This week's market data observation: May 19 to the dark hour.

This week, we ushered in the "darkest moment" in this bull market. With the joint efforts of multiple parties, the liquidity of the digital asset market has not been significantly affected. There was indeed panic in the market. Fortunately, this market did not trigger "widespread panic". It is still too early to say that the bull market is over. However, the high-risk situation in the digital asset market in recent days may continue, and it will take time for market confidence to recover.

As of 11:00 on May 21, the historical volatility of the Bitcoin perpetual contract in the digital asset market has risen to a high of 181.3, while the historical volatility of Ethereum has reached an "appalling" 252.86, which is comparable to the historical volatility of the spot index price. A clear separation has occurred, which is rare in the history of digital assets.

Ethereum spot index price and historical volatility of perpetual contracts, source: gvol.io

Although the current market has stabilized from the short-term panic, as of 14:00 on May 21, the price of Bitcoin stabilized at around US$40,000 after falling to US$29,000, and Ethereum also successfully stabilized at around US$2,500 , but a large number of contract liquidation, selling pressure caused by panic selling, DeFi serial liquidation and other information still make investors feel lingering. Even the "industry big V" Justin Sun is only one step away from the liquidation of 600,000 ETH positions; It can be said that May 19 is the "darkest moment" in this bull market in the digital asset market.

CME BTC futures formed a gap of "31745-31760 US dollars" this week: At 06:00 on July 19th, Beijing time, CME BTC futures gapped and opened higher. The opening price of the 15-minute cycle was reported at 31760 US dollars. US dollar, forming a gap of 15 US dollars, gap range: 31745-31760 US dollars. [2021/7/19 1:01:29]

Bitcoin price changes in the past 90 days, as of 0:00 on May 20, 2021, source: tokeninsight.com

Starting from May 18, TokenInsight has closely tracked the changes in various market data. Is the bull market over? What factors triggered the sudden panic and plunge in the market? We found some clues through various data indicators.

Is there widespread panic in the markets?

There was indeed panic in the market, but this market did not trigger "widespread panic."

TrustBase will officially launch TBE POOL this week: According to official news, TrustBase will officially launch TBE POOL this week. In the first round, three mining pools will be opened, with a total of 2.3 million TBE, with daily block output and a mining cycle of 30 days.

In addition, TrustBase continues to support the development of the Subscript language, and continues to add valuable technical structures to the TrustBase ecosystem. At present, the first batch of project docking is already in progress, and all project tokens participating in the TrustBase ecology may be obtained by staking TBE. Holding TBE will become a production capacity effect in the Polkadot ecology in the future. [2021/5/17 22:11:26]

As an important gathering place for speculators in the digital asset market, perpetual contracts often reflect the mood swings of speculators in their market performance. From the perspective of trading volume, the market trading volume is basically equivalent to the large-scale fluctuations at the end of February: Taking Bitcoin as an example, the trading volume of perpetual contracts in the market on February 23 and 24 reached more than 370 billion U.S. dollars. At around $320 billion, it is not the highest this year. The possible reason is that the market has already established downward expectations in the long-term sideways market, so in this decline, the scale of panic selling is relatively limited, and the greater possibility of driving up the trading volume is the liquidation caused by the liquidation of the contract.

Of course, the sell-off is not non-existent: as of 15:00 on May 21, the open interest of Bitcoin perpetual contracts fell to 15.6 billion US dollars, a decrease of 29.54% compared with last week, slightly higher than the weekly price fluctuation of about 21%. This shows that some investors chose to close their positions in a highly volatile market, but overall, the decline in market positions was not large and did not meet the standard of "causing a significant impact".

Analysis | The money laundering process of Upbit’s stolen ETH continued to be active-zce this week: Beijing’s Chainsmap monitoring system found that the money laundering process of Upbit’s stolen ETH continued to be active-zce this week after being relatively quiet for nearly two weeks. Previously, on December 25, 2019, Beijing time, the active-zce money laundering core addresses beginning with 84f4 suspended activities, and other addresses where stolen ETH was concentrated were relatively quiet.

Starting around this Sunday, several batches of ETH concentrated on the fourth layer of Upbit’s stolen ETH money laundering path began to transfer frequently again, involving more than 25,000 ETH. According to observations in recent days, its strategy no longer focuses on one address as a money laundering collection address, but after three to four transfers, it gathers at several money laundering center addresses, and then transfers in units of several to dozens of coins to several exchanges.

According to data analyst SXWK, the money laundering strategy of Upbit’s stolen ETH has been adjusted. This time, the strategy has not carried out operations such as exchanging stable coins on decentralized exchanges, but more emphasis on the relative decentralization of centralized processing (centralized More addresses are processed), efficiency (usually the ETH collected by a batch of addresses is processed within two days), overall, money laundering is still processing each batch of ETH at the fourth level one by one. [2020/1/9]

News | Huobi Weekly Report: The total market value of blockchain assets this week has dropped by 15.08% compared to last week: Huobi Blockchain Industry Weekly (70th issue) is released. The report shows that the total market value of blockchain assets this week is lower than last week It fell by 15.08%, and the market value of 85 projects in the TOP100 projects fell to varying degrees. This week, the computing power of Bitcoin and Ethereum increased month-on-month, and the difficulty of mining Bitcoin and Ethereum increased month-on-month; the average number of transactions and the average block size of Bitcoin blocks increased this week, and the average number of transactions and The average size decreased; Bitcoin miner fees fell this week, and Ethereum miner fees increased; INS became the project with the most active-zce code. [2019/7/16]

Changes in Bitcoin contract trading volume in the past 90 days, as of 15:00 on May 21, source: tokeninsight.com

On the other hand, the amount of liquidation confirms the view of "limited panic". Before the large-scale liquidation on May 19, the scale of liquidation caused by the sharp drop on April 17 was actually relatively large: Bitcoin fell from around $62,000 to around $55,000 on that day, and the total liquidation volume of both long and short sides exceeded 100 One hundred million U.S. dollars. At this time, the decline expectation has been established; there will be a callback in the middle of the year, and the market has a consensus. Due to the early release of pressure, the liquidation volume on May 19 was less than US$8.6 billion, which to a large extent avoided the liquidity crisis caused by excessive market liquidation and further chain reactions.

Bitcoin futures closed up slightly on Friday but fell more than 15% overall this week: Financial Associated Press, January 13, CME Bitcoin futures BTC February contract closed up $560, or 4.187%, at $13,945, but the It fell 15.94% on a weekly basis. The CBOE Bitcoin futures XBT February contract closed up $480, or 3.6%, at $13,800, but fell 17.73% this week. The net short position in CBOE bitcoin futures increased by 219 contracts to 1,907 contracts. [2018/1/13]

Changes in the daily liquidation amount of perpetual contracts in the market in the past 90 days, source: bybt.com

In terms of the spot market, on May 19 there was the second trading peak since early January: the day after the price fell, the trading volume of Bitcoin reached 45.64 billion U.S. dollars, and the spot trading volume of tokens in the whole market reached 232.3 billion U.S. dollars. It seemed like there was a sell-off; but it wasn't. While a large number of retail investors chose to sell digital assets, a large number of European and American investment institutions and retail investors who intended to "buy the bottom" chose to buy at low prices. A certain impact: Both Binance and Coinbase experienced varying degrees of transaction congestion and downtime due to excessive transaction data processing and liquidation. However, with the joint efforts of liquidity providers, market makers, quantitative hedge funds, exchanges, and even individual investors, the liquidity of the digital asset market has not been significantly affected.

Changes in the trading volume of the digital asset spot market in the past 90 days, source: tokeninsight.com

From the perspective of capital inflow/outflow, after the 19th, funds in mainstream digital asset markets such as Bitcoin and Ethereum are actually in a state of net inflow. Within 24 hours, the net inflow of funds in the Bitcoin market reached 250 million US dollars, and that of Ethereum reached 330 million US dollars. On the whole, the net outflow of Bitcoin funds in the past month, the trend of net inflow of high-yield digital asset markets such as Ethereum has not changed, and the market value of Bitcoin still remains at a low level below 45%.

Net inflow/outflow of Bitcoin and Ethereum funds in the past 30 days, source: tokeninsight.com

Who is FOMO?

The inflow and outflow of funds in different exchanges within 24 hours also revealed the regional nature of panic and selling. On Binance, Huobi, OKEx and other exchanges, the Bitcoin market is in a state of net outflow or "close to net outflow"; the sell-off is mainly based on small amounts of Bitcoin, and in the Binance exchange, large transactions also show net outflows. Outflow phenomenon; a large number of users in the three exchanges come from East Asia, and users from East Asia in Huobi and OKEx exchanges account for the majority.

Fund flow changes in the Bitcoin market on Binance, Huobi, and OKEx exchanges in the past 24 hours, source: tokeninsight.com

On the contrary, on Coinbase, FTX, and Bitstamp exchanges where European and American investors are concentrated, investors regardless of size are actively buying Bitcoin, and the net inflow of funds is very obvious. In terms of the Ethereum market, except for Binance, most mainstream exchanges have shown a clear trend of capital inflows. The same is true from the data of the past 30 days.

The above information shows that the selling and selling pressure in the Bitcoin market is likely to come from East Asia, and the impact on Ethereum is relatively small. There has been a change in the bitcoin market. What happened in East Asia?

Fund flow changes in the Bitcoin market on Coinbase, FTX, and Bitstamp exchanges in the past 24 hours, source: tokeninsight.com

Bitcoin market outflows from major exchanges in East Asia in the past 30 days/Bitcoin market capital inflows from major exchanges in Europe and America, source: tokeninsight.com

After Darkness: Markets Remain in High-Risk Phase

It is true that on May 19, the digital asset market as a whole was not severely hit. However, as the Fed considers stopping QE, clear interest rate hike expectations, high inflation and other factors, the funds flowing into the digital asset market may gradually flow out in the future, and even burst the bubble and end the bull market under the influence of some major events. It's still too early for the bull market to end.

However, the current volatility gap continues to be positive and has expanded, indicating that the high volatility and downward trend are still in the process; considering the predictive effect of the volatility gap on market performance, the high-risk situation of the digital asset market in recent days Probably will continue. It will take time for market confidence to recover; judging from the expectations of professional investors, it may take longer than expected for the market to return to the normal level during the bull market (a market value of more than US$2 trillion). Risk expectation and control will become the core theme of investors in recent days and even weeks.

Recent historical volatility and implied volatility performance of Ethereum options, source: gvol.io

END.

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