TronWeekly

Crypto World News

You are here: Home / Archives for glassnode

glassnode

Bitcoin Funding Rates Surge As Liquidity & Market Makers Take A Hit

by

Recently, Glassnode’s Lead On-chain Analyst took to Twitter to unveil a fascinating development in the world of Bitcoin. The analyst’s tweet revealed that the funding rates in Bitcoin perpetual swap markets were now generating a staggering 6% annualized yield. 

This revelation has sparked considerable excitement among traders, as it has been quite some time since futures traders have been able to generate higher yields compared to short-dated treasury bills.

The analyst speculated that this phenomenon could be attributed to the recent macro pullback in liquidity and market makers. These conditions have seemingly created an environment conducive to a return to a more natural state of play in the market. 

It is important to note that BTC perpetual swaps, being a riskier and more complex position, should logically yield more than T-bills. This suggests that the increased yield is not merely a speculative premium but rather a reflection of the asset’s inherent risk.

The analyst further highlighted that despite the increase in yield, open interest remains relatively low, and volumes are experiencing cyclically low levels. These factors provide additional evidence that the current situation is not driven by speculative fervor. 

Bitcoin Dominance Rising

Moreover, it is worth noting that Bitcoin is making a comeback in terms of dominance when comparing open interest and volume with Ethereum. Bitcoin’s dominance in the futures market now stands at an impressive 65% and is steadily rising. 

image 101 1

This indicates that money and liquidity are gravitating back towards the stability and liquidity that Bitcoin offers, causing a concentration of market activity around the renowned orange coin.

These revelations have piqued the curiosity of investors and market enthusiasts as the cryptocurrency landscape continues to evolve. With Bitcoin’s funding rates yielding such attractive returns, traders are closely monitoring the situation to gauge the potential long-term implications. 

However, with shifting liquidity dynamics, the cryptocurrency market is striving to find a balance, and the spotlight is firmly on Bitcoin and its pivotal role in shaping the landscape of digital finance.

Related Reading | Shiba Inu Investor’s Windfall: $30k Blossoms into a Whopping $450K with Early Bets

Ethereum Whales Soars With 30.07M ETH Holdings While Exchanges Hit Lowest Levels 

by

In a recent tweet by analytics platform IntoTheBlock, it was revealed that Ethereum whales are making quite a splash in the crypto waters! These giant holders of Ethereum have witnessed a significant surge in their holdings, causing quite a stir among the crypto community. 

The report indicates that these whales now boast a whopping 30.07 million ETH, which marks a considerable leap from their previous holdings of 26.56 million ETH recorded earlier in 2023.

The surge in Ethereum holdings by these prominent addresses, which command over 0.1% of the total supply, strongly suggests an ongoing accumulation trend. This news has intrigued many analysts and investors, pondering the possible implications for the future of Ethereum and its market dynamics.

However, it remains to be seen how these accumulating Ethereum whales will impact the overall market sentiment and price movements. 

Ethereum On Exchanges Reaches Lowest Level 

In another related update, Ethereum reserves on exchanges have dropped to its lowest levels since 2016, as more users stake their ETH, according to data from Glassnode. 

Currently, only 14.85% of all ETH is held in centralized exchange wallets, a level unseen since the early days of Ethereum. In contrast, during the 2021 bull market, exchange balances were around 25-26%. 

Low exchange balances are generally considered bullish as they indicate limited ETH supply available for purchase, thereby driving up prices. The recent surge in the popularity of staking has contributed to the decline in available supply. 

The report said that since the Shapella upgrade’s introduction, over 4.4 million additional ETH coins have been staked, with large holders opting for passive income generation rather than selling their assets. 

Analysts at Binfinex predict this trend will continue, driven by expected deflationary forces pushing up ETH’s price. Meanwhile, cryptocurrency trading volumes have experienced a significant decline. 

Binance, the world’s largest crypto exchange, saw a 48% decrease in spot trading volume for the second consecutive month in April, reflecting an industry-wide decline of 40% due to macroeconomic uncertainties and U.S. bank collapses.

Nevertheless, with notable changes unfolding in the crypto market, including a dwindling supply of ETH for sale and declining trade volumes, industry observers are closely monitoring the potential effects on the overall market and the future price of Ether in the months ahead.

According to the current price analysis of Ethereum, it is trading at $1,833.33, up by about 2.10% in the last 24 hours. However, the weekly chart recorded a slight increase of about 0.48%. 

ETH 1D graph coinmarketcap 1 1
Source: Coinmarketcap

In addition, its trading volume has witnessed a decrease of 10.22%, reaching $5,842,947,055, whereas the market capitalization has increased by 2.16% in the last 24 hours.

Related Reading | 5 Best Free Cryptocurrency Cloud Mining Sites in 2023 – Side Hustle to Earn Passive Income

Bitcoin Market Insights: Negative Bias & Miner’s Accumulation Of 8.2K BTC

by

Glassnode, the renowned crypto analytics firm, in a recent tweet, shared some intriguing insights into the current state of Bitcoin. Their analysis focused on the profit/loss ratio and the volume of Bitcoin deposits to exchanges, shedding light on the prevailing trends in the market.

According to Glassnode’s findings, Bitcoin deposit volume’s profit/loss ratio, or bias, currently stands at a negative 0.7. It suggests that an influx of coins flows into exchanges at a loss, raising eyebrows among crypto investors.

However, Glassnode’s findings offer valuable insights into the dynamics of the Bitcoin market. The negative bias of the overall deposit volume highlights the potential bearish sentiment as coins are being moved to exchanges at a loss. 

Delving deeper into the data, Glassnode dissected the exchange inflow bias based on the distinction between Short and Long-term Holders (STHs and LTHs). 

Remarkably, Long-term Holders emerged as the winners in this analysis, with a positive bias of 1.73, indicating profitable inflows.

image 87 2

On the other side, STHs faced a negative bias of 0.69, which closely mirrored the overall market bias of 0.7. This data suggests that, at present, Short-term Holders dominate the exchange inflows.

image 87 1

Nevertheless, the disparity between Short and Long-term Holders reveals an interesting contrast, with Long-term Holders reaping profits while Short-term Holders face challenges.

Miners Expand Bitcoin Holdings By 8.2K BTC

In another significant analysis, Glassnode unveiled a noteworthy finding related to Bitcoin. Their analysis centered around the aftermath of the FTX implosion, which had witnessed a substantial outflow of Bitcoin. However, what followed this tumultuous event was a rather intriguing development.

Glassnode’s data revealed that miners, with the exception of Patoshi and early unlabelled miners, have been actively bolstering their balance sheets. In fact, they managed to expand their holdings by an impressive 8.2K BTC, catapulting their total Bitcoin stash to a substantial 78.5K BTC.

image 87

This revelation sheds light on an interesting trend within the mining community. Despite the FTX implosion and the resultant outflow of Bitcoin, miners have displayed resilience and a proactive approach to enhancing their holdings. 

Well, such an accumulation of BTC by miners can be viewed as a testament to their confidence in the long-term value of the world’s leading cryptocurrency.

Related Reading | Litecoin Soars: 160M Transactions Milestone & Anticipation Builds For Halving Event

Bitcoin’s Quiet Consolidation: Low Volumes & Dormant Wallets Signal Market Restraint

by

According to a recent report by Glassnode, the Bitcoin market has experienced a period of consolidation, trading within a tight price range and recording extremely light on-chain volumes.

The report also highlights that a significant portion of the coin supply remains dormant in investor wallets, with several key age bands reaching all-time highs.

This week’s trading range for Bitcoin has been exceptionally narrow, fluctuating only 3.4% between a low of $26.6k and a high of $27.5k.

image 73
Bitcoin's Quiet Consolidation: Low Volumes & Dormant Wallets Signal Market Restraint 11

This level of consolidation has not been seen for quite some time, with similar instances observed in the 2023 yearly open and the recovery period after the COVID-induced market sell-off in July 2020.

On-chain volume has been notably low, with both aggregate and exchange-related flows at cyclical lows. Moreover, substantial Bitcoin remains inactive in investor wallets, indicating a lack of market activity.

image 75

This trend is further supported by the decline in exchange deposit volume, which has plummeted from a peak of $4.2 billion in May 2021 to a mere $343.4 million currently, representing a significant drop of 91.8%.

Bitcoin: Realized Profit & Loss At Three-Year Low

The report also delves into the concept of realized profit and loss events, offering insights into the market’s capital flows. The combined realized profit and loss levels are currently trading at their lowest point in the last three years, suggesting that holders with substantial profits or losses are reluctant to spend their Bitcoin.

image 75 1

Another noteworthy observation is the prevailing sentiment among market participants, as indicated by the Adjusted MVRV Ratio.

The recent rally above $30k resulted in a modest 21% level of unrealized profit, which has now dropped to just 9% within the market. This indicates that there is limited profit potential available to active participants.

image 75

The report further highlights the significant amount of Bitcoin held in investor wallets for extended periods. The supply held for over one year continues to reach new highs, with most of the supply remaining inactive. Long-Term Holder Supply, representing coins held for more than 155 days, has also reached an all-time high.

image 76

Nevertheless, the data presented in the report paints a picture of strong holder conviction and a lack of willingness to spend Bitcoin.

Despite the low volume throughput and lackluster inflow of new demand, existing holders remain resilient and seemingly unaffected by the extreme volatility witnessed in the past two years. However, it is suggested that these holders may require higher prices before considering selling their holdings.

Related Reading | Crypto Tax Myth Busted: No, MetaMask Won’t Hold Your Funds for Taxes

Ethereum (ETH) Exchange Balances Hit 5-Year Low, Wallets With 100+ ETH Drop To 6-Month Low, Data Shows

by

The Ethereum (ETH) held by exchanges has dropped to its lowest level in five years, reaching 17,945,575.311 ETH. Additionally, the number of Ethereum wallet addresses containing 100 or more coins has hit a six-month low of 46,858, according to the data.

According to researchers, the Ethereum (ETH) balance held on cryptocurrency exchanges has reached a new low point not seen in the past five years, with the total currently standing at 17,945,575.311 ETH. While the exact cause for this decrease remains uncertain, several potential factors could contribute to this trend.

In April, the primary blockchain network for smart contracts successfully transitioned to the proof-of-stake (PoS) consensus algorithm. This transformation, known as the Shanghai upgrade, facilitated the withdrawal of staked ETH from the beacon chain.

Regarding Ethereum, recent updates reveal that the count of Ethereum wallet addresses with a balance exceeding 100 ETH has reached its lowest point in six months, standing at 46,858, as reported by Glassnode.

The observed metric may be influenced by heightened staking engagement among large-scale investors, known as whales, and their involvement in decentralized finance (DeFi) ventures like liquidity provision. Another potential factor impacting this metric is the rising popularity of meme coins, including PEPE and similar tokens, attracting substantial capital and posing a significant challenge to Ethereum.

Ethereum Balances Decrease On Centralized Exchanges

As most exchanges, including Binance led by Changpeng Zhao, took part in the staking activity, it is normal for their ETH balances to decrease once network withdrawals are enabled.

A potential reason for the declining ETH balances on exchanges might be the increasing trend among investors to opt for self-custody as a precautionary measure against potential risks associated with crypto exchange incidents, such as the sudden collapse of FTX, led by the disgraced Sam Bankman-Fried, that occurred last year.

ETH Price

At the time of writing, the price of ETH stands at $1,826.11, with a 24-hour trading volume of $5,924,682,383. Over the last 24 hours, Ethereum has experienced a 1.34% increase in value. According to Coin Market Cap, the market capitalization of Ethereum is $219,643,413,660, solidifying its position as the world’s second-largest cryptocurrency.

ETHUSDT 2023 05 18 16 49 50
Source: Tradingview.com

Related Reading: | Coinbase Expands Service Offerings In Singapore To Boost Local Adoption |

Bitcoin’s On-Chain Metrics Flash Signs Of A New Bull Market- Report

by

With the market exhibiting “extreme fear,” Bitcoin’s price has been unable to move beyond the $26,500 to $27,100 range.

Despite its recent consolidation, BTC’s on-chain metrics are flashing signs of a major price movement, Glassnode co-founder Negentropic stated.

In an insight published on May 17, the analyst highlighted that the asset’s short positions are getting exhausted as the price holds longer which is a sign of upward price momentum.

Another crucial indicator is the failure of the price to break below the 50 and 200 Simple Moving Averages [SMAs], which are now acting as solid support levels that have withstood five tests.

He also pointed out the breach of the 50 SMA over the 200 SMA marking a golden crossover, a bullish signal that typically foreshadows short-term gains.

image 58
Bitcoin's On-Chain Metrics Flash Signs Of A New Bull Market- Report 14

A golden cross is when a short-term moving average of prices rises above a longer-term moving average. Negentropic then discussed the tightening Bollinger bands, another sign of powerful price swings.

However, the Relative Strength Index, or the RSI is yet to show any signs of momentum to get the ball rolling as is currently in no man’s land.

The analyst also took note of the dollar market whose liquidity is slowly rising, holding the potential to ignite a significant movement in BTC.

Could this be the anticipated trigger for the $35k run?

Experts’ Big Bet On Bitcoin

Not long ago, leading analyst Ali Martinez observed that more than 20,000 BTC have left crypto exchanges in the previous 24 hours, suggesting that market participants are expecting the price to rise.

Vetle Lunde, a senior analyst at K33, had predicted that BTC might peak at around $45,000 in May due to the currency’s price trend resembling that of its early 2019 ascent.

Although the $45,000 forecast may not come true this month because Bitcoin’s short-term prospects look grim, long-term on-chain indicators have highlighted bullish trends and reflect the early phases of prior bull markets, as mentioned in Bitfinex’s latest analysis.

At the time of writing this article, Bitcoin is currently trading at $27,323, with a 24-hour trading range sitting between $26,590.05 and $27,416.89, according to Coinmarketcap.

The flagship cryptocurrency is up roughly 0.89%. The market cap stands at roughly $530.55 billion.

Bitcoin’s Stellar Journey: $8.2T Settled, $13.1B Daily Peak, & Unstoppable Growth

by

Glassnode, a prominent crypto analytics firm, took to Twitter to unveil an astonishing achievement of the Bitcoin network. Bitcoin has resolved an astounding $8.2 billion in transfer volume since its launch, entirely without any requirement for any outside authority. These uncensorable transactions have solidified Bitcoin’s decentralized and robust financial system position.

To grasp the magnitude of this feat, Glassnode provided further details, shedding light on the progression of Bitcoin’s transfer volume over various epochs. During Epoch 1, the network witnessed a daily peak of $10.2 million in transfers. 

This figure underwent a remarkable surge in Epoch 2, skyrocketing to an astounding $476.1 million per day. Epoch 3 witnessed an even more substantial surge, reaching a staggering peak of $747.9 million in daily transfers. Finally, the network experienced an astronomical leap in Epoch 4, with a mind-boggling daily peak of $13.1 billion.

Moreover, an intriguing pattern emerges when examining the transfer volume settled per halving, showcasing exponential growth in USD terms. During Epoch 1, the transfer volume amounted to a significant $1.57 billion. 

This figure experienced a colossal surge in Epoch 2, surmounting an impressive $139.2 billion. Epoch 3 witnessed an exponential rise, with a jaw-dropping transfer volume of $2.38 trillion. Finally, in the most recent epoch, Epoch 4, the network settled an extraordinary $5.7 trillion in transfer volume.

image 52

The surge in Bitcoin’s transfer volume across epochs underscores the network’s exceptional throughput growth and underscores its prominence as a dominant force in the world of digital finance. 

With each halving, Bitcoin’s transfer volume has expanded exponentially, solidifying its status as a formidable player in the global financial landscape.

Impressive Bitcoin Transfer Volume Leaves Some In Awe

The tweet by Glassnode has sparked a range of responses from the community. One curious individual expressed interest in comparing these numbers to the global transfers made by banks, questioning if such figures were ever achieved in the traditional financial system.

Meanwhile, others couldn’t help but marvel at the sheer magnitude of the numbers presented. They were left shocked by the exponential growth of Bitcoin’s transfer volume across different epochs.

Amidst the mixed reactions, some commended BTC for its superior money management skills, jokingly admitting that the cryptocurrency outperformed their own financial prowess.

Of course, not all voices sang praises for BTC. A dissenting opinion claimed that Bitcoin had indeed censored numerous transactions, particularly due to exorbitant fees that hindered users from making desired transactions. Labeling BTC as a “shitcoin,” this individual expressed skepticism towards its legitimacy.

Related Reading | XRP Price Hits 1-Week High After Ripple’s Court Win Over Hinman Docs

Bitcoin Blockspace Boom: BRC-20 Tokens Drive Fees To All-Time Highs

by

Glassnode, a leading on-chain analytics firm, has released a report highlighting a significant surge in demand for Bitcoin block space. The spike in demand was primarily driven by speculators looking to mint BRC-20 tokens using text inscriptions, resulting in a surge in miner fee revenue and surpassing the 6.25 BTC block subsidy.

The surge in demand for Bitcoin blockspace has led to a record number of transactions on the Bitcoin network. Transaction counts reached all-time highs, with an average fee per block surpassing the block subsidy. This increase in mining revenue is a welcome relief for miners who had suffered from the bear market in 2022.

The report delves into the impact of BRC-20 tokens on Bitcoin’s on-chain activity, inscription types, and miner revenues. BRC-20 tokens are a proposed mechanism for issuing tokens on the Bitcoin ledger using JSON text files inscribed into the blockchain.

The demand for BRC-20 tokens resulted in an influx of transactions, with a new daily transaction count of 682k, surpassing the previous peak in 2017. The average number of transactions per block more than doubled, reaching over 4.3k per block. 

image 38

This increase in transaction counts can be attributed to the 75% discount applied to witness data, allowing for a denser consumption of available block capacity. 

Interestingly, the number of active addresses fell to cycle lows, suggesting that many BRC-20 users may have reused their Bitcoin addresses, possibly due to their familiarity with account-based chains like Ethereum or Solana.

image 39

The rise of BRC-20 tokens has seen a shift from primarily image-based inscriptions to text-based inscriptions. The small data footprint of text inscriptions, coupled with the high fees users were willing to pay, led to an average transaction size of 405 bytes, an all-time low. 

image 40

Text-based inscriptions accounted for over 50% of total confirmed transactions, surpassing image inscriptions by a significant margin.

image 41

Bitcoin Miners Are Paid A Brief Bonus: Fee Pressure & Revenue Uptick

Miners experienced a brief bonus as the urgency of BRC-20 transactors drove fee pressure to extraordinary levels. For the fifth time in history, the average fee paid per block surpassed the block subsidy, reaching 6.66 BTC in fees per block. 

image 42

During this surge, text files accounted for a substantial portion of total fees paid, demonstrating the scale of demand. Miners earned a cumulative sum of 1,262 BTC in fees, with 1,090 BTC generated during the past week alone.

image 43

The increase in fee pressure resulted in elevated miner revenue, with the proportion of revenue associated with fees reaching 11.5%, similar to the levels observed during the 2017 and 2021 bull markets. However, the surge in fee pressure was short-lived, subsiding after a few days.

Despite the revenue uptick, the overall impact on miner revenues remains limited, as hash-price, a metric accounting for BTC spot price, fee pressure, and estimated hashrate, continues to experience a downtrend.

Miners spent a significant portion of the fees earned, and the majority of the revenue boost provided relief after the challenging 2022 bear market.

image 44

While the long-term potential of BRC-20 tokens and inscriptions remains uncertain, they have introduced a new buyer for Bitcoin blockspace and shed light on the demand for Bitcoin’s settlement assurances. 

Nevertheless, the surge in demand for blockspace underscores the importance of understanding these emerging technologies’ technical, practical, and philosophical implications.

Related Reading | The Shiba Inu Investment Dream: A $900 Bet Could Net You $1 Million if it Hits $0.01

Double Trouble For Ethereum: Loss Of Finality As 60% Of Validators Drop The Ball

by

On May 11th and 12th, the Ethereum network was hit by two separate incidents that caused a significant loss in Finality. According to a recent tweet by Glassnode, over 60% of validators on the network stopped performing their duties during these incidents.

Finality is a crucial state where a supermajority of validators (2/3 of the total stake) have attested to the final state of the blockchain, ensuring that a block and its processed transactions cannot be altered or removed from the blockchain.

Due to the absence of up to 60% of validators, the Ethereum chain’s performance was impacted, leading to a degradation in performance. 

Daily slots of about 3.68% were missed, and 253 blocks were not proposed on time. However, this was still lower than the 658 blocks missed during the Shapella upgrade.

image 34

On a more technical level, some consensus layer clients encountered older attestations and were forced to load up older states for verification, which caused these systems to overheat and malfunction. 

Nevertheless, some clients did not encounter this issue due to a difference in design approach. Hence, validators running these clients continued to process transactions and produce blocks. 

In both incidents, the affected validators returned online within 20 minutes and an hour, respectively, with the participation rate quickly jumping back to over 98%.

image 34 1

Inactivity Leak: A First For Ethereum Network

Fortunately, these incidents did not affect end-users on the Ethereum mainnet, and transactions continued to be processed as usual. However, the second incident resulted in the first-ever Inactivity Leak, an emergency state utilized to recover Finality on the Beacon Chain.

image 34 2

An inactivity Leak is a state where inactive validators are increasingly penalized until they are diluted out of the chain or begin participating once more. 

During the Inactivity Leak, the amounts subtracted from validators’ beacon chain accounts are effectively burned, resulting in less ETH issuance during that time.

Nevertheless, these incidents serve as a reminder of the importance of network security and the need for a reliable and robust validator ecosystem. However, the Ethereum community must continue to take proactive measures to prevent future incidents and ensure the smooth operation of the network.

Related Reading | Weekly Market Watch: Bitcoin & Ethereum Tumble While Altcoins Struggle To Survive

Ethereum’s Post-Upgrade Liquidity Surge: What Happened To The 1.55M ETH?

by

Glassnode, a blockchain analytics firm, has released a report on what happened to the 1.55 million Ethereum (ETH) that was withdrawn after the Shanghai/Capella hardfork. This upgrade empowered users to receive rewards that had accumulated, withdraw their staked positions, or make modifications to their staking configuration.

Glassnode’s report revealed that the Ethereum market remained stable despite the increased liquidity resulting from the upgrade, contrary to popular belief.

Instead, the market witnessed a temporary price surge to $2,110 in the week following the upgrade, which eventually reverted back to $1,920, likely due to the overall decline in the digital asset market.

image 20
Glassnode

In a previous report, Glassnode attempted to gauge the degree of true sell-side pressure expected from the withdrawal of the ETH, which they estimated to be around 170k ETH.

In their latest report, Glassnode analyzed the post-upgrade situation, giving particular attention to the entities responsible for initiating withdrawals and deposits and the balance between them.

Glassnode estimated that during the week following the Shanghai/Capella update, approximately 789.5k ETH would be withdrawn, with 170k ETH being sold. However, Upon examination, it was found that the actual numbers of ETH rewards and unstaked ETH were between the estimated and maximum possible amounts. 

Partial Vs. Full Ethereum Withdrawals

Specifically, 856k ETH rewards were earned, and a total of 232k ETH was unstaked, with 80% of that amount being withdrawn partially. Further analysis was conducted to determine how much of the withdrawn stake was sold.

image 21
Glassnode

According to Glassnode’s analysis, the amount of unstaked Ethereum and rewards after the upgrade was within their estimated range, with 856k ETH in rewards and a total of 232k ETH being withdrawn. Most withdrawals were partial, which accounted for 80% of the released ETH. 

Despite the upgrade introducing new withdrawal options, there was no significant increase in inflow volume, with up to 1.8 million ETH of exchange inflows in the first week after the upgrade. These numbers were much smaller than previous sell-side events and in line with typical inflow patterns. 

Approximately 300k stakers needed to update their withdrawal credentials to receive staking rewards, with 85% of missing credentials being updated in the first week and over 200k credentials updated in the first two days. Currently, 98% of the credentials have been updated.

Nevertheless, Glassnode’s report suggests that the mechanics of Proof-of-Stake for both incoming and existing validators have played out as intended, with Ethereum’s consensus mechanism remaining stable throughout the process. It is likely to de-risk longstanding engineering challenges, with net positive effects for the network’s security and the Ethereum market in general.

Related Reading | Bitcoin BRC-20 Tokens’ Market Cap Inches Closer To $1B