Follow the crypto market situation and understand market trends. Hello everyone, I am Xinyi
Follow the crypto market situation and understand market trends. Hello everyone, I am Xinyi.
The price of Bitcoin has experienced a 4.9% adjustment in the days since October 8th, when it failed to break through the resistance of $28000. Derivative indicators indicate that market sentiment is dominated by fear.
From a broader perspective, Bitcoin's performance is satisfactory, especially compared with gold, which has fallen by 5% since June, and compared with treasury bond inflation protected bonds, which fell by 4.2% in the same period. Bitcoin, which remains at a level of only $27700, has already surpassed the two safest assets in traditional finance. Given that Bitcoin failed to break through the price of $28000 on October 8th, which is a crucial price level, some investors have become indifferent to the market. Bitcoin derivative indicators indicate that traders' confidence is declining, which can be attributed to the US Securities and Exchange Commission's repeated postponement of spot Bitcoin ETFs and concerns about the exchange being threatened by terrorist organizations.
The current negative sentiment towards cryptocurrencies seems to have made macroeconomic uncertainty and Bitcoin's natural hedge protection ineffective. At least from the perspective of derivatives, the possibility of Bitcoin prices exceeding $28000 in the short term seems unlikely. According to the clearing data provided by Coinglas, there is a very balanced trend between long and short orders. If the price drops below $26500, it will lead to more price drops. The clearing intensity at $26500 is also relatively high, and in the upward direction, the price is concentrated around $27200, which will create resistance in the short term. In short, from this clearing map, the long and short orders are currently very balanced and do not lean towards either side, The specific direction in which Bitcoin prices will develop has become even more uncertain.
When it comes to Ethereum prices, its price trend is much more severe than Bitcoin. According to data from IntoTheBlock, the network fee revenue of Ethereum blockchain has dropped to its lowest level since April 2020, a 90% decrease from its peak in May this year. Data shows that in the past 30 days, due to low blockchain activity, the supply of ETH tokens has increased by 33500, valued at approximately $52 million. The decline in fees is testing ETH's ultra robust currency theory. As speculative activity dries up and users continue to migrate to layer2, network fee income may remain at a low level, which is detrimental to Ethereum prices.
According to CoinShares' data, as of October 6th, Bitcoin dedicated investment funds have attracted $246 million in inflows this year, while Ethereum funds have lost capital and outflows of $104 million during the same period. This difference may be due to the increasing potential for approval of spot Bitcoin ETFs, which will attract $600 billion in funds. In addition, the fourth halving of Bitcoin will be held on April 24, 2024, which has also played a boosting role in the alternative currency market.
As the SEC has been delaying the decision on spot ETFs, market sentiment has been brought to a freezing point. According to analysts, Ethereum prices are still facing a crisis and there is a risk of falling below the critical support level, possibly below $1500. Because multiple data indicators show a pessimistic outlook for prices. From October 6th to October 12th, the price of Ethereum fell by 7%, reaching a 7-month low of $1520. Although there was a slight rebound on October 13th, pulling it up to $1550, according to multiple indicators, investors' confidence and interest in Ethereum seem to have been weakening.
Some people may think that this dynamic reflects a general lack of interest in cryptocurrencies, which is particularly evident when Ethereum search volume reaches its lowest point within three years. Interestingly, this price fluctuation is related to Ethereum's average 7-day transaction fee dropping to $1.80. Just two months ago, these fees were as high as $4.70, which is also considered high, but now the transaction fee has significantly decreased.
Of course, there are many reasons here, such as the decrease in the founder's online sales activities. These are all the reasons. Ethereum's pledge income has decreased from 4.3% to 3.6% in just two months. This change, accompanied by an increase in ETH supply due to a decrease in destruction mechanism activities, has reversed the current scarcity trend.
On October 12th, ACPR, a branch of the French Central Bank, raised regulatory concerns after emphasizing the high concentration of risk in Defi. ACPR's report suggested the need to develop specific rules to manage smart contract authentication and governance to protect users. The derivative data and total lock in value also reflect Ethereum's control over air drops, and the premium of Ethereum futures reached its lowest point in five months on October 12th, indicating insufficient demand for leveraged long positions. Interestingly, even though Ethereum prices rose by 8.5% between September 27th and October 1st, ETH futures failed to break the neutral threshold of 5%. The total value of Ethereum's lock-in (TVL) decreased from 13.3 million ETH to 12.5 million ETH in the past two months, indicating a decrease in demand.
This trend reflects the weakening of confidence in the DeFi industry. Compared to traditional US dollar finance, which provides a 5% return, DeFi has fewer advantages. In order to evaluate the importance of reducing the total value of lock-in positions, it is necessary to analyze the indicators related to decentralized applications and DAPP usage. Some DAPPS, including decentralized exchange DEX and non homogeneous token NFT markets, do not require a large amount of funds, so the value stored is irrelevant, Unfortunately, for Ethereum, the decline in TVL is accompanied by a decrease in the activity of most DAPPS in the ecosystem. Including the leading Uniswap and the largest NFT market, Opensea, the reduced demand is also evident in the gaming industry, with only 6180 active accounts on the Stargate network.
Considering the reduced demand for leveraged long positions, the decrease in collateral yields, regulatory uncertainty, and a lack of broader interest, the possibility of Ethereum falling below $1500 is relatively high. If we test $1515 multiple times in the future, the likelihood of falling below $1500 will increase.
However, it is worth noting that according to the latest news, Proshares has recently launched a series of Ethereum Futures Exchange Traded Funds (ETFs). The fund's latest product, shortETHstrategyETF, is an Ethereum Futures ETF that is airdropped, with the stock code SETH and plans to start trading in November. According to the documents submitted on Friday, October 13th, the ETF plans to be listed on the Arka Exchange on the New York Stock Exchange. The fund does not engage in direct short selling in ether, but attempts to take advantage of price declines. The price of the ETH on Friday was approximately $1540, a decrease of about 6% from the past week. Proshares expects that the registration statement for the ETF will take effect on October 15th and plans to launch the fund in early November.
Finally, there is another news that due to customer demand, Ferrari will accept requests from luxury sports cars in the United States to use cryptocurrency for payment. This car manufacturer also plans to accept cryptocurrency payments in Europe.
According to a Reuters report on October 14th, Ferrari's Chief Marketing Officer Enrico has confirmed the intentions of this luxury car brand. Ferrari's choice to accept cryptocurrency payments is driven by market demand and dealer requirements, as many customers have already invested in digital currency. Although Enrico did not specify how many cars Ferrari expects to sell through cryptocurrency payments, there are reports that the automaker's strong order portfolio is fully booked until 2025. Ferrari hopes to connect with potential buyers through testing this expanding market, surpassing its usual customer base. The luxury automaker plans to introduce cryptocurrency payments in the first quarter of 2024, And it will be expanded thereafter, gradually increasing support for cryptocurrency friendly regions.
In the initial stages of the United States, Ferrari had already partnered with Bitpay, which made it possible to trade cryptocurrencies such as Bitcoin, Ethereum, and US dollar stablecoin. Enrico confirms that there will be no additional fees or surcharges when using cryptocurrency, as Bitpay will quickly convert cryptocurrency payments into traditional fiat currency to ensure that Ferrari dealers are not affected by cryptocurrency price fluctuations.
Many large companies were hesitant to adopt cryptocurrencies due to price fluctuations and inconvenience associated with transactions. One of them is Tesla, an electric vehicle manufacturer that initially began accepting Bitcoin payments in 2021. However, due to environmental concerns, Musk suspended this payment method. Overall, Ferrari has brought good news as we once again see well-known companies increasing their support for cryptocurrencies.
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