In the 40th issue of the Broker’s Beat, we take a look at ETH staking trends and talk about metrics that holders should keep an eye on.
BY THE NUMBERS
“Crusoe Energy, a Colorado-based mining and alternative energy firm, is tackling Bitcoin’s climate impact in a previously unseen manner, as per a feature on tech publication TechCrunch today. The firm has raised $128 million from investors for its cause.”
Source: Crypto Briefing
“Aave has launched liquidity mining, which will allow lenders and borrowers to receive additional token rewards from the platform.”
Source: The Block
“Bitcoin mining firm Genesis Digital Assets has ordered $93.63 million worth of new machines from Canaan. “
Source: Coin Telegraph
“Beijing authorities are reportedly conducting inspections of crypto mining data centers to better understand their impact on energy consumption, Reuters reported on Thursday.”
Source: The Daily Forkast
“Online gaming giant Nexon added 1,717 Bitcoins worth US$100 million into its corporate treasury, stamping the largest crypto purchase from a Tokyo Stock Exchange-listed firm.”
THE BITCOIN BEAT
The price of Bitcoin has been on a decline since the 14th of April when it made an all-time high of $64,917. From there we have seen a decrease of 27.4% measured to its lowest spike at $47,141 on the 26th. Since then another rise has been seen with the price coming back up to $55,766 on the 28th but it started moving sideways. Currently, it is being traded at $54,528.
On the 15 min chart, you can see that the move from the 14th is counted as the complex correction count in a five-wave manner. Considering that the price spiked down further on the 28th means that from the 23rd we haven’t seen a starting impulse to the upside.
However, if the corrective count ended we are seeing the start of a new upward structure that could lead to further price appreciation but it’s still unclear what this structure is. Considering the amount of increase in one go and the sideways movement seen after it most likely this isn’t the first sub-wave of the next five-wave move. In that case, the price should have moved much slower initially and retracted back deeper on the 2nd sub-wave.
This is why we could be seeing another corrective rise before further downside movement that is going to bring the price further down below the $47,140 area. Today we have seen a breakout of the upward channel which could be the first sign that the price is now starting to head down but still the price maintained above the significant horizontal support which is why the situation is still pretty vague.
The breakout direction from the current range might be the first minor indication of the future price progression however the wave structure doesn’t paint a clear picture in order to properly evaluate the likelihood of the expected move.
Our inflow/outflow discussion today will mostly center around long-term holders and how they’ve been acting recently. In 2017, these holders started to drop their positions and quickly went from 74% of supply to 58%.
Right now, the exact opposite is happening and we’re seeing the amount of supply aging into the long-term holder category going up. It is now past 67%.
Although metrics are all trending in the right direction to indicate long-term holding, this can change at any moment.
There are three different metrics you want to watch for: ASOL, CDD, and Dormancy.
ASOL tells us the average age the Bitcoin spent in a transaction, and if this is low, that indicates that it’s mostly short-term holders who are spending.
Next, you have Dormancy. This represents the average age per unit of BTC move, and would only go up if long-term holders were moving their tokens.
Finally, CDD is a representation of the total volume of coin-days destroyed and if we see this spiking, long-term holders are moving their money around.
The hash rate has experienced a highly significant recovery from its lowest on the 23rd when it came down to 131.79M as it came up to 154.23M where it’s currently sitting.
The previous decline was due to the power outage in China which affected the local miners but the situation is now looking like it’s going back to normal which is why we have seen the return of the hash power. However this estimate is potentially only a false signal and could continue moving down in the following days, but for now, it is made back to the levels on which it was on the 18th of April.
If this recovery continues new highs could be seen in the upcoming period and a new all-time high in the month of May.
The valuation of the miners revenue has been moving sideways from the 21st of February when it came up to $59.244. Following the price chart, it has also been forming a parallel ascending range.
It spiked to $80.172M at its highest point on the 15th of April but this rise was followed by an immediate pullback to the $45M area on the 17th. It is currently sitting at $56M as it further consolidates but will shortly make a more decisive move that would correlate with the price movement.
If the corrective count of the highest degree from the 21st of February ended on the Bitcoin price chart, we could see the start of the uptrend that is to lead the price for new all-time highs which would also be the case with the miners revenue valuation. But if the corrective structure is yet to develop the miners revenue would make another lower low compared to the one on the 17th of April.
In the last week, some of the biggest news was around the massive push into Ethereum that’s occurring. We’ve already discussed the recently unveiled ETH ETFs in Canada, but another liquidity factor is the amount of ETH being staked.
As you can see in the chart below, the total amount staked is continuing to trend up, which represents fixed amounts of ETH that will not be accessible till after the ETH 2.0 upgrade.
So with this going on inside the cryptocurrency sector, external demand factors are having a more pronounced impact. Germany has just announced that they’d be allowing institutional investment funds to invest in crypto assets, and Visa is presenting more ways they could see Bitcoin integrating with their system.
You can look forward to our lending report at the end of this week, but in the meantime, our friends at Blockhack are running a hackathon in the first week of May that you should definitely check out!