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Gm David,
This week we take a look at the on-chain activity that is happening with BTC, deciphering if the Crypto market is trying to mimic the Equities rally. Will the seasonality 'Uptober' effect be continued? We will also dig into MakerDAO and SushiSwap analytics, and the on-chain reaction that are causing both positive news on their end.
Fees - Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether.
Bitcoin fees decreased 10%, the lowest since late August.
Ethereum, on the other hand, increased 10%, but on-chain activity is still predominantly low.
Exchanges Netflows - The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges. Crypto going into exchanges may signal selling pressure, while withdrawals potentially point to accumulation.
More than half a billion worth of Bitcoin was withdrawn from centralized exchanges, signaling the interest in buying to follow the current equities rally.
Ether continued to see inflows into exchanges with $200M, with its price staying relatively stable.
Uptober Fakeout
Equity markets had the strongest start to a quarter since 1938 with S&P 500 and Nasdaq 100 rallying almost 5% in the week. Bitcoin and Ethereum did not follow the move as strongly with mild gains, 1.58% and 0.85% respectively:
Seasonal effect - October is known as the bear market killer in equity markets, and the reality is that has been historically favorable to Crypto as well. This month performance will probably be tied to the expectations over the current inflationary situation.
The reason for the bounce this time was a large oversold situation in bonds and equity markets.
It certainly has helped bonds touching the 4.00% yield resistance point, and S&P 500 arriving at key support levels.
Aggressive BTC buying - predominant sustained outflows from centralized exchanges might be pointing to a large buying activity around these price levels:
These 3 days with large BTC outflows were the largest in the last 3 months. This buying force probably signals that many investors and traders bought the recent rally and are expecting new highs soon.
MakerDAO $500M bonds purchase
MakerDAO community voted in favor of allocating $500 million for investing in U.S. Treasurys and corporate bonds. This will help the DAO to consolidate the DAI backing by diversifying in a low risk, low yield alternative.
Continuous Whale Accumulation - those Addresses holding over 1% of MKR circulating supply have been increasing their holding consistently over the last 6 months:
Despite the current bear market and implosions of some key entities and protocols in the crypto ecosystem, DAI has maintained its dollar peg without any hiccup. The confidence that large investors have over the protocol is such that currently the average transaction value in DAI is above $1M, a massive growth since the start of the year:
Maximal extractable value (MEV) is a hidden economic force that is growing. It can lead to both positive and negative outcomes for network participants and remains as one of the most misunderstood topics in crypto.
In this webinar we aim to shed light onto MEV by exploring how it happens on-chain and its effects. We evaluate the size of the MEV market and analyze ways how it is likely to evolve as it matures.
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