The TIE Weekly Insights (Oct 12)

Some highlights from this week:

  • Bitcoin saw its best weekly return since July at 6.25%
  • Square purchases $50 Million worth of Bitcoin amounting to 1% of their total assets
  • Kraken becomes the first digital asset company to receive U.S. Bank Charter
  • BitMEX Founders Hayes & Reed resign days after DOJ files charges against them
  • Binance and Bybit have passed BitMEX in Bitcoin Futures Open Interest
  • Uniswap continues to hit record highs as it surpasses $2.6B in Total Value Locked
  • Stablecoins grow in popularity amidst the DeFi craze

Market Overview

The total cryptocurrency market cap saw a 6% increase from $339B to $359B this week. Weekly returns were positive, with LINK leading the pack at 12.25%. Long-term sentiment scores for the majority of the Top 10 are high, while Litecoin has increased from Low to Neutral. Tweet Volumes were down across the board.

Market Overview

Bitcoin averaged a high sentiment score of 62.4 this week, while Altcoins all averaged neutral daily sentiment scores.

Crypto Sentiment

DeFi continues to be the highest trending topic, despite decreasing -23% this week. Media coverage of Central Bank Digital Currency increased by 128%.

Crypto Topics Trending In The Media This Week

Bitcoin Pumps Through $11k Resistance

Bitcoin saw a 6.25% return, the best weekly performance since the end of July. 6 out of 7 days closed up/green this week. BTC traded within a 9.4% range, from the low of $10,529 to the high of $11,434. Conversations regarding Bitcoin were neutral or slightly negative on Monday and Tuesday, indicated by our sentiment score. Sentiment started surging higher on late Wednesday, followed by a price pump & Square’s $50M BTC investment news on Thursday. That’s a total of ~4700 Bitcoins. Square is only the 2nd publicly listed company after Microstrategy to add Bitcoin to their corporate treasury. This is a positive step for the entire community as it opens the doors for many public companies to follow in their steps.

Bitcoin Price vs Sentiment

Bitcoin Futures Open Interest on BitMEX has been steadily declining over the past few months, but the recent leadership changes & federal charges against the exchange have led to OI dropping even faster. BTC OI on Binance and ByBit have both surpassed BitMEX. This is pretty substantial as BitMEX has led the derivatives market for the past few years. All 3 exchanges have roughly ~$400k in Bitcoin Futures Open Interest. It will be interesting to see if one of them starts to outpace the others, or if they will continue to stay close to one another.

Bitcoin Open Interest

Stablecoin Demand Amongst DeFi Hype

The 30d average percentage of Tether related Tweets coming from unique accounts has increased from 25% to 67% in the past 30 days as Stablecoin popularity grows with the demand of DeFi.

Stablecoin Demand

NVTweet Ratio has increased by 308% in the past 6 weeks. An increasing NVTweet Ratio could suggest that a particular coins’ market is becoming increasingly driven by institutional trading. As market cap is increasing faster than social volume, this may suggest less retail involvement in the market for a particular coin.

Tether NVT Ratio

Aggregated Tweet Volumes for Stablecoins have seen two major increases this year. Once back in April during the market’s rebound from the March selloff, and the recent DeFi craze in Q3. Tether and DAI have been the center of attention during these runs.

Aggregated Stablecoin Tweet Volume

DeFi Overview

RUNE, UMA, and Kava saw the biggest positive returns this week, while YFI and new projects like SUSHI and CRV suffered. The median DeFi asset is up 1.8%.

DeFi Returns

Uniswap continues to lead the rankings as it records new TVL highs, taking up 24% of the Total Value Locked in DeFi. To put that in perspective, TVL for all projects outside of the top 5 makeup 28%. WBTC has surpassed Curve Finance for the 4th spot. Aave saw the biggest decrease in TVL this week at -15%.

TVL in DeFi

The amount of BTC locked in Sushiswap dropped -88% this week, from 668 BTC to 80 BTC. TVL in Sushiswap decreased, which can decrease the perceived value of an asset and ultimately tank the price as we saw this week.

BTC Locked in Sushiswap

Buy Thursday Dips & Sell Friday’s Close?

When we look at returns per day of week for the top 10 cryptocurrencies, we can see some interesting patterns. Most of these asset’s returns have a positive correlation. Monday, Tuesday, Wednesday, Friday, and Saturday are mostly positive returns while Thursday and Sunday are negative. Thu/Fri interest me the most because the lowest average returns are on Thursday followed by the highest average returns on Friday. Combining this data with some other parameters could produce interesting backtest results for a potential day of the week trading strategy.

Average Return per Day of Week for Top Cryptocurrencies

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