The Weekly Update

Week 16, 2020

Provided by
1 Market Update
▪ The crypto market stayed volatile last week, with boost over the last
couple of days. Trading volumes are not very impressive at the moment
and the market is still extremely fearful.
▪ This is also reflected on Bakkt, where delivery of physical BTC dropped
60% as the contracts for April expired this week Stablecoins (in USD) on Exchanges
▪ Many investors may be looking for the right time to buy crypto again,
with stablecoin balances on crypto exchanges now surpassing all-time $2,500m
high. Over $2 billion are on the sideline waiting for the buy signal.
▪ Others are seeing the current price level as an opportunity and stimulus
money find its way to bitcoin as Coinbase registered a spike in $2,152m
buys/deposits equaling the amount ($1,200) of the stimulus checks that
were sent out this week.
$2,000m

2 Valuation +119.5%
• The bitcoin price topped out around $7,400 last week and is struggling to
surpass the $7,000 area this week. It will be interesting to see if the price
$1,500m
hold above the 50-day moving average and continue towards the
$8,000 area where other important moving averages are found.
• The futures market for bitcoin still looks unstable, as some platforms still
see negative premiums for their June contracts – so-called
backwardation. CME traders are still more bullish than retail, but the $980m
overall trend for futures premiums have been declining since February. $1,000m
Tether

*Other

3 Blockchain Activity $500m

• On-chain metrics tells us that the bitcoin price is at an important level, as

Net Unrealized Profit/Loss is pushing towards 0.25.
• There could be a sign of increased adoption, with addresses holding more
than 0.01 BTC increasing rapidly. However, this could also have different
explanations, i.e. whales moving coins through coin mixing services for $0m
security reasons. Apr 19 Jul 19 Oct 19 Jan 20 Apr 20
• Other metrics tells us that the demand on the Bitcoin network is dropping,
which is a bearish signal.
 Another volatile week in the crypto market
▪ The last week has been volatile in the crypto market, but a late spike over
Bitcoin Correlation:
the weekend “saves” the week. 90-day correlation
ETH XRP GOLD S&P500
(weekly change included)

▪ Ether (ETH) is looking strong these days, making investors hopeful for an BTC 0.936 0.0013 0.904 0.002 0.043 0.007 0.501 -0.005
upcoming bull trend for altcoins.
Source: coinmetrics.io

Is the current price action in the stock market sustainable?

Top 3: Percentage Change in Price Over the Last Week
▪ The stock market is still looking strong and seems to only react to positive
20%
news. Jobless claims in USA have now passed 22 million, or approximately
15% of the total workforce in the country.
▪ Donald Trump wants to reopen the economy as soon as possible and 15.96% ($184.0)
15%
presented guidelines on how the country will get back to normal activity
yesterday.
▪ We’re still not sure that the recent stock rally will continue and that the
10%
market could get a “reality check” soon. This will most likely lead to more
downside for the crypto market as well.
5%
3.95% ($7,193)
Best Performing Price Last week Last month YTD 2.16% ($0.193)
Zcash 47.947 36.30% 45.47% 72% 0%
HedgeTrade 2.066 24.66% 31.67% 22%
Tezos 2.326 21.20% 40.93% 70%
-5%

Worst Performing Price Last week Last month YTD

BTC ETH XRP
IOTA 0.160 0.56% 21.16% -2%
-10%
Bitcoin Gold 9.763 1.60% 31.12% 84% 13 Apr 14 Apr 15 Apr 16 Apr 17 Apr 18 Apr 19 Apr 20 Apr
UNUS SED LEO 1.043 2.21% 3.71% 26%

Last week of top 50 by market capitalization

Source: cryptowat.ch
Source: cryptowat.ch

Apr 20, 2020 3 Provided by

 Ether (ETH) showing strength, but Mid Caps is leading the way
Percentage of Total Market Capitalization
BTC ETH BCH LTC XRP DASH NEM XMR IOTA NEO

Market
62.59% 9.62% 2.06% 1.31% 4.03% 0.37% 0.16% 0.48% 0.21% 0.26%
Share
Weekly
Change*
-0.71% 0.88% -0.03% -0.02% -0.12% 0.02% -0.01% 0.01% -0.01% 0.00%

Source: Coinpaprika.com
Most indexes have seen a small upturn over the last week, as the * Weekly change in percentage points
market bounced strongly over the last couple of days. After topping
out on April 9th, the market is now retesting the same levels.
30% Monthly Performance of Market Capitalization Weighted Indexes
▪ Mid Caps is still leading the way in this month, currently seeing a gain
of 22% in April – holding the gap down to the other indexes.
25%

21.97%
▪ Bitcoin touched down on negative returns on April 15th, but is now up 20%
close to 7% in April.

15%
14.37%
▪ Ether (ETH) is looking strong and is gaining market shares of the total
market, as the rest of the large caps fall back.
10% 10.40%

6.88%
5%

0%

-5%
1 Apr 4 Apr 7 Apr 10 Apr 13 Apr 16 Apr 19 Apr

Large Mid Small Bitcoin

Source: Bletchleyindexes.com

Apr 20, 2020 4 Provided by

 Longest period in “Extreme Fear” registered
The Fear & Greed Index has now been ranging in the “Extreme Fear” area since March 9 th . This equals 6 weeks
with no confidence in the market, even with a significant price over the same period. The last time the market
was fearful for so long, was in Nov/Dec 2018, lasting 4.5 weeks. The current period marks to longest period in
«Extreme Fear» ever registered for this Fear & Greed Index, which launched in Feb 2018.

15
Extreme Greed
100

90
Now Last week Last month
80
Extreme Fear Extreme Fear Extreme Fear
70 (15) (11) (9)

60

50

40

30

20

Longest period in
10
“Extreme Fear”
Extreme Fear registered (Launched in
0
April 19 May 19 June 19 July 19 August 19 September 19 October 19 November 19 December 19 January 20 February 20 March 20

Source: alternative.me

Apr 20, 2020 5 Provided by

 Bitcoin volume drops again – Lowest in a over a month
The 7-day average real trading volume* continues down again, after seeing a small upturn two weeks ago. The
bitcoin volume is now back to the levels seen before the market crash in mid March. It is important that the
volume hold the upwards trend seen over the last three months and doesn’t start a new downwards trend.

3,500

3,000
Trading Volume ($ million)

2,500

2,000

1,500

1,000

500

Real BTC Daily Volume (7-day average)

0
Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 Apr 20
Source: cryptowat.ch *as defined by Arcane Research. Read more here.

Apr 20, 2020 6 Provided by

 The bitcoin volatility drops, but is still high
The 30-day volatility is still decreasing. The market looks less volatile now, but
the price action is still not normalized. We’re now close to 4%, which is much
higher than the levels we saw before the market dumped in March.

10%

9%

8%

7%

6%

5%

4.31%
4%

3%

2%

BTC-USD Volatility (30-day)

1%

0%
Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 Apr 20

Source: cryptowat.ch

Apr 20, 2020 7 Provided by

 BTC Delivery on Bakkt crashes down 60% - lowest in 2020

▪ BTC Futures on Bakkt for April expired this week, Bakkt BTC Delivery
seeing a massive pullback from previous months in 350 $2.50

Millions
2020.

▪ Last month, investors on Bakkt seemed unaffected

-60%
300
by the unstable market situation, but this month $2.00
looks way worse.
250
▪ The amount of BTC contracts held to expiry
dropped 60% in April, down to only 117. This equals
$1.50
a 54% drop measured in USD value. 200

USD Value
BTC
▪ This clearly indicates a more passive approach to
bitcoin from institutional investors on Bakkt, as the 150 293
uncertainty across all markets still is present. $1.00

230
▪ As we reported last week, the open interest on 100 203
CME has recovered nicely. It is now above $200
million again, but still far from the top in February $0.50
around $340 million. 117
50

▪ Bakkt has not seen the same recovery, and is now 15 17

8
at $6 million, down from $19 million in February. 0 $-
Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 Apr 20

BTC USD
Source: Intercontinental Exchange

Apr 20, 2020 8 Provided by

 Freshly prrrrrrrrrrinted money moves into bitcoin

▪ Several countries have presented large stimulus Buys/Deposits on Coinbase with the size of $1,200
packages lately. In the US, stimulus checks of
$1,200 were sent out to people last week.

▪ According to a tweet from the CEO of Coinbase,

Brian Armstrong, they saw a spike in buys/deposits
with the size of $1,200 recently.

▪ From being around 0.1% of the daily buys/deposits

on Coinbase, it jumped to almost 0.4% this week.

▪ Japan is also considering to give 100,000 yen

($930) to everyone, to cushion the economic stress
caused by Covid-19. Will some of that money also
move into the leading cryptocurreny?

Screenshot from Brian Armstrong’s tweet

Source: Coinbase / Brian Armstrong

Apr 20, 2020 9 Provided by

 Stablecoin holdings on exchanges soars to new all-time high
▪ 2020 has so far seen a massive growth in the stablecoin Stablecoins (in USD) on Exchanges
balance sheets across all major crypto exchanges.
$2,500m
▪ The YTD value of the total stablecoin holdings on exchanges
has grown from $980 million on January 1st to $2,152 million as $2,152m
of April 16th.

▪ In other words, there are currently $2.15 billion worth of

$2,000m
stablecoins sitting on the sidelines on crypto exchanges,
waiting for the right time to enter the market.

▪ This signals investors sense an opportunity to deploy capital, +119.5%

maybe because they are expecting a pullback and/or are
positioning themselves for the upcoming halving. $1,500m

▪ Binance is holding 52% of the current idle stablecoin

supply. Its balance includes $1 billion worth of Tether and $110
million worth of USD Coin. $980m
▪ The awareness of the stablecoins has grown alongside its idle $1,000m
balances on exchanges, as The Financial Stability Board of the Tether
G20’s this week released a document raising concerns
*Other
regarding the industry.
▪ «Stablecoins could undermine financial stability and
$500m
major world economies must confront this risk by
implementing a suitable regulatory framework»
-The Financial Stability Board, Tuesday 14th of April.

▪ This FSB-document could be the spark that causes a wave of

new regulatory policies in the industry, which in turn may $0m
influence the market dynamics in the future. Apr 19 Jul 19 Oct 19 Jan 20 Apr 20

Source: Glassnode, Tether.to and TokenAnalyst *Other include: BUSD, HUSD, USDC, PAX and GUSD

Apr 20, 2020 10 Provided by

Valuation

Provided by
 The bitcoin price is struggling with solid resistance level around $7,000

BTCUSD
The bitcoin price met some solid
resistance last week and is still in the
$7,000 area. This week, we’re looking at
moving averages:

▪ After touching the 50-day moving

average last week, the BTC price has
pushed above this level.

▪ If the price manages to push upwards,

we may see a boost up $8,000 where
we find the 100-day MA and the 200- December low
day MA.
▪ Keep in mind that there has been a lot
of trading activity in the $7,000 area
historically, and the road to $8,000 will
not come easy.

▪ The BTC price found temporarily

support at the December low this
week, but continuation down to $5,800
is not out of the picture if this
downwards price action carry on.
50-day MA
100-day MA
200-day MA

Source: Tradingview

Apr 20, 2020 12 Provided by

 The BTC futures market looks unstable
BTC June 2020 Futures Contracts - Annualized Premium Rates (Historically)
20%

▪ The BTC futures market looked back to normal, but has

been unstable over the past week.
16%

▪ Some retails platforms are now in backwardation

again, but the average stays slightly positive.

12%
▪ CME traders continue to be more bullish than retail,
although the premiums have been falling there as well.

▪ Overall, the futures premiums have clearly been 8%

trending downwards since the start of February.

CME
4%
3.61%
Other
platforms
Premium Rates for BTC Futures Contracts Average CME

0% 0.22%
June 2020 September 2020

CME 0.71% 1.92%

Other -4%
0.04% 0.71%
platforms 23 Jan 30 Jan 6 Feb 13 Feb 20 Feb 27 Feb 5 Mar 12 Mar 19 Mar 26 Mar 2 Apr 9 Apr 16 Apr

Other platforms: Average of Bitmex, Deribit, FTX & Kraken Source: CME, Bitmex, Deribit, FTX, Kraken (Apr 16)

Apr 20, 2020 13 Provided by

Blockchain Activity

Provided by
 Turning point for the bitcoin price or continuation to the upside?
Bitcoin: Net Unrealized Profit/Loss
▪ Data show that the metric for Net Unrealized Profit/Loss
(NUPL) went below zero after the market crashed in
1 $20,000
March.

▪ NUPL is simply the profit/loss of a bitcoin calculated by

taking the difference between the current price and the
0.5 $2,000
price at the time the bitcoin last moved.

▪ NUPL is now facing an important level, around 0.25.

Net Unrealized Profit/Loss

0 $200
▪ We can see that this level has been a turning point
historically, leading to more downside in both 2012 and
2014 when the metric returns from the red area.

BTC Price
-0.5 $20
▪ However, the opposite happened in both 2012, 2015 and
2019, leading to longer periods of positive price action.

What will happen this time?

-1 $2

On-Chain Bitcoin Activity (7-day average)

-1.5 $0
Last Last week Last month YTD

Transaction Value Adjusted (mUSD) $3,719 -16.27% -41.50% 15.35%

Net Unrealized Profit/Loss BTC (USD)
Transaction Count 278,327 -0.10% -6.97% -5.70%
-2 $0
Miner Fees (USD) $135,192 -9.87% -58.96% 21.78% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Active Addresses 748,872 -1.18% -3.88% 16.87%

Source: Glassnode (Apr 16)

Apr 20, 2020 15 Provided by

 A sign of increased adoption? Addresses holding more than 0.01 BTC is picking up
• Since March 1st, there has been a growth of 410,000 (5.2% increase) new bitcoin addresses holding more than 0.01 BTC.

• The amount of addresses holding 0.01 BTC or more is currently at an all time high of 8.3 million addresses.

• This growth in new addresses might be a sign of increased user adoption of bitcoin.

• However, the creation of more new addresses doesn't necessarily infer an increase in terms of users.

• The increase in addresses could also be led by whales moving coins around for security reasons through mixing services.

• Another metric, tracking addresses first bitcoin spend (first bitcoin transfer from a new address), shows that the peak of first time spends happened during the 2017 boom.

Addresses With Value Over 0.01 BTC Addresses With Value Over 0.01 BTC YTD
9
Millions

8 April 16th 8.3

7.5m
8.3

Millions
7

6
8.2 5.2%
5 8.1

4
8
March 1st 7.9
3
7.9
2

1 7.8

0
7.7
2010 2012 2014 2016 2018 2020
1 Jan 15 Jan 29 Jan 12 Feb 26 Feb 11 Mar 25 Mar 8 Apr
Source: Glassnode

Apr 20, 2020 16 Provided by

 The aftermath of the bitcoin fork halvings

▪ Last week, both Bitcoin Cash and Bitcoin SV had their halvings. BCH and BSV Shares of Total SHA-256 Hash Rate
5.0%
▪ The halving of the miner subsidies hit the protocols hard in BSV BCH April 10th
terms of the relative shares of the total SHA-256 hash rate: April 8th BSV
BCH halving
4.5%
▪ Bitcoin Cash’s relative hash rate share dropped from halving
3.4% on average to 1.5% on average post halving.
A 56% reduction in hash rate. 4.0%

3.5% Avg. BCH pre halving: 3.4%

▪ Bitcoin SV’s relative hash rate share dropped from -56%
2.39% on average to 1.19% on average post halving.
A 50% reduction in hash rate. 3.0%

▪ Block discovery was slow following the halving, but 2.5%

-50%
normalized quickly due to the difficulty adjustment algorithm Avg. BSV pre halving: 2.4%
of the protocols. 2.0%
BCH Post
▪ But, this difficulty adjustment is prone to be exploited by large halving:
mining pools due to the low relative hash rate. This creates a 1.5% 1.5%
volatile block production rate.
1.0%
▪ On average 77% of the daily blocks are discovered within a BSV Post
7-hour peak activity window on BCH following the halving. halving: 1.2%
0.5%

▪ To read more about the aftermath of the halvings, click here.

0.0%
16 Mar 19 Mar 22 Mar 25 Mar 28 Mar 31 Mar 3 Apr 6 Apr 9 Apr 12 Apr

Apr 20, 2020 17 Provided by

 The Bitcoin on-chain demand is showing weakness

Bitcoin: Network Demand

150 6

140
5
▪ Data shows that bitcoin may struggle to push 130
above the $7,000 area.

BTC (USD) YTD Performance

120 4
The level of demand on the Bitcoin network has

Network Demand Score

▪
dropped lately.
110
▪ Growing demand is measured as a 4,5 or 6. 3
Weaker demand 0,1 or 2. A score of 3/6
100
suggests demand is in an inflection point.

▪ Network demand rose to a 4 in late March after 90 2

touching 5 but is quickly approaching a 3 again.
80
▪ Network demand will need to pick up sharply in
order for the current rally to continue into May. 1
70

60 0
1 Jan 11 Jan 21 Jan 31 Jan 10 Feb 20 Feb 1 Mar 11 Mar 21 Mar 31 Mar 10 Apr

Network Demand Score BITCOIN

Source: Bytetree (Apr 16)

Apr 20, 2020 18 Provided by

Provided by