a global recession. 

The Fed has been at the forefront of increasing interest rates, which have been detrimental to the crypto market as bears continue to bite. 

Therefore, if the Fed heeds to this call, a bullish trend might be triggered in the crypto market because interest rate hikes have been the primary stumbling blocks. 

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Crypto Gets Resilience in the Past Month as Forced Selling Exit

by Blockchain News

The exodus of forced selling made cryptocurrencies partly resilient in the last month, according to Galaxy Digital Holdings founder Mike Novogratz.

Speaking at a conference in Singapore, Novogratz pointed out:

“We’re in this weird equilibrium where there are a few buyers, there are a few sellers, and there’s not that energy in the market like you’re seeing in the equity market or the bond market where you have to sell, right?”

Significant leverage has engulfed the crypto market, triggering a bearish run.

Nevertheless, Novogratz acknowledged that cryptocurrencies would take off again once the Federal Reserve (Fed) eased the aggressive monetary tightening, but this would not happen in a sustainable way until Web3 projects experienced mass adoption.

He added:

“Many crypto hedge funds won’t survive 2022’s rout in virtual coins. The implosion of Do Kwon’s Terraform Labs project was ‘heartbreaking’ and a lesson for the crypto industry.”

South Korean authorities have asked Interpol to issue a red notice for his arrest after Kwon denied being in hiding from law enforcement.

The crash of TerraUSD (UST) and Luna, which triggered the loss of $60 million of investor funds following the bearish outlook in the market, has made cryptocurrency platforms witness the least amount of engagement in two years based on the departure of weak hands. Market insight provider Santiment explained:

“If it feels like there are less people commenting and showing interest in crypto these days, your intuition is correct. Commentary hasn’t been this scarce since the end of 2020. Twitter has especially taken a hard fall in the past month.”

Meanwhile, Santiment acknowledged that profit-taking tendencies surfaced after Bitcoin closed the $20,000 mark and said:

“Many traders were apparently awaiting the $20k threshold to begin selling their bags. As Bitcoin crossed back above this psychological level, mass profit taking ensued.”

Therefore, time will tell how cryptocurrencies continue shaping up amid a tightened macroeconomic environment. 

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Bitcoin (BTC) $ 27,169.28 2.08%
Ethereum (ETH) $ 1,869.45 1.88%
Litecoin (LTC) $ 89.83 2.54%
Bitcoin Cash (BCH) $ 112.88 1.43%