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Analysts' Insights

Analysts' Insights

Crypto Markets at a Glance

1) Bitcoin (BTC) prices have been pinned at $26,000 for two weeks. The conclusion from Fed Chair Powell’s Jackson Hole meeting is that the Federal Reserve wants to keep its rate hike options open while acknowledging that they wait and see how the previous hikes impact the economy. The Fed had switched to the slower-moving ‘core CPI’ index. Based on our inflation model, CPI will drop to 2.0% by the end of the year.

2) Bitcoin price is $26,053, below the 50d MA $28,878 — this is bearish. Notably, the week-on-week (WoW) price decreased by -0.3%. Ethereum price is at $1,654. below the 50d MA $1,823 — this too is bearish, with the WoW price decreasing by -0.8%. Overall the trend is down, which marks a bearish trend.

3) Ethereum (ETH) is outperforming Bitcoin currently, as the trend (20d) MA shows ETH / BTC ratio is going up. Bitcoin is primarily being used to express viewpoints while interest in Ethereum is suffering from a lack of positive network developments. Crypto also appears to be driven by macro factors.

4) The futures funding rate trades positive for Bitcoin (1%) and the funding rate is positive for Ethereum (4.4%) — this is bullish. Leveraged traders are still eyeing a breakout and are willing to pay fees in the form for funding rates. Our Greed & Fear Index prints 2%, while the Ethereum Greed & Fear Index prints 6%. The RSI for Bitcoin is 26% while the Ethereum RSI is 32%. Bitcoin prices are oversold but a lack of upside momentum keeps us cautious.

5) Bitcoin exhibits an at-the-money implied volatility trading at 32%, which aligns closely with the 30-day realised volatility. Volatility levels are similar for Ethereum, although historically, Ethereum volatility typically averaged +30% higher than Bitcoin volatility This is likely because more Ethereum is now being staked, making Ether less volatile.

6) TVL — a metric used to measure the total value of assets locked or staked in DeFi or DApps — has dropped to near the December 2022 lows of just $38bn. In 2023, TVL peaked in April at $52bn while the peak was at $177bn in Nov 2021.

7) The most important protocols based on TVL are: Lido at $14bn (+0.3% WoW), MakerDao at $5.2bn (-3% WoW), Aave at $4.5bn (-1%), JustLend at $3.3bn (+0%), Uniswap at $3.3bn (+0%), and Curve at $2.4bn (+4%).

8) Volumes on Uniswap dropped -18% WoW, PancakeSwap by -11%, Maverick Protocol by-15%, and Curve by -45%. Volumes and fees indicate less activity around DeFi.

9) Ethereum fees have dropped -18% WoW to $29m. Fees are projected to reach $135m for August 2023, compared to $197m in July 2023, which is a projected -32% MoM decline. Tron generated $17m in fees, Lido registered $11m, MakerDao contributed $9m, Uniswap followed with $6m and friend-tech at $4.8m. Meanwhile, Bitcoin generated $3.2m in fees for the week.

10) The PEPE meme coin (PEPE) dropped -21% WoW as the project’s team (or individuals of the team) are allegedly orchestrating a rug-pull, which involved 16 trillion tokens ($16m) being moved to various exchanges. PEPE still has a market cap of $376m. At its peak, PEPE had a market cap of $1.7bn (May 6 2023) when Binance listed the token. Near the peak, Coinbase had suggested Pepe the Frog was a “hate symbol”, leading to a public apology to the PEPE community. The token price is -30% lower since then.

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