Crypto Corner - Summary of the Week 29/11/2021


Written by: Yves, Head of Trading at Wirex

The Bitcoin (BTC) price recovered from last Friday’s route (-8.82%), but the main cryptocurrency still needs to break out of its short-term downward trend. The threat of the new variant on the global economy is looming as restrictive travelling measures have been announced by governments around the world. We’ve seen last week the damage caused by the variant discovery across both traditional and cryptocurrency markets. Still, the BTC/USD pair found support and eventually increased by more than 4% this week. It is quoting around $57,200 at the time of writing. Among the top twenty market capitalisations: Ether (ETH), Solana (SOL), Polygon (MATIC) and Uniswap (UNI) have all posted double digit returns this week.

Solana performed on the back of the launch of the Grayscale Solana trust. The fund has only $10.8 million under management, but expectations are high for the so-called ‘Ethereum killer’. The cryptocurrency is up by 24% this week. The Solana ecosystem is enjoying exceptional returns on investment. The total value locked in DeFi reached à new all-time-high this week at $15.27 billion according to DeFi Llama. The Solana DeFi sector is dominated by the Raydium platform where farming can yield double digit or triple digit APRs.

Meanwhile, Ether is still finding support among institutions. The ETH/USD pair is now quoting near $4,600. The native cryptocurrency of the first smart contract blockchain almost reached its all-time-high (ATH at $4,868.79), printing $4,784 on Wednesday. The price of the ETH/BTC pair reached this week it’s highest level since May 2018.

Looking at Bitcoin on-chain data, there are still no clear signs pointing towards a longer-term bearish market. Only the network difficulty, which measures how difficult it is to mine a new block, has ticked down this week from 22.674 to 22.336 trillion. This indicator is mostly positively correlated to the market price. As à reminder, it took a hit in May as the Chinese cryptocurrency crackdown forced miners to leave the network, but recovered later this year when new mining hubs emerged, predominantly in the US. Although this specific indicator could be a matter of concern, the existing downward price pressure is more reasonably explained by:

  • spending ‘long-term holders’ who parted, over the past month, with ‘5.8% of the volume they accumulated since March 2021’
  • spending short-term holders (STH) who are ‘realising losses on net’ according to Glassnode: STHs are capitulating more easily and selling on average at a loss.
  • The persisting high leverage, measured by the ‘futures open interest’ that is still near its ATH (above 400,000 BTCs).

Against these bearish indicators, off-chain exchange reserves are still down this week, the Bitcoin implied funding rates are also sitting in the 9%-10% range. There is no excessive fear nor any excess greed around the first cryptocurrency. Instead, greed might have shifted to the metaverse since Facebook’s announcement to explore the sector. Pieces of virtual land are sold for millions on Decentraland, and hedge funds, venture capitalists (e.g. three arrows capital with Solice) are jumping on the metaverse wagon.


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The above is an opinion piece and therefore should not be taken as financial advice. Please do your own research thoroughly when looking at Cryptocurrency.
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indeed metaverse is getting attention

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metaverse is the future ,:slight_smile:

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