This year is much warmer than last year.
Editor’s note: This article comes from the strategic cooperation blockchain media “Odaily Planet Daily” (Public ID: o-daily, < a href="https://download.odaily.com/">APP Download)
(Image from Cointelegraph)
OKEx Quotes shows that on June 27 this year, BTC hit a high of the year, close to $14,000. Then the price began to decline, with the lowest falling to around $7,700 and the biggest drop of more than 45%.
In the past month, blocked by the downtrend line, BTC prices have been hovering at $8,000. However, at 20 o’clock last night, the market turned sharply and BTC briefly fell below $7,300.
(BTC daily chart from OKEx)
As of press time, BTC quoted $7,450, and the cumulative increase since this year was only 98%. Other mainstream currencies have not performed well this year: LTC (+61%), BCH (+34%), ETH (+19) %), EOS (+5%), XRP (-22%).
The wilting market has also caused many people to sigh: Encrypted winter has arrived, it is time to store grain for the winter.
However, the author believes that the following data shows that the market still has hope and still has a strong vitality.
1. Admission of funds, stable currency is still in issue
For the market, stable currency is an important channel for legal currency deposits. The additional issuance and destruction can reflect the flow of funds to a certain extent: the increase of funds means the inflow of funds, and the destruction is the outflow.
According to Longhash monitors data, when the cryptocurrency entered the bear market in 2018, the USDT circulation decreased from 2.74 billion (early September 2018) to 1.87 billion (end of December) ), a drop of more than 30%.
(USDT issuance)
From the beginning of this year to October 23, the number of USDT issuance increased from 1.87 billion to 4.11 billion, an increase of 119%.
It is worth noting that although the market started to decline after June 27 this year, the USDT is still in the issuance. From June 27th to the present, an additional 1.11 billion pieces have been issued, an increase of 37%.
In view of the controversy over the USDT, which is often considered to be inflated and opaque, we have decided to look at market liquidity through compliance with stable currencies.
There are currently four mainstream compliance and transparent stable coins on the market: Circle (USD Coin), Gemini’s GUSD (Gemini Dollar), Paxos’ PAX (Paxos Standard), and TrustToken’s TUSD (TrueUSD).
(Stable currency issuance, Odaily Planet Daily statistics)
LonghashAccording to the data, the total issuance of the above four stable currencies on June 27 was 801 million, with a maximum of 892 million, the highest increase of 11%; the current total is 840 million, an increase of 4%.
From the perspective of individual issuance, USDC has the highest increase of 25% during this period, and the current increase is maintained at 12%; PAX has the highest increase of 70%, and the current increase is 33%.
(USDC, PAX issuance in the past six months)
Based on the above data, we can also conclude that despite the downturn in the past few months, the encryption market still has a large amount of capital to enter, and the outflow of funds is not obvious.
Inflow of funds also supports the volume of transactions in the encryption market.
CoinMarketCap data shows that the average daily trading volume in June this year was about $82 billion, and the average daily trading volume in October this year. For the $53 billion, the decline was about 35%.
(2019 transaction amount)
And, the amount of $53 billion is not small, with a single day trading volume of just over $10 billion in the same period last year. The activity of the encryption market transactions this year is much higher than last winter.
(2018 transaction amount)
In addition, in the bear market in 2018, the single-day transaction volume dropped by more than 80%. The current market transactions are far better than the bear market in 2018.
Second, the DEFI market is booming
In addition to the spot market, the Decentralized Finance (DEFI) market is also booming.
DeFi Pulse data shows that the total value of tokens currently locked in the DEFI market is $5.446, an increase of more than 87% from the beginning of the year.
(Image courtesy of DeFi Pulse )
Although the value of the DEFI market has shrunk by more than 30% since July this year. But since 2 months ago, the market has gradually warmed up and has risen more than 20% in the past two months, showing a bullish momentum.
Third, the volume of CME contracts continues to increase
In addition to this, there has not been a big decline in the futures market.
Although BitMex’s trading volume has continued to fall in the past few months and hit a new low for several months ($948 million) on October 11, the more important reason for this result is its own non-compliance.
(BitMex transaction amount)
In contrast, the bitcoin futures contract of the CME (Chicago Mercantile Exchange) has been popular in the past few months.
CME says that the past few quarters have been flat The number of warehouse contracts continued to rise, and the third quarter was only 1% lower than the second quarter;Compared with the third quarter of 018, the open interest in the third quarter of 2019 increased by 61% year-on-year; in addition, the average daily contract volume in the third quarter was 5,534, an increase of 10% over the same period last year.
(CME Bitcoin contract data)
CME explained that these transactions are mostly from institutional investors. “Institutional financial flows remain strong, with 454 new accounts added in the third quarter and 231 new accounts in the third quarter of 2018. “
CME adds that organizations include Pension funds, endowments, insurance companies, mutual funds, and clients are primarily portfolio/investment managers of institutional investors.
However, it is worth noting that since October of this year, CME’s contract transactions have declined slightly, and the average daily trading volume has fallen to 3,376, or 16,880 BTC.
(CME October transaction data)
IV. Institutional funds continue to flow into the market
Canadian Encrypted Lending Company BlockFi shows that after the bear market in 2018, institutional investors are increasingly interested in cryptocurrency and are entering the market.
Report pointed outAt present, there are 201 private funds in the United States involving cryptocurrency investments, accounting for 1.3%. Although the ratio is not large, the ratio is not small for emerging assets.
And, of the 201 private funds, 18 billionaires have invested directly in cryptocurrencies, and they manage more than $286 billion in funds; assuming 1% of these funds invest in cryptocurrencies Then, the traditional fund of $3 billion to $5 billion enters the field of encryption.
If the above report is still based on speculation, the grayscale company’s report confirms that institutional users are accelerating admission.
Recently, crypto asset management agency Grayscale( Grayscale) published the third quarterly report for 2019 and said it was a record-breaking quarter.
The report said that although the gains on the gray-scale trust products generally rebounded this quarter, their investment inflows tripled from the previous quarter – from $84.8 million to $254.9 million, an increase of more than 200%.
(Grayscale Report)
The main source of these funds is still institutional investors represented by hedge funds, accounting for 84%. The grayscale report emphasizes that institutional funding has risen by more than 80% compared to a year ago.
The funds from institutional users will directly promote the rise of the encryption market. On the other hand, it will form a good demonstration effect, which will inevitably drive more traditional funds into the market and form a positive positive cycle.
Summary
The market is currently in a correction cycle, and mainstream currencies including BTC and ETH are being suppressed by the 100-day moving average.
Cryptographic Analyst Keith Wareing said that the current BTC must stand at $8,120 in order to continue to rise; followed by resistance at $8550, $99,000 and $12,100; once the BTC falls below $7,860, It fell to around $7,600 and around $7,000, which could lead to a larger sell-off, prompting miners to shut down.
