Weekly Research Report #103: Temporary Relief
May 23, 2022
Crypto market took a breather after the brutal decline last week, with $1.3T total crypto market cap.
Bitcoin recorded eight consecutive weekly red bars, dropped another 2.4% and was struggling at the psychological level of $30k.
Altcoins showed familiar price actions with larger extent while $LUNA was up after Do Kwon’s announcement of Terra’s new plan ($ETH -3.9%; $SOL -10.7%; $AVAX -13.3%; $LUNA +0.9%).
BTC and ETH funding rates continued to trade at premium, +7.3% and +8.0% respectively (Chart 1).
Alts funding rates were slightly up this week but still pointing towards south (ADA -16%; DOT — 19%; SOL -20.2%).
For liquidation, calm activities explained the boring price actions in the market. The only notable event was the $570m long liquidation on 20 May, which brought $BTC from $30.3k down to $29.1k (-3.9%).
Chart 1: 7dma of BTC, ETH Perpetual Futures Funding Rate (Source: FTX)
Chart 2: 4hr BTC liquidation chart (Source: Coinglass)
(May 23, 2022, Major Crypto KPI)
No recovery for the alts.
For Smart Contract Platforms, tokens continued to drop this week ($SOL -10.7%; $AVAX -13.3%; DOT -11.9%; ADA -9.8%).
Stablecoins’ market dominance went up higher this week [USDT.D at 5.9% (+0.4%); USDC.D at 4.1% (+7.8%)]. Total market cap for stablecoins was $162B.
On Web3 front, the leading NFT token, ApeCoin ($APE) dropped 7.1% to $7.9; STEPN governance token $GMT ranged between $1.6 and $1.3, ended the week at $1.4 (-6.0%).
Terra’s founder, Do Kwon released a new revival plan for
the Terra blockchain ecosystem. Existing blockchain will be forked into a new chain without $UST and called Terra (LUNA) while the old blockchain will be renamed to Terra Classic (LUNC). New LUNA tokens will be airdropped to original LUNA stakers. The circulating supply of the new LUNA tokens will be reset to 1 billion.
The leading NFT marketplace, OpenSea, announced the new web3 marketplace protocol, Seaport. Seaport will offer innovative ways for users to trade NFTs, including a bartering function.
After crypto crash and $UST collapse, discussions about cryptocurrency regulation heightened.
US Treasury Secretary Janet Yellen raised the stablecoin concern last week;
G7 Finance Ministers urged the Financial Stability Board (FSB) for quicker advancement of crypto regulations;
French Central Bank governor Francois Villeroy mentioned that ‘stablecoin was misnamed and possibly very unstable’.
Elwood Technologies, a crypto trading platform founded by Alan Howard, announced a $70m new funding round, led by Goldman Sachs and Dawn Capital. This funding round brought Elwood’s valuation to $500m.
Amberdata, a data provider of digital assets, raised $30m in a Series B funding round, led by Knollwood Investment Company. Amberdata aimed at creating data analytics and providing information needs such as blockchain and defi data for financial institutions.
Coins.ph, a digital asset exchanges in the Philippines, raised $30m in a Series C funding round, led by Ribbit Capital. Coins.ph was acquired by ex-Binance CEO Wei Chou for $200m in April, the new funding was said to be used on Web3 expansion.
Incoming rate hike concern continued to pose threat on the entire global market. Equities had another dip with tech stocks suffered the most (S&P500 -2.8%; DJIA -2.9%; NQ -4.4%). Commodities price actions were mixed, with Gold, a store-of-value-like asset, slightly outperforming the others (Gold +1.9%; Oil +0.9%; Wheat -0.7%).
Crypto market was still at fud, topics on crypto regulations were on the table. Macro concerns lowered investors’ risk appetite. Always keep your bullets safe in a bear market and load your gun once the bull returns. Good Luck!