Sebastian Sinclair

A shift away from quantitative tightening and a fresh expansion of the US Federal Reserve’s balance sheet has industry majors bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) and ether (<a href="https://blockworks.co/price/eth">ETH</a>) riding high.



Both assets are now up 69% and 49.5% on a year-to-date basis to around $28,000 and $1,800&nbsp; respectively, <a href="https://www.blockworksresearch.com/assets">Blockworks Research data</a> shows. In just the past couple weeks, they have rallied some 35% and 26% on the back of Silicon Valley Bank’s <a href="https://blockworks.co/news/bitcoin-momentum-store-of-value-banking-turmoil" target="_blank" rel="noreferrer noopener">historic failure</a>.



The crypto market performance is now vastly outstripping tech and growth stocks listed on the Nasdaq exchange by more than five times over the same period.



“Crypto, at a macro level, trades on the perceived fundamentals of the money supply outlook more so even than pure market beta,” Rich Falk-Wallace, CEO of data analytics firm Arcana told Blockworks. “As the money supply picture has changed overnight, so have crypto sector asset prices.”



Last year’s regime of quantitative tightening was a more significant factor affecting prices than the demise of many centralized crypto firms, digital asset trading firm Cumberland said via <a href="https://twitter.com/CumberlandSays/status/1638202345346531330?s=20" target="_blank" rel="noreferrer noopener">social media</a> on Tuesday.



<a href="https://blockworks.co/tag/ethereum-merge">Ethereum’s Merge</a> and Russia’s war in <a href="https://blockworks.co/tag/ukraine">Ukraine</a> were of lesser consequence for price, the firm said.



<h2>Bank liquidity driving bitcoin adoption</h2>



Now, as the Fed has taken swift action to prop up the US banking sector through its newly created Bank Term Funding Program in a step designed to “safeguard deposits,” investors are seeking out alternatives.



The central bank is weighing whether to hike rates further as it attempts to wrestle with inflation, though, amid the backdrop of liquidity provisions for banks, that is proving somewhat difficult.



Markets are now pricing in a 25 basis point jump instead of the previously conceived 50, to be decided at the next upcoming FOMC meeting on Wednesday, according to CME Group’s <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html" target="_blank" rel="noreferrer noopener">FedWatch tool</a>.&nbsp;



The easing of further rate hikes would be the first time the Fed has made such a move since it began its aggressive campaign in March of last year.



Sunday also saw the <a href="https://www.bbc.com/news/business-65010255" target="_blank" rel="noreferrer noopener">announcement</a> from central banks around the world to bolster liquidity provisions in US dollars as they sought to soothe the crisis of confidence in the global financial system.



“None of this is exactly quantitative easing the way we’re used to it, but it’s clear that quantitative tightening is not just ending but headed in the other direction,” Cumberland <a href="https://twitter.com/CumberlandSays/status/1638202348936871940?s=20" target="_blank" rel="noreferrer noopener">tweeted</a>.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/13155519/embed#?secret=kF71i4J3O8" data-secret="kF71i4J3O8" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Bitcoin and ether are easily outperforming major indexes so far this year</figcaption></figure>



Whatever you term it, the actions are translating to further upside for digital assets, Glassnode said in its weekly <a href="https://www.youtube.com/watch?v=5tH_66pz0Us&amp;ab_channel=glassnode" target="_blank" rel="noreferrer noopener">video report</a>, Tuesday.



Exploring the underlying strength of the trend, Glassnode pointed to several on-chain activity metrics in an attempt to analyze the fundamentals backing the rally.



Looking at the transaction counts, new addresses and new entities for bitcoin over a monthly basis versus its yearly average performance, Glassnode said the data was showing a “very healthy uptick.”



“Bitcoin has seen one of the most explosive weekly rallies in history,” Glassnode wrote in a slide at the end of its presentation. While there were some signs of profit-taking at play, it remains “relatively light” with respect to older coins, hinting at a strong conviction to the upside, it said.



Cumberland agrees: “The flow we are seeing on the OTC desk is reflecting the new reality. It has been extremely focused in BTC and ETH, and we’re seeing very little profit-taking, despite the fact that BTC is up 70% on the year; our flow ratio right now shows roughly twice as many buyers as sellers.”



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Bitcoin Price Rally Aligns With ‘Healthy Uptick’ in On-chain Metrics

Bitcoin enthusiasts come into this week with uncertain prospects as the crypto struggles to break through psychologically significant realized price levels. The market continues to reject bitcoin&#8217;s ascent, putting pressure on investors to reassess their positions.



The rejection has been felt by both older hands from the 2021-22 cycle and the ever-elusive whale cohort. The result? A significant dip in bitcoin&#8217;s value this month, dropping from its high of $24,000 beginning March 1 to a low of about $22,000.



Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) remains up by about 33% since the new year began, <a href="https://www.blockworksresearch.com/">Blockworks Research</a> data shows.



“While the market has rebounded strongly since January 2023, sustaining a $1 trillion in total market cap thus far, industry metrics have only seen small improvements,” Zhong Yang Chan, head of research at CoinGecko told Blockworks.



According to data provider <a href="https://insights.glassnode.com/the-week-onchain-week-10-2023/?utm_campaign=woc_10_2023&amp;utm_medium=woc_newsletter&amp;utm_source=email" target="_blank" rel="noreferrer noopener">Glassnode</a>, bitcoin&#8217;s spot price was turned away from levels that coincide with those holders in the Old Supply Realized Price camp. Many of these older coins are held by buyers from the 2021-22 cycle, who are now experiencing a loss of about 6% in their position at $23,500.



The Realized Price, or cost basis estimate, indicates spot prices are being turned away from levels that coincide with the acquisition cost of these older coin holders. Some investors took the chance to sell their BTC a breakeven, leading to a subsequent decline in the value of bitcoin.



Still, the decrease remains low by historical standards, which is somewhat reassuring to investors, Glassnode said. And while the market is in a transitional phase resembling the later stages of a bear market, there are signs of hope.



The <a href="https://blockworks.co/news/bitcoin-bottom-november-on-chain-metrics">Net Unrealized Profit and Loss metric</a> has shifted from a state of net unrealized loss to a positive mark since mid-January. That means the average bitcoin holder is now sitting on a profit of around 15% of the entire market capitalization.



Transfer volume, which fluctuates with the aggregate level of capital in the market, has also increased by 79% since early January. This growth suggests the market is attracting new investors, which could help stabilize current prices, Glassnode said.



A look at the 14-day average <a href="https://academy.glassnode.com/indicators/sopr/asopr-adjusted-sopr" target="_blank" rel="noreferrer noopener">aSOPR</a> metric, which is used to analyze the average profit or loss realized by those who transact in the market, also offers some signs of short-term reprieve. 



The aSOPR metric has been trading above a value of 1.0 for 40 consecutive days, hinting at a sustained period of profit-taking, the first such period since March 2022.&nbsp;



A silver lining, though, is it also suggests a significant return of capital flowing into the market — enough to offset the profits taken so far, Glassnode said. This phenomenon is typical after a market has recovered from a period of extended losses.



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Bitcoin Price Retreats as Rejection at $23.5K Continues

Hopeful signs are emerging for the crypto industry mid-term as on-chain metrics for bitcoin suggest the world&#8217;s largest digital asset by market value may have hit its bottom in late 2022.



Those include the Market Value to Realized Value Ratio (MVRV) and the Net Unrealized Profit and Loss metric (NUPL), both of which flashed a trend reversal following FTX’s collapse in November.



The rally in digital assets, represented by the price increase in bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>), as well as ether (<a href="https://blockworks.co/price/eth">ETH</a>) this year, is reinforcing that play. Both assets are up 35% and 30% on a year-to-date basis trading at $22,450 and $1,550 respectively, <a href="https://www.blockworksresearch.com/">Blockworks Research</a> data shows.



Data provided by <a href="https://cryptoquant.com/analytics/dashboard/63c8250eeb627670dae2c573" target="_blank" rel="noreferrer noopener">CryptoQuant</a> shows MVRV hit its lowest point on Nov. 9, right around the time revelations came to light that FTX had allegedly misappropriated user funds, at a reading of 0.75.



The MVRV ratio is a metric used to determine whether an asset, in this case, bitcoin, is undervalued or overvalued.&nbsp;



When the ratio is above 3.7, bitcoin is said to be overvalued and may be at a market top. Conversely, when the reading is below 1, the asset is considered undervalued and may be at a market bottom.&nbsp;



The last time the MVRV ratio was around as its November print was way back on Dec. 15, 2018, when the price of one bitcoin traded at $3,200. Despite a relatively uneventful year for price action in 2019, bitcoin never dipped below its 2018 lows.



NUPL, a metric used to measure the average profit margin of all bitcoin holders, began to flash similar signs around the same time.



Like the MVRV ratio, the NUPL can indicate whether bitcoin is undervalued or overvalued. Historically, NUPL levels above 0.7 (70% average profit margin) have signaled market tops, while levels below -0.4 (-40% profit margin) have signaled market bottoms.



The NUPL reading for bitcoin reached a low of -0.3 in November at a price of $15,800 and has held a positive reading since the middle of January. The NUPL is currently trending at 0.1 after crossing a 365-day moving average threshold, signaling bitcoin may have commenced a new upward cycle.



It’s important to note that although there are indications of a potential “crypto spring,” <a href="https://blockworks.co/news/despite-signs-of-crypto-spring-analysts-say-too-early-to-call">analysts cautioned</a> at the end of February that it is still premature to declare at this point.



They warned against the lingering presence of ongoing inflation, the possibility of future rate hikes and wider macroeconomic uncertainty which may cause further downward momentum.



Previous price history is also telling. While it&#8217;s entirely plausible a mean reversion following the November drawdown is well underway, a daily close below about $21,400 — the most recent nadir on Feb. 13, could hint at further pain.



Cryptoassets can fall considerably further and still maintain the current uptrend on macro timeframes, even if the late November low holds. But the total drawdown in the bitcoin price from its November 2021 peak to November 2022 trough, of about 77% is broadly similar to prior cycles in Bitcoin’s history.



<h3>L2’s a better indicator than the majors?</h3>



Some like Rich Falk-Wallace, CEO of crypto data analytics platform Arcana suggest that on-chain activity is a better indicator of price for <a href="https://www.linkedin.com/posts/rich-falk-wallace_bitcoin-and-ethereum-active-address-growth-activity-7016746416387555328-sd70/" target="_blank" rel="noreferrer noopener">less utilized blockchains</a> than for those fully utilized like bitcoin and ether.



“For alternative coins and layer-2s, we&#8217;ve seen 90%+ mid-term correlations between daily active users and prices,” he said. “But for bitcoin and ether, both chains hit full capacity around 2018, which means user numbers have essentially been static since that time.”



Hitting capacity for bitcoin and ether refers to the point where they reached their effective block capacity limits, beyond which the fees grow exponentially to restrict further demand for block space.&nbsp;



This results in a gradual increase in daily active addresses since there are restrictions on address growth. Falk-Wallace further explained that the incremental increase in value for these chains must come from a rise in value per active address instead of an increase in users.



That means there exists a “strong relationship” between daily active users and prices for alternative coins and layer-2s, where an increase in daily active users on those chains is highly correlated with an increase in bitcoin’s price, over a medium-term period.



“If you look at dollar value transferred on-chain, the metric is well correlated to BTC’s price historically. And that bottomed — and has languished — since November,” Falk-Wallace said.



That means, even if the bottom is in, investors may be in for a period of relative boredom.



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Did Bitcoin Bottom in November? These Metrics Suggest So.

Binance’s stablecoin (BUSD) is barely treading water.



After stablecoin issuer Paxos was directed by the New York Department of Financial Services to cease minting fresh BUSD <a href="https://blockworks.co/news/paxos-to-cease-minting-new-busd-and-end-relationship-with-binance">last month</a>, the asset has begun to exhibit signs of decay.



According to other on-chain metrics, the risk of capital flight from the world’s third-largest stablecoin project now appears greater than ever before.



Dmitry Lapidus from crypto-native investment fund Dragonfly told Blockworks that over the past few months, several individuals have begun to investigate the mechanics of BUSD after observing discrepancies in on-chain data.



Data from Glassnode shows the seven-day moving average of <a href="https://studio.glassnode.com/metrics?a=BUSD&amp;m=addresses.ActiveCount&amp;mAvg=7" target="_blank" rel="noreferrer noopener">active addresses</a> for BUSD has hit a four-month low of 96.3. The number of sending addresses has also breached a four-month low of 53.7.&nbsp;



Assets held on Binance and pairs quoted in BUSD, or assets traded in the Binance ecosystem will likely be subject to industry-wide de-risking.



Data now points to falling activity which, coupled with <a href="https://studio.glassnode.com/metrics?a=BUSD&amp;m=addresses.ReceivingCount&amp;mAvg=7" target="_blank" rel="noreferrer noopener">declining receiver addresses</a> and a market cap in freefall, could spell doom for the nascent project. Following the SEC probe, the circulating supply of BUSD has decreased by 37%.



“This likely signals the end of BUSD as we know it, given Binance was recently offloaded by its last US on/off-ramp bank in the past few weeks,” Lapidus added in relation to <a href="https://blockworks.co/news/signature-bank-limit-on-swift-transactions-with-binance-affects-few-users">Signature Bank</a>.



Adding to regulatory pressure, the Securities and Exchange Commission (SEC) issued Paxos a Wells Notice — an alert for potential SEC enforcement action — at roughly the same time.&nbsp;



The regulator believes BUSD constitutes a security and is therefore in violation of federal laws based on yield generated from users staking via its Earn program at 2.86%.



Both instances have raised concerns from onlookers about the way policing of crypto appears to be coming from “regulating by litigation” rather than through remedial discourse.



“It is curious why the SEC chose to target the stablecoin issuer, Paxos and not Binance,” Ivan Hong, content lead of crypto payroll firm Request Finance told Blockworks.



Coinbase was <a href="https://blockworks.co/news/coinbase-hits-back-at-sec-over-staking-as-a-service">previously served</a> a similar notice by the SEC for offering to provide a yield service for USDC, but Circle, the issuer of the stablecoin, was not. CEO <a href="https://www.bloomberg.com/news/articles/2023-03-01/coinbase-s-coin-armstrong-says-staking-product-isn-t-a-security" target="_blank" rel="noreferrer noopener">Brian Armstrong </a>defended the exchange’s staking product on Wednesday saying it should not be classified as a security.



<h2>Trouble for BNB Chain</h2>



Two different &#8220;BUSD&#8221; products are available to users. The first is a regulated stablecoin issued by Paxos that is backed by fiat and subject to regulatory oversight.&nbsp;



Paxos has been responsible for the creation and redemption of BUSD, since 2019, operating on the Ethereum blockchain through a licensing agreement with Binance. That agreement will come to a close in February 2023.



The second is an unregulated stablecoin called Binance-Peg BUSD, which is independently minted by Binance on other blockchains and pegged to BUSD on a one-to-one basis, allowing for token swapping across various blockchains.



The issuer will enable its new and current customers to either exchange their Ethereum-based BUSD tokens for Pax Dollars or redeem their funds in fiat. It appears that the message has not been lost on market participants.



“It became clear that the non-ETH BUSD was at multiple times undercollateralized, something that Binance eventually was forced to admit and blamed on a ‘timing mismatch,’” Lapidus said.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">The damage NYDFS and the SEC have done to BUSD is really staggering In the past 30 days just over $6 billion <a href="https://twitter.com/search?q=%24BUSD&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BUSD</a> has been burned &#8212; equivalent of a top 20 cryptocurrency by marketcap simply disappearing Still $11 billy BUSD in circulation, $9.7 billy of which is on Binance <a href="https://t.co/aMTiGLkxt1">pic.twitter.com/aMTiGLkxt1</a>&mdash; Andrew T (@Blockanalia) <a href="https://twitter.com/Blockanalia/status/1630274434337579008?ref_src=twsrc%5Etfw">February 27, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Andrew Thurman, a Nansen researcher, told Blockworks both the Binance exchange and its BNB chain need to pivot to a new stable asset pegged 1:1 to the US dollar.



Many of the primary liquidity pools on Binance Smart Chain are dominated by BUSD. In contrast, the disappearance of BUSD on Ethereum will have a limited impact on DeFi, with just $11 million in Aave, for example.



On the other hand, on Binance’s own network, BNB Chain, a complete ecosystem will need to adjust to an alternative liquidity source, Thurman said.



“It’s never happened in crypto and I don&#8217;t know quite what it will look like,” he said.



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The End of BUSD? On-Chain Metrics Paint a Bleak Picture

Sam Martin

<div id="highlights-block_617725d07bf3f" class="highlights">
 <ul>
 <li>SOL is down 40% from all-time highs despite strong activity on-chain</li>
 <li>The ETH/BTC ratio slides as investors seek safety in the king of digital assets</li>
 </ul>
 
</div>



SOL is trading near $160, down nearly 40% from its all-time high seen on Nov. 6, 2021.



Data from Chaincrunch shows that on-chain activity on Solana remains strong.



80.78% of the SOL supply is held in only 173 wallets, according to data from Chaincrunch.



The ETH/BTC ratio has slid more than 7% this week as investors seek safety in BTC in a risk-off environment. 



OpenSea volume has picked back up since the beginning of December after a down month in November.



<h3>Latest in Macro:</h3>



<ul><li>S&amp;P 500: 4,634, -0.75%</li><li>NASDAQ: 15,237, -1.14%</li><li>Gold: $1,773, -0.78%</li><li>WTI Crude Oil: $70.65, -0.90%</li><li>10-Year Treasury: 1.443%, +0.019%</li></ul>



<h3>Latest in Crypto:</h3>



<ul><li>BTC: $48,364, +1.50%</li><li>ETH: $3,872, +0.80%</li><li>ETH/BTC: 0.0797, -1.61%</li><li>BTC.D: 41.95%, +0.14%</li></ul>



<h3>Solana user growth</h3>



Solana (SOL), the fifth-largest cryptocurrency in the digital asset space with a market cap of roughly $47 billion, is down approximately 40% from its all-time high of <a href="https://coinmarketcap.com/currencies/solana/" target="_blank" rel="noreferrer noopener">$258.93 seen on Nov. 6, 2021</a>. It is currently trading at $154, according to data from <a href="https://coinmarketcap.com/currencies/solana/" target="_blank" rel="noreferrer noopener">CoinMarketCap</a>.



Founded in 2017 by Anatoly Yakovenko, <a href="https://medium.com/solana-labs/proof-of-history-a-clock-for-blockchain-cf47a61a9274" target="_blank" rel="noreferrer noopener">Solana aims</a> to support all high-growth and high-frequency blockchain applications and to democratize the world’s antiquated financial systems. This means challenging some of the largest traditional financial institutions in the world.



While the SOL price has suffered over the past six weeks, activity on the layer-1 chain remains robust. 



According to data compiled by <a href="https://dashboard.chaincrunch.cc/public/dashboard/cc7a0d94-7f70-46f4-aae4-2f8810430931#theme=night" target="_blank" rel="noreferrer noopener">Chaincrunch</a>, the number of transactions, unique wallets, and transaction fees all hover near all-time highs despite the dip in SOL&#8217;s price. The fees to transact on Solana are less than a penny per transaction, which is likely the driving force behind the chains rapid adoption.



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="537" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.01.11-PM-1024x537.png" alt="" class="wp-image-12610" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.01.11-PM-1024x537.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.01.11-PM-1024x537.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.01.11-PM-1024x537.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.01.11-PM-1024x537.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.01.11-PM-1024x537.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.01.11-PM-1024x537.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.01.11-PM-1024x537.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.01.11-PM-1024x537.png?w=1418 1418w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Chaincrunch</figcaption></figure></div>



<h3>Common Solana critiques</h3>



Solana naysayers often point to the lack of decentralization and high concentration of wealth amongst top SOL holders.



Data from <a href="https://solanabeach.io/supply" target="_blank" rel="noreferrer noopener">Solana Beach</a> confirms the latter statement, stating that 80.78% of the supply is held in only 173 wallets. The distribution can be seen in the following pie chart breaking down the percentage of supply held by the top 10, top 50, top 100 and remaining wallets:



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="245" height="288" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.12.34-PM.png" alt="" class="wp-image-12611" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.12.34-PM.png?w=245 245w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.12.34-PM.png?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.12.34-PM.png?w=222 222w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.12.34-PM.png?w=186 186w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.12.34-PM.png?w=68 68w" sizes="(max-width: 245px) 100vw, 245px" /><figcaption>Source: solanabeach.io</figcaption></figure></div>



The former critique which points to the concentration of validators, or registered participants, that can create new blocks to add to the chain. 



Last month, I <a href="https://cms.blockworks.co/sol-flips-usdt-in-market-cap-axie-infinity-ronin-dex-goes-live-markets-wrap/" target="_blank" rel="noreferrer noopener">reported</a> that there are currently 1150 Solana validators, and the cost to set one up is north of <a href="https://www.reddit.com/r/solana/comments/lrjr6l/validator_node_economics/" target="_blank" rel="noreferrer noopener">$5,000.</a> For comparison, there are well over 12,000 nodes on the bitcoin network who are visible and it costs less than $200 to set up a BTC node. It is worth noting that the actual node count for the Bitcoin network is likely much higher but is not traceable.



After checking back in today on the number of validators, this number has risen to over 1,300. That is 13% growth in validator count in six weeks time, according to data from <a href="https://solanabeach.io" target="_blank" rel="noreferrer noopener">Solana Beach</a>. 



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="846" height="440" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.20.01-PM.png" alt="" class="wp-image-12612" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.20.01-PM.png?w=846 846w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.20.01-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.20.01-PM.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.20.01-PM.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.20.01-PM.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.20.01-PM.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.20.01-PM.png?w=80 80w" sizes="(max-width: 846px) 100vw, 846px" /><figcaption>Source: solanabeach.io</figcaption></figure></div>



<h3>ETH/BTC note</h3>



The ETH/BTC ratio is a metric to watch for investors who are curious about the performance of the two largest digital assets in relation to each other. When the ratio is going up, it signals that ETH is outperforming BTC.



&#8220;The general view is that while ether is outperforming bitcoin, all is well in the crypto space, with the mood very much risk on given ether’s status as an innovation hub for web3.&#8221; reads a LMAX Digital report. &#8220;But as ether underperforms relative to bitcoin, it suggests the mood has shifted to one in which investors are more comfortable owning bitcoin over ether due to the safe haven, story of value draw of bitcoin.&#8221;



After a rally of 24% up to local highs of .0880, the ETH/BTC ratio has declined 7.19% over the past five days to .0802, according to data from <a href="https://www.tradingview.com/symbols/ETHBTC/" target="_blank" rel="noreferrer noopener">TradingView.</a>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="612" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ETHBTC_2021-12-14_14-28-59-1024x612.png" alt="" class="wp-image-12613" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ETHBTC_2021-12-14_14-28-59-1024x612.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ETHBTC_2021-12-14_14-28-59-1024x612.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ETHBTC_2021-12-14_14-28-59-1024x612.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ETHBTC_2021-12-14_14-28-59-1024x612.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ETHBTC_2021-12-14_14-28-59-1024x612.png?w=437 437w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ETHBTC_2021-12-14_14-28-59-1024x612.png?w=366 366w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ETHBTC_2021-12-14_14-28-59-1024x612.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/ETHBTC_2021-12-14_14-28-59-1024x612.png?w=1153 1153w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Trading View</figcaption></figure></div>



ETH balances on exchanges remain at levels not seen since 2018, implying that investors are looking to hold for the long term. There was a slight uptick over the past few days, according to data from <a href="https://glassnode.com" target="_blank" rel="noreferrer noopener">Glassnode</a>, as some investors have likely taken profits in the face of dicey price action.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_ethereum-percent-balance-on-exchanges-all-exchanges-1024x576.png" alt="" class="wp-image-12614" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_ethereum-percent-balance-on-exchanges-all-exchanges-1024x576.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_ethereum-percent-balance-on-exchanges-all-exchanges-1024x576.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_ethereum-percent-balance-on-exchanges-all-exchanges-1024x576.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_ethereum-percent-balance-on-exchanges-all-exchanges-1024x576.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_ethereum-percent-balance-on-exchanges-all-exchanges-1024x576.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_ethereum-percent-balance-on-exchanges-all-exchanges-1024x576.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_ethereum-percent-balance-on-exchanges-all-exchanges-1024x576.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_ethereum-percent-balance-on-exchanges-all-exchanges-1024x576.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_ethereum-percent-balance-on-exchanges-all-exchanges-1024x576.png?w=1800 1800w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode</figcaption></figure>



<h3>Non-Fungible Tokens (NFTs)</h3>



Last month I <a href="https://cms.blockworks.co/eth-btc-on-the-verge-of-breaking-out-nft-market-may-be-stagnating-markets-wrap/" target="_blank" rel="noreferrer noopener">noted</a> that trading volume on OpenSea looks to be on track for its lowest monthly total since July. While that is, in fact, what occurred, OpenSea volume has since rebounded during the month of December, according to data from <a href="https://dune.xyz/rchen8/opensea" target="_blank" rel="noreferrer noopener">Dune Analytics</a>.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="276" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.34.45-PM-1024x276.png" alt="" class="wp-image-12615" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.34.45-PM-1024x276.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.34.45-PM-1024x276.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.34.45-PM-1024x276.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.34.45-PM-1024x276.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.34.45-PM-1024x276.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.34.45-PM-1024x276.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.34.45-PM-1024x276.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.34.45-PM-1024x276.png?w=1077 1077w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: @rchen8 </figcaption></figure>



Trading data from <a href="https://opensea.io/rankings" target="_blank" rel="noreferrer noopener">OpenSea</a> and <a href="https://solanalysis.com" target="_blank" rel="noreferrer noopener">Solanalysis</a> of some of the top Solana and Ethereum projects can be found below:



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="329" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.39-PM-1024x329.png" alt="" class="wp-image-12616" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.39-PM-1024x329.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.39-PM-1024x329.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.39-PM-1024x329.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.39-PM-1024x329.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.39-PM-1024x329.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.39-PM-1024x329.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.39-PM-1024x329.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.39-PM-1024x329.png?w=1234 1234w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Ethereum Projects</figcaption></figure></div>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="288" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.52-PM-1024x288.png" alt="" class="wp-image-12617" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.52-PM-1024x288.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.52-PM-1024x288.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.52-PM-1024x288.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.52-PM-1024x288.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.52-PM-1024x288.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.52-PM-1024x288.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.52-PM-1024x288.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-14-at-2.40.52-PM-1024x288.png?w=1202 1202w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Solana Projects </figcaption></figure></div>



If you made it this far, thanks for reading! I am looking forward to catching up tomorrow.



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