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DeFi explodes with bitcoin (BTC)

DeFi explodes with bitcoin (BTC)

Here is our Wednesday BTC / USD analysis. On the menu: the report on a chain of GlassNode and the explosion of DeFi. Close up of Celsius berezina.

Weekly Report Summary on a chain and GlassNode

GN points out in the introduction that an abundance of metrics suggests that “The market has entered the deepest stage of this bear cycle”. “Even long-term holders are now showing significant unrealized losses.”

The first graph highlighted in the report is the graph of the Realized Price. That is, the average price at which each BTC was last traded. This price (currently $ 23,430) is rarely reached and indicates that we are moving closer to the end of the bear market.

March 2020 and the end of 2018 were the last scenarios in which the overall market showed unrealized losses:

Bitcoin: Realized price
Orange curve: Average price at which each BTC was traded last time

The IS “Holders” continue to accumulate BTC against all odds, happy to be able to get their hands on sats at a discount. GN notes, however, that they have reduced their shopping over the past few days, which may be sniffing that the DeFi explosion will provide them with better buying opportunities soon.

The monthly accumulated rate of BTC on addresses not used to sell BTC in fact fell by 64% (between 15,000 and 20,000 BTC per month). A wise decision since bitcoin has just fallen 25% in a few days.

The following graph is very interesting. It helps to know who is causing the BTC decline. You can compare the evolution of bitcoin price by the types of addresses sold by whether it is between 0 and 1 BTC, 1 BTC and 10 BTC, 10 BTC and 100 BTC, etc.

We note that the May blow was primarily the work of whales with more than 10,000 BTC (Zone A on the graph).

Since the shrimp (<1BTC) accumulates very consistent (dark blue). More than 20,800 BTC has risen in the latter since the May 9 Luna Crash. And more than 96,000 BTC from the height of November.

In other words, the plebs take advantage of these BTCs for sale. The IS whales but we are already back now that we have dropped about $ 25,000 for bitcoin alone.

Bitcoin: accumulated trend score by cohort
Red: the cohort in question (left scale) is selling BTC
Blue: the cohort in question is BTC accumulation

According to @WatcherGuru, 265,770 cryptocurrency traders were under liquidity on Monday alone. Or 1.26 billion dollars that changed hands. The moral of the story: never buy bitcoin with leverage. The whales know where the stop losses

The Glassnode report contains many more graphs of analysis on a chain if you want to dive into it. Here is the conclusion:

“Bitcoin has entered a phase that coincides with the deepest and darkest down cycles in the history of bitcoin. Prices hardly stay above the Realized Price. Historically, this phase took anywhere from 8 to 24 months to reach the final bottom market. »

GN does not rule out the possibility of our current fall below $ 20,000…

Where does the bread come from?

Market capitalization of all currencies (stable tires including) a drop of almost 50% since peaking at 2921 billion last November. Excluding bitcoin, the decline is worse: 70%…

So the dominance of bitcoin, which is approaching 50% of the market, and the head of Ethereum has fallen to about 15%. Ethereum is now worth just over 0.05 BTC, compared to almost 0.09 last December.

Involved, the explosion on the coin stable Luna and the explosion on DeFi are just a huge ponzi as NYDIG brilliantly explained.

The panic spread to Celsius Network which offered a fixed annual return to those who lodged ETH with them. the famous “APY” (Annual Percentage Yield). The recommended rate was 6-8% per year on average. 17% in some cases…

Celsius add
“Deposit for cryptocurrencies. Borrowing money. Earning interest rates. »

Celsius ETH added its clients to Lido, a firm responsible for blocking ETH on the beacon chain of Ethereum 2.0, a network that will be merged “soon” with the Ethereum mainnet as part of its transition to Proof of Bet.

The reason for Lido is that it takes a whopping 32 ETH to create node on Ethereum 2.0. This company allows you to be part of an ETH node by contributing only a fraction of the 32 ETH. While waiting for D-Day, its customers receive a token called stETH (Staking ETH) in exchange for ETH.

We can read on the site that “The price of ‘stETH’ per ETH should be volatile until the beginning of phase 2 [du processus de mue d’Ethereum en PoS] ». In fact, these ETHs stored at Lido are blocked until D-Day (“the merger”) which is starting to be late …

The problem is that the collapse of the cryptocurrency market is forcing many people to try to resell their ETH added to Celsius, and the latter cannot return them since they are blocked at Lido.

Last week, the Celsius team tried to reassure customers that they will be able to meet their obligations: “We have enough reserves (and more than enough ETH) to meet our obligations”. These fine words are probably not enough to convince the rumors that Celsius lost a lot of money in the Terra-Luna crash (which gave a ponzian yield of 19.5% through the Anchor protocol).

The inevitable happened. Celsius has just suspended ETH withdrawals until further notice. But then, where is the money?

Celsius would currently hold the equivalent of $ 475 million in steETH. Maker Protocol, the firm behind it, is believed to have another four hundred million coin stable algorithmic (Dai) who may soon experience the same fate as Terra-Luna.

Clearly, Celsius is facing a liquidity crisis. The fact that she has just hired lawyers suggests that liquidation is present. The veil is lifted on DeFi and we get “out” in pain that is just a huge ponzi blessed by influencers scammers that we will have to stop following.

The only worthwhile DeFi is known as Bitcoin. Everything else will end at 0. Here is the opinion of Bryan Brook, former CLO of Coinbase:

“There are many projects to go to 0…. the scams, the charlatans promising easy money, all these people will be gone in the next 6 months, and you are starting to see it now, ”

And as if that were not enough, a class action lawsuit has been filed against the US branch of Binance for its involvement in the Terra-Luna project. Its CEO Changpeng Zhao should soon have to deal with the SEC…

The purge is violent. We learn this Wednesday that the Singaporean fund Three Arrows Capital (3AC) would be hit by a margin call. The fund was managing $ 20 billion of assets at the end of 2021…exchange Coinbase has just announced that it will part with 18% of its payroll. It will be 20% for BlockFi.

Let’s end with a hammering, if this massacre is rubbed on bitcoin, it is indeed the one who will be saved from its ashes by eventually pulling up the stolen money through numerous projects without a tail or a head. However, we will have to take our troubles patiently. Especially since the Fed will raise its prime rate tonight. Probably 0.50%. Even 0.75%…

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Nicolas Teterel

Journalist reporting on the Bitcoin revolution. My papers deal with bitcoin through geopolitical, economic and libertarian prisms.

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