Sebastian Sinclair


<p>Open interest for <a href="https://blockworks.co/price/btc">bitcoin</a> futures contracts remains near one-month highs as demand for digital assets continues to drive this year&#8217;s unexpected rally.&nbsp;</p>



<p>Bitcoin futures are trading at $23,230 as of 6:30 am ET on the Chicago Mercantile Exchange, recovering from a 3.85% loss on Monday. The asset is now up 40% year-to-date.</p>



<p><a href="https://blockworks.co/tag/open-interest">Open interest</a>, which measures the number of outstanding contracts on the bitcoin futures market, reached a peak of 289,720 last week on the Deribit exchange before dipping to around 260,000, according to published <a href="https://metrics.deribit.com/options/BTC" target="_blank" rel="noreferrer noopener">data</a>.&nbsp;</p>



<p>That was the highest point for the number of outstanding contracts since the end of last year.&nbsp;</p>



<p>Interest in traditional finance and economic data has led to greater anticipation of volatility in digital assets, as seen by the increase in futures market activity and the underlying spot price of bitcoin.&nbsp;</p>



<p>Bullish bets for contracts expiring on Feb. 1 are pointing to a strike price near $23,250, with a put/call ratio of 0.81. Open interest by strike price for contracts expiring on Feb. 3 places bitcoin in the higher range near $24,000, with a put/call ratio of around 0.59, according to Deribit data.</p>



<p>A low put/call ratio below 1 suggests a greater number of call options are being traded relative to put options, which is generally considered a bullish sign as market participants anticipate an upward trend in the underlying asset&#8217;s price.</p>



<p>Open interest by strike price refers to the number of outstanding futures or options contracts not yet settled and written at a certain price level. The data can provide information about trader expectations, as well as the market&#8217;s overall risk tolerance and potential for future price volatility.</p>



<p>If a large concentration of open interest exists at a specific strike price, it may indicate a high level of market risk as many traders are betting on the asset reaching that price level.&nbsp;</p>



<p>While open interest is not a definitive measurement of bull/bear market bias, it can be interpreted as a sign of increased demand for an asset driven by factors such as increased economic activity.</p>



<p>A reading of 0.7 on <a href="https://www.questionpro.com/blog/spearmans-rank-coefficient-of-correlation/" target="_blank" rel="noreferrer noopener">Spearman&#8217;s rank correlation</a> between traditional equities and crypto means digital assets continue to move in tandem and are likely to be impacted by wider macroeconomic events in traditional markets.</p>



<p>The US Federal Reserve is expected to announce a <a href="https://blockworks.co/news/crypto-rally-relies-on-dovish-fed">softer rate hike</a> of 25 basis points on Wednesday, down from previous hikes of 50 and 75 basis points. A number of tech companies with blockchain exposure, including Meta, Google, and Amazon, are also expected to release their quarterly results this week.</p>



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Bitcoin Open Interest at Month-Long High Ahead of FOMC Decision

Sam Martin

<div id="highlights-block_617725d07bf3f" class="highlights">
        <ul>
                <li>Digital assets trade sideways after yesterday&#8217;s sell-off</li>
                <li>Illicit activity makes up .15% of crypto transaction volume</li>
            </ul>
    
</div>



<p>Risk assets sell-off as bond yields rally.</p>



<p>BTC and ETH trade sideways after yesterday&#8217;s sell-off.</p>



<p>Illicit activity makes up .15% of crypto transaction volume.</p>



<h3><strong>Latest in Macro:</strong></h3>



<ul><li>S&amp;P 500: 4,696, -0.10%</li><li>NASDAQ: 15,080, -0.13%</li><li>Gold: $1,788, -1.19%</li><li>WTI Crude Oil: $79.47, +2.08%</li><li>10-Year Treasury: 1.73%, +0.027%</li></ul>



<h3><strong>Latest in Crypto:</strong></h3>



<ul><li>BTC: $43,221, -0.10%</li><li>ETH: $3,436, -2.50%</li><li>ETH/BTC: 0.0793, -2.51%</li><li>BTC.D: 39.60%, -0.31%</li></ul>



<h3>Bond yields rally</h3>



<p>Jurrien Timmer, director of global macro at Fidelity, wrote, &#8220;The 30y TIPS real yield has jumped 30 bps in the last 4 days. Less-negative real rates could become part of the landscape during this Fed cycle, with implications for the liquidity highfliers and SoV (Store of Value) plays.&#8221;</p>



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="585" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbVFGnUYAc5vDF-1024x585.png" alt="" class="wp-image-13612" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbVFGnUYAc5vDF-1024x585.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbVFGnUYAc5vDF-1024x585.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbVFGnUYAc5vDF-1024x585.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbVFGnUYAc5vDF-1024x585.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbVFGnUYAc5vDF-1024x585.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbVFGnUYAc5vDF-1024x585.png?w=457 457w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbVFGnUYAc5vDF-1024x585.png?w=383 383w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbVFGnUYAc5vDF-1024x585.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbVFGnUYAc5vDF-1024x585.png?w=1896 1896w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Fidelity</figcaption></figure>



<p>The rise in rates likely comes as a result of the FOMC minutes released yesterday. “We are phasing out our purchases more rapidly because with elevated inflation pressures and a rapidly strengthening labor market, the economy no longer needs increasing amounts of policy support,” Powell <a href="https://cms.blockworks.co/fed-minutes-show-supply-chain-woes-inflation-will-drag-on/" target="_blank" rel="noreferrer noopener">said</a> during a press conference in December following the conclusion of the two-day FOMC meeting.</p>



<p>The Wall Street Journal <a href="https://www.wsj.com/articles/fed-weighs-proposals-for-eventual-reduction-in-bond-holdings-11641292201" target="_blank" rel="noreferrer noopener">wrote</a>: &#8220;They noted that current conditions included a stronger economic outlook, higher inflation, and a larger balance sheet and thus could warrant a potentially faster pace of policy rate normalization&#8221;.</p>



<h3>BTC &amp; ETH</h3>



<p>The rise in rates and news of tightening sent digital asset markets tumbling yesterday. </p>



<p>Timmer continued by adding, &#8220;I remain constructive on BTC &amp; ETH over the long-term (and still see $100k as fair value for BTC in a few years based on my supply/demand models). But there is no denying that the short-term charts don’t look great&#8221;.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="581" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbqGLjX0AIb-SB-1024x581.jpg" alt="" class="wp-image-13613" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbqGLjX0AIb-SB-1024x581.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbqGLjX0AIb-SB-1024x581.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbqGLjX0AIb-SB-1024x581.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbqGLjX0AIb-SB-1024x581.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbqGLjX0AIb-SB-1024x581.jpg?w=460 460w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbqGLjX0AIb-SB-1024x581.jpg?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbqGLjX0AIb-SB-1024x581.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/FIbqGLjX0AIb-SB-1024x581.jpg?w=1199 1199w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Bitcoin Fidelity</figcaption></figure></div>



<p>ETH has begun to bounce back versus BTC after trading as low as $3,331 earlier today, according to data from <a href="https://www.coingecko.com/en/coins/ethereum" target="_blank" rel="noreferrer noopener">CoinGecko</a>. The ETH/BTC ratio was last hovering near .0795, according to <a href="https://www.tradingview.com/chart/5GPs0hRQ/?symbol=BINANCE%3AETHBTC" target="_blank" rel="noreferrer noopener">Trading View,</a> as it tries to reclaim its longer-term uptrend.</p>



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="1000" height="683" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-06_17-06-50.png" alt="" class="wp-image-13616" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-06_17-06-50.png?w=1000 1000w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-06_17-06-50.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-06_17-06-50.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-06_17-06-50.png?w=376 376w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-06_17-06-50.png?w=382 382w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-06_17-06-50.png?w=321 321w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-06_17-06-50.png?w=80 80w" sizes="(max-width: 1000px) 100vw, 1000px" /></figure>



<h3>Crime in crypto on the decline</h3>



<p>Illicit activity as a percentage of transaction volume has fallen drastically over the past five years, according to a <a href="https://blog.chainalysis.com/reports/2022-crypto-crime-report-introduction/" target="_blank" rel="noreferrer noopener">Chainalysis report</a> released today. </p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="589" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/chart-2-shares-1024x589.png" alt="" class="wp-image-13626" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/chart-2-shares-1024x589.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/chart-2-shares-1024x589.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/chart-2-shares-1024x589.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/chart-2-shares-1024x589.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/chart-2-shares-1024x589.png?w=454 454w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/chart-2-shares-1024x589.png?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/chart-2-shares-1024x589.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/chart-2-shares-1024x589.png?w=1366 1366w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Chainalysis</figcaption></figure></div>



<p>&#8220;Across all cryptocurrencies tracked by Chainalysis, total transaction volume grew to $15.8 trillion in 2021, up 567% from 2020’s totals,&#8221; said Chainalysis. &#8220;Given that roaring adoption, it’s no surprise that more cybercriminals are using cryptocurrency. But the fact that the increase was just 79% — nearly an order of magnitude lower than overall adoption — might be the biggest surprise of all.&nbsp;In fact, with the growth of legitimate cryptocurrency usage far outpacing the growth of criminal usage, illicit activity’s share of cryptocurrency transaction volume has never been lower.&#8221;</p>



<h3>NFTs</h3>



<p>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:</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="336" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.06-PM-1024x336.png" alt="" class="wp-image-13623" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.06-PM-1024x336.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.06-PM-1024x336.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.06-PM-1024x336.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.06-PM-1024x336.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.06-PM-1024x336.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.06-PM-1024x336.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.06-PM-1024x336.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.06-PM-1024x336.png?w=1223 1223w" 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="349" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.26-PM-1024x349.png" alt="" class="wp-image-13624" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.26-PM-1024x349.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.26-PM-1024x349.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.26-PM-1024x349.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.26-PM-1024x349.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.26-PM-1024x349.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.26-PM-1024x349.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.26-PM-1024x349.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-06-at-5.26.26-PM-1024x349.png?w=1181 1181w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Solana Projects </figcaption></figure></div>



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



<hr class="wp-block-separator"/>



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BTC and ETH Trade Sideways After Yesterday’s Sell-off: Markets Wrap

<div id="highlights-block_617725d07bf3f" class="highlights">
        <ul>
                <li>BTC briefly trades below $44,000 as global hashrate declined earlier today</li>
                <li>This BTC sell-off has not been driven by forced long liquidations</li>
            </ul>
    
</div>



<p>Authorities of Kazakhstan declared a nationwide state of emergency today and shut down the country&#8217;s internet. </p>



<p>As a result of the internet outage, the global hashrate took a dive earlier before later recovering. </p>



<p>This BTC sell-off is not the result of forced liquidations.</p>



<p>Serena Williams purchased a CryptoPunk. </p>



<h3><strong>Latest in Macro:</strong></h3>



<ul><li>S&amp;P 500: 4,700, -1.94%</li><li>NASDAQ: 15,100, -3.34%</li><li>Gold: $1,809, -0.22%</li><li>WTI Crude Oil: $77.05, +0.08%</li><li>10-Year Treasury: 1.702%, +0.036%</li></ul>



<h3><strong>Latest in Crypto:</strong></h3>



<ul><li>BTC: $44,155, -4.60%</li><li>ETH: $3,612, -5.40%</li><li>ETH/BTC: 0.0820, -0.73%</li><li>BTC.D: 39.59%, +0.27%</li></ul>



<h3>Kazakhstan</h3>



<p>Authorities of Kazakhstan declared a nationwide state of emergency today as citizens <a href="https://twitter.com/PriapusIQ/status/1478657751001800707?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1478657751001800707%7Ctwgr%5E%7Ctwcon%5Es1_c10&amp;ref_url=https%3A%2F%2Fcms.blockworks.co%2Fwp-admin%2Fpost.php%3Fpost%3D13525action%3Dedit" target="_blank" rel="noreferrer noopener">protested</a> against the rise of fuel prices.</p>



<p>&#8220;Protests spread across the nation of 19 million this week in outrage over a New Year increase in prices for liquid petroleum gas (LPG), which is widely used to fuel cars in the west of the country,&#8221; read an article from <a href="https://www.themoscowtimes.com/2022/01/05/state-of-emergency-in-kazakhstan-as-president-vows-crackdown-a75977" target="_blank" rel="noreferrer noopener">The Moscow Times</a>. &#8220;Thousands took to the streets in the country&#8217;s biggest city Almaty and in the western province of Mangystau, saying the price rise was unfair given oil and gas exporter Kazakhstan&#8217;s vast energy reserves.&#8221;</p>



<h3>Hashrate drops</h3>



<p>Due to the protests, Kazakhstan&#8217;s government shut down the nation&#8217;s access to the internet, according <a href="https://www.nytimes.com/2022/01/05/world/europe/kazakhstan-protests-gas-prices.html" target="_blank" rel="noreferrer noopener">to The New York Times</a>, which led to many bitcoin miners going off-line earlier today. </p>



<p>The hashrate dropped from a high of 194 EH/s on Jan. 4, to a low of 168 EH/s during the internet outage in Kazakhstan today, according to data from <a href="https://www.coinwarz.com/mining/bitcoin/hashrate-chart" target="_blank" rel="noreferrer noopener">Coinwarz</a>. (It is worth noting that hashrate is calculated differently by various sources.)</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="389" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.18.59-PM-1024x389.png" alt="" class="wp-image-13555" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.18.59-PM-1024x389.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.18.59-PM-1024x389.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.18.59-PM-1024x389.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.18.59-PM-1024x389.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.18.59-PM-1024x389.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.18.59-PM-1024x389.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.18.59-PM-1024x389.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.18.59-PM-1024x389.png?w=1091 1091w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Bitcoin hashrate drop. Source: coinwarz.com</figcaption></figure></div>



<p>Kazakhstan accounts for roughly 21.9% of the global hash rate, according to the <a href="https://ccaf.io/cbeci/mining_map" target="_blank" rel="noreferrer noopener">University of Cambridge.</a> The internet outage is likely the reason behind the drop in global hash power online. </p>



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="735" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-05-at-17.01.21-1024x735.png" alt="" class="wp-image-13556" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-05-at-17.01.21-1024x735.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-05-at-17.01.21-1024x735.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-05-at-17.01.21-1024x735.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-05-at-17.01.21-1024x735.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-05-at-17.01.21-1024x735.png?w=358 358w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-05-at-17.01.21-1024x735.png?w=364 364w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-05-at-17.01.21-1024x735.png?w=305 305w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-05-at-17.01.21-1024x735.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screenshot-2022-01-05-at-17.01.21-1024x735.png?w=1552 1552w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



<h3>BTC derivatives</h3>



<p>Unfortunately for BTC bulls, this move lower can&#8217;t be attributed to forced liquidations. $310 million worth of long positions have been closed, but futures open interest dropped just $840 million according to data from <a href="https://www.coinglass.com/BitcoinOpenInterest" target="_blank" rel="noreferrer noopener">Coinglass</a>.  </p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="420" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-1024x420.png" alt="" class="wp-image-13560" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-1024x420.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-1024x420.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-1024x420.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-1024x420.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-1024x420.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-1024x420.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-1024x420.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-1024x420.png?w=1220 1220w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Coinglass</figcaption></figure></div>



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="430" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-copy-1-1024x430.png" alt="" class="wp-image-13564" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-copy-1-1024x430.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-copy-1-1024x430.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-copy-1-1024x430.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-copy-1-1024x430.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-copy-1-1024x430.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-copy-1-1024x430.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-copy-1-1024x430.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-7-copy-1-1024x430.png?w=1190 1190w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Coinglass</figcaption></figure>



<p>Perpetual funding rates show a slightly positive bias across most exchanges, so long side traders are still paying shorts to keep their positions open, according to <a href="https://app.laevitas.ch/dashboard/btc/derivs/overview" target="_blank" rel="noreferrer noopener">Laevitas</a>.</p>



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="315" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.55.15-PM-1024x315.png" alt="" class="wp-image-13565" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.55.15-PM-1024x315.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.55.15-PM-1024x315.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.55.15-PM-1024x315.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.55.15-PM-1024x315.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.55.15-PM-1024x315.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.55.15-PM-1024x315.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.55.15-PM-1024x315.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-3.55.15-PM-1024x315.png?w=1046 1046w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Laevitas.ch</figcaption></figure>



<h3>NFTs</h3>



<p>Famous professional tennis player, Serena Williams, purchased a CryptoPunk and made it her profile picture on <a href="https://twitter.com/serenawilliams/status/1478713588156088324?s=20" target="_blank" rel="noreferrer noopener">Twitter</a>.</p>



<p>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:</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="341" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.15-PM-1024x341.png" alt="" class="wp-image-13566" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.15-PM-1024x341.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.15-PM-1024x341.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.15-PM-1024x341.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.15-PM-1024x341.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.15-PM-1024x341.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.15-PM-1024x341.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.15-PM-1024x341.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.15-PM-1024x341.png?w=1198 1198w" 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="356" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.23-PM-1024x356.png" alt="" class="wp-image-13567" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.23-PM-1024x356.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.23-PM-1024x356.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.23-PM-1024x356.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.23-PM-1024x356.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.23-PM-1024x356.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.23-PM-1024x356.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.23-PM-1024x356.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-05-at-4.06.23-PM-1024x356.png?w=1172 1172w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Solana Projects </figcaption></figure></div>



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



<hr class="wp-block-separator"/>



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BTC Slumps as Kazakhstan Miners Power Down: Markets Wrap

<div id="highlights-block_617725d07bf3f" class="highlights">
        <ul>
                <li>ETH outperformed BTC over the past five days as derivatives activity picks up</li>
                <li>OpenSea begins 2022 with a bang</li>
            </ul>
    
</div>



<p>The ETH/BTC ratio has rallied roughly 4.7% over the past five days as ETH outperforms BTC.  </p>



<p>Ethereum based derivatives activity has resurged over the past week.</p>



<p>OpenSea opens 2022 with a bang, on pace for record monthly volume.</p>



<h3><strong>Latest in Macro:</strong></h3>



<ul><li>S&amp;P 500: 4,793, -0.06%</li><li>NASDAQ: 15,622, -1.33%</li><li>Gold: $1,814, +0.60%</li><li>WTI Crude Oil: $77.21, +1.49%</li><li>10-Year Treasury: 1.649%, +0.032%</li></ul>



<h3><strong>Latest in Crypto:</strong></h3>



<ul><li>BTC: $46,155, -0.30%</li><li>ETH: $3,813, +1.40%</li><li>ETH/BTC: 0.0826, +1.98%</li><li>BTC.D: 39.41%, -0.69%</li></ul>



<h3>ETH/BTC</h3>



<p>ETH has outperformed BTC over the past five days with the ETH/BTC ratio up 4.72%, hovering near .0825, according to data from <a href="https://www.tradingview.com/chart/5GPs0hRQ/?symbol=BINANCE%3AETHBTC" target="_blank" rel="noreferrer noopener">Trading View.</a>  </p>



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="948" height="746" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-04_16-04-26.png" alt="" class="wp-image-13457" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-04_16-04-26.png?w=948 948w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-04_16-04-26.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-04_16-04-26.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-04_16-04-26.png?w=327 327w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-04_16-04-26.png?w=332 332w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-04_16-04-26.png?w=278 278w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/ETHBTC_2022-01-04_16-04-26.png?w=80 80w" sizes="(max-width: 948px) 100vw, 948px" /><figcaption>Source: Trading View</figcaption></figure></div>



<h3>ETH derivatives picking up</h3>



<p>According to information from <a href="https://twitter.com/intotheblock/status/1478395316961525770?s=20" target="_blank" rel="noreferrer noopener">intotheblock</a>:</p>



<ul><li>Perpetual funding rates on top exchanges are turning positive</li><li>Swap volume of perpetuals futures contracts have topped $22 billion again</li><li>Perps open interest is perking up</li></ul>



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="948" height="374" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.57.57-PM.png" alt="" class="wp-image-13458" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.57.57-PM.png?w=948 948w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.57.57-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.57.57-PM.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.57.57-PM.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.57.57-PM.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.57.57-PM.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.57.57-PM.png?w=80 80w" sizes="(max-width: 948px) 100vw, 948px" /><figcaption>Source: intotheblock</figcaption></figure></div>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="336" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.38-PM-1024x336.png" alt="" class="wp-image-13459" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.38-PM-1024x336.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.38-PM-1024x336.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.38-PM-1024x336.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.38-PM-1024x336.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.38-PM-1024x336.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.38-PM-1024x336.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.38-PM-1024x336.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.38-PM-1024x336.png?w=1130 1130w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: intotheblock</figcaption></figure></div>



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="329" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.56-PM-1024x329.png" alt="" class="wp-image-13460" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.56-PM-1024x329.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.56-PM-1024x329.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.56-PM-1024x329.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.56-PM-1024x329.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.56-PM-1024x329.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.56-PM-1024x329.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.56-PM-1024x329.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-3.58.56-PM-1024x329.png?w=1129 1129w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: intotheblock</figcaption></figure>



<h3>OpenSea volume explodes </h3>



<p>OpenSea is eyeing a $13 billion valuation, <a href="https://twitter.com/EricNewcomer/status/1478433128217731079?s=20" target="_blank" rel="noreferrer noopener">according</a> to Eric Newcomer.</p>



<p>Trading volume on OpenSea has exploded to start out 2022, with roughly $870 million of volume in the first four days of the new year, according to data from <a href="https://dune.xyz/rchen8/opensea" target="_blank" rel="noreferrer noopener">Dune Analytics</a>. This puts OpenSea on pace for $6.74 billion in monthly trading volume. For comparison, that would be nearly double the current high of $3.42 billion seen in August 2021.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="290" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.03.06-PM-1024x290.png" alt="" class="wp-image-13466" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.03.06-PM-1024x290.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.03.06-PM-1024x290.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.03.06-PM-1024x290.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.03.06-PM-1024x290.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.03.06-PM-1024x290.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.03.06-PM-1024x290.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.03.06-PM-1024x290.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.03.06-PM-1024x290.png?w=1041 1041w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Dune Analytics</figcaption></figure></div>



<h3>NFTs</h3>



<p>Information from ARK Invest suggest a majority of NFT demand comes in the form of collectibles, as seen in the following chart:</p>



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="574" height="387" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/nft-dmenad.png" alt="" class="wp-image-13467" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/nft-dmenad.png?w=574 574w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/nft-dmenad.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/nft-dmenad.png?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/nft-dmenad.png?w=387 387w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/nft-dmenad.png?w=325 325w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/nft-dmenad.png?w=80 80w" sizes="(max-width: 574px) 100vw, 574px" /><figcaption>Source: Ark Invest</figcaption></figure></div>



<p>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:</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="338" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.00-PM-1024x338.png" alt="" class="wp-image-13468" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.00-PM-1024x338.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.00-PM-1024x338.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.00-PM-1024x338.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.00-PM-1024x338.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.00-PM-1024x338.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.00-PM-1024x338.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.00-PM-1024x338.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.00-PM-1024x338.png?w=1203 1203w" 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="355" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.14-PM-1024x355.png" alt="" class="wp-image-13469" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.14-PM-1024x355.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.14-PM-1024x355.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.14-PM-1024x355.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.14-PM-1024x355.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.14-PM-1024x355.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.14-PM-1024x355.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.14-PM-1024x355.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-04-at-5.34.14-PM-1024x355.png?w=1175 1175w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Solana Projects </figcaption></figure></div>



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



<hr class="wp-block-separator"/>



<p><strong>Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.</strong></p>



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ETH Looking Strong Against BTC: Markets Wrap

<div id="highlights-block_aa56f6e31440935a25daba682870cca1" class="highlights">
        <ul>
                <li>BTC briefly trades below $46,000 on its 13th birthday</li>
                <li>OpenSea dominates secondary NFT marketshare</li>
            </ul>
    
</div>



<p>Today marks the 13th anniversary since the genesis block was mined on the Bitcoin network on Jan. 3, 2009. </p>



<p>Perpetual funding rates remain mixed as traders place their bets on <a href="https://blockworks.co/price/btc">BTC</a> price action.</p>



<p>Futures open interest increased to $18.45 billion from $18.11 billion yesterday.</p>



<p>OpenSea dominated the Ethereum secondary NFT market share throughout 2021.</p>



<h3><strong>Latest in Macro:</strong></h3>



<ul>
<li>S&amp;P 500: 4,796, +0.64%</li>



<li>NASDAQ: 15,832, +1.20%</li>



<li>Gold: $1,801, -1.49%</li>



<li>WTI Crude Oil: $76.03, +1.09%</li>



<li>10-Year Treasury: 1.637%, +0.139%</li>
</ul>



<h3><strong>Latest in Crypto:</strong></h3>



<ul>
<li><a href="https://blockworks.co/price/btc">BTC</a>: $46,143, -2.20%</li>



<li><a href="https://blockworks.co/price/eth">ETH</a>: $3,733, -2.40%</li>



<li>ETH/BTC: 0.0810, +0.01%</li>



<li>BTC.D: 39.62%, -0.69%</li>
</ul>



<h3>Bitcoin turns 13 years old</h3>



<p>Today marks the 13th anniversary since the genesis block was mined on the Bitcoin network on Jan. 3, 2009, according to <a href="https://www.investopedia.com/terms/g/genesis-block.asp" target="_blank" rel="noreferrer noopener">Investopedia</a>.</p>



<p>Lyn Alden, founder of Lyn Alden Investment Strategy, <a href="https://twitter.com/LynAldenContact/status/1478107171111976965?s=20" target="_blank" rel="noreferrer noopener">wrote</a> on Twitter, &#8220;Bitcoin is 13 years old today, the anniversary of the genesis block. It&#8217;s an angsty teenager now, I suppose, which actually kind of fits. The US dollar in its current fiat form is 50 years old, born in 1971. Bitcoin is now more than 1/4th as old as the current US dollar&#8221;. </p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="644" height="630" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/market-btc.png" alt="" class="wp-image-13408" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/market-btc.png?w=644 644w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/market-btc.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/market-btc.png?w=263 263w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/market-btc.png?w=267 267w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/market-btc.png?w=224 224w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/market-btc.png?w=80 80w" sizes="(max-width: 644px) 100vw, 644px" /><figcaption class="wp-element-caption">Source: @LynAldenContact</figcaption></figure></div>


<h3>BTC slips below $46,000</h3>



<p>Despite the anniversary, BTC price action has been sluggish. BTC briefly traded below $46,000 after trading near $47,500 in the middle of the day, according to data from <a href="https://www.coingecko.com/en/coins/bitcoin" target="_blank" rel="noreferrer noopener">CoinGecko</a>. </p>



<p>Perpetual funding rates remain mixed, according to information for <a href="https://app.laevitas.ch/dashboard/btc/derivs/overview" target="_blank" rel="noreferrer noopener">laevitas.ch</a>, which implies a lack of consensus on price direction amongst perp traders. </p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="417" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.30.53-PM-1024x417.png" alt="" class="wp-image-13410" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.30.53-PM-1024x417.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.30.53-PM-1024x417.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.30.53-PM-1024x417.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.30.53-PM-1024x417.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.30.53-PM-1024x417.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.30.53-PM-1024x417.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.30.53-PM-1024x417.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.30.53-PM-1024x417.png?w=1081 1081w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Laevitas.ch</figcaption></figure></div>


<h3>Minimal liquidations</h3>



<p>Although BTC has trended towards the downside today, there has been an underwhelming amount of long liquidations: $29.57 million <a href="https://www.coinglass.com/LiquidationData" target="_blank" rel="noreferrer noopener">according</a> to Coinglass.com. </p>



<p>Futures open interest has increased to start out the new year. As seen in the following chart from Coinglass, this is slightly abnormal behavior to see futures open interest increase on a red day. Increased open interest implies more leverage in the market, which increases the probability of an explosive move to the upside or downside as traders are forced to close their positions if it isn&#8217;t going their way.</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="420" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-6-1024x420.png" alt="" class="wp-image-13411" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-6-1024x420.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-6-1024x420.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-6-1024x420.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-6-1024x420.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-6-1024x420.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-6-1024x420.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-6-1024x420.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/bybt_chart-6-1024x420.png?w=1218 1218w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Glassnode</figcaption></figure></div>


<h3>NFTs</h3>



<p>OpenSea dominated Ethereum secondary NFT trading volume in 2021, according to data from <a href="https://dune.xyz/browse/dashboards" target="_blank" rel="noreferrer noopener">Dune Analytics.</a></p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="620" height="372" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/eth-nft-market.png" alt="" class="wp-image-13413" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/eth-nft-market.png?w=620 620w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/eth-nft-market.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/eth-nft-market.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/eth-nft-market.png?w=435 435w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/eth-nft-market.png?w=365 365w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/eth-nft-market.png?w=80 80w" sizes="(max-width: 620px) 100vw, 620px" /><figcaption class="wp-element-caption">Source: Dune Analytics</figcaption></figure></div>


<p>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:</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="338" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.13-PM-1024x338.png" alt="" class="wp-image-13414" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.13-PM-1024x338.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.13-PM-1024x338.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.13-PM-1024x338.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.13-PM-1024x338.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.13-PM-1024x338.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.13-PM-1024x338.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.13-PM-1024x338.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.13-PM-1024x338.png?w=1223 1223w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Ethereum Projects</figcaption></figure></div>

<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="346" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.24-PM-1024x346.png" alt="" class="wp-image-13415" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.24-PM-1024x346.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.24-PM-1024x346.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.24-PM-1024x346.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.24-PM-1024x346.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.24-PM-1024x346.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.24-PM-1024x346.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.24-PM-1024x346.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/Screen-Shot-2022-01-03-at-4.52.24-PM-1024x346.png?w=1193 1193w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Solana Projects </figcaption></figure></div>


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



<hr class="wp-block-separator has-css-opacity"/>



<p><strong>Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.</strong></p>



<hr class="wp-block-separator has-css-opacity"/>


Bitcoin Slides Below $46,000 on Its 13th Birthday: Markets Wrap

<div id="highlights-block_617725d07bf3f" class="highlights">
        <ul>
                <li>BTC is up 78.5% from Jan. 1, 2021</li>
                <li>BTC investment vehicles could be absorbing demand that would otherwise take place on-chain</li>
            </ul>
    
</div>



<p>BTC is up 78.5% from Jan. 1, 2021, with a current drawdown of 24.4% from previous all-time highs.</p>



<p>2.214 million BTC has traded hands between $45,500 and $50,800, according to data from Glassnode.</p>



<p>Long-term bitcoin holders have grown by ~16% over the course of this year.</p>



<p>Bitcoin investment vehicles, such as BITO, could be absorbing demand that would otherwise take place on-chain.</p>



<h3><strong>Latest in Macro:</strong></h3>



<ul><li>S&amp;P 500: 4,793, +0.14%</li><li>NASDAQ: 15,766, -0.10%</li><li>Gold: $1,804, -0.13%</li><li>WTI Crude Oil: $76.52, +0.71%</li><li>10-Year Treasury: 1.558%, +0.077%</li></ul>



<h3><strong>Latest in Crypto:</strong></h3>



<ul><li>BTC: $47,357, -1.10%</li><li>ETH: $3,732, -2.70%</li><li>ETH/BTC: 0.0787, -1.32%</li><li>BTC.D: 40.24%, +0.62%</li></ul>



<h3>2021 BTC price action</h3>



<p>Bitcoin&#8217;s price is up 78.5% from Jan. 1, 2021, with a current drawdown of 24.4% from the all-time high seen on Nov. 10, 2021, according to data from <a href="https://insights.glassnode.com/the-week-onchain-week-52-2021/?utm_source=Email&amp;utm_medium=Newsletter&amp;utm_campaign=WOC-52" target="_blank" rel="noreferrer noopener">Glassnode</a>.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-2.46.02-PM-1024x576.png" alt="" class="wp-image-13302" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-2.46.02-PM-1024x576.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-2.46.02-PM-1024x576.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-2.46.02-PM-1024x576.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-2.46.02-PM-1024x576.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-2.46.02-PM-1024x576.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-2.46.02-PM-1024x576.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-2.46.02-PM-1024x576.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-2.46.02-PM-1024x576.png?w=1155 1155w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode</figcaption></figure></div>



<h3>Unspent transaction output realized price distribution</h3>



<p>&#8220;A reasonably large volume cluster has been established in this week&#8217;s price range, equivalent to 2.214M BTC (11.7% of supply). This indicates that a non-trivial degree of demand has been mobilsed during the consolidation, with a large proportion of coins changing hands between $45k and $50k,&#8221; reads a <a href="https://insights.glassnode.com/the-week-onchain-week-52-2021/?utm_source=Email&amp;utm_medium=Newsletter&amp;utm_campaign=WOC-52" target="_blank" rel="noreferrer noopener">Glassnode report</a>. </p>



<p>This has helped establish a relatively strong floor for bitcoin&#8217;s price in the mid $40k range, assuming investors don&#8217;t begin selling their underwater positions. </p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="608" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.03.39-PM-1024x608.png" alt="" class="wp-image-13303" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.03.39-PM-1024x608.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.03.39-PM-1024x608.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.03.39-PM-1024x608.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.03.39-PM-1024x608.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.03.39-PM-1024x608.png?w=440 440w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.03.39-PM-1024x608.png?w=369 369w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.03.39-PM-1024x608.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.03.39-PM-1024x608.png?w=1158 1158w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode</figcaption></figure></div>



<h3>Long-term holders are stacking sats</h3>



<p>Long-term holders have increased their holdings over the past year, taking advantage of any price dips to acquire more of the number one digital asset.</p>



<p>This week&#8217;s <a href="https://insights.glassnode.com/the-week-onchain-week-52-2021/?utm_source=Email&amp;utm_medium=Newsletter&amp;utm_campaign=WOC-52" target="_blank" rel="noreferrer noopener">Glassnode report</a> states:</p>



<ul><li><strong>Long-Term Holders </strong>added 1.846 million BTC to their holdings, bringing their total stack to 13.33 million BTC. This reflects an increase of 16% over the year.</li><li><strong>Short-Term Holder </strong>supply has declined by 1.428 million BTC, with this cohort currently holding 3.01 million BTC. This reflects a decline of 32% on the year.</li><li><strong>Sovereign Supply</strong>, defined as all coins held outside exchange reserves, is currently at an all-time-high of 16.34 million BTC.</li></ul>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="585" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.21.50-PM-1024x585.png" alt="" class="wp-image-13305" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.21.50-PM-1024x585.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.21.50-PM-1024x585.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.21.50-PM-1024x585.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.21.50-PM-1024x585.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.21.50-PM-1024x585.png?w=457 457w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.21.50-PM-1024x585.png?w=384 384w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.21.50-PM-1024x585.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.21.50-PM-1024x585.png?w=1156 1156w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode</figcaption></figure></div>



<h3>BTC on exchanges close to flat for 2021</h3>



<p>The amount of bitcoin held on centralized exchanges is down 67,800 BTC on the year, representing a decline of 2.6%, according to <a href="https://insights.glassnode.com/the-week-onchain-week-52-2021/?utm_source=Email&amp;utm_medium=Newsletter&amp;utm_campaign=WOC-52" target="_blank" rel="noreferrer noopener">Glassnode</a>.</p>



<p>It is worth noting that the BTC inflation rate has been hovering around 1.75% since the halving took place in May of 2020, according to data from <a href="https://charts.woobull.com/bitcoin-inflation/" target="_blank" rel="noreferrer noopener">woobull.com</a>. This implies long-term holders and miners are keeping freshly minted BTC off of exchanges. </p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="535" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.37.16-PM-1024x535.png" alt="" class="wp-image-13306" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.37.16-PM-1024x535.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.37.16-PM-1024x535.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.37.16-PM-1024x535.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.37.16-PM-1024x535.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.37.16-PM-1024x535.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.37.16-PM-1024x535.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.37.16-PM-1024x535.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-3.37.16-PM-1024x535.png?w=1172 1172w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: charts.woobull.com</figcaption></figure></div>



<h3>Futures and BTC volatility</h3>



<p>The <a href="https://insights.glassnode.com/the-week-onchain-week-52-2021/?utm_source=Email&amp;utm_medium=Newsletter&amp;utm_campaign=WOC-52" target="_blank" rel="noreferrer noopener">Glassnode report</a> continues: &#8220;Whilst futures open interest is still some way off all-time-highs, rapid increases in leverage can indicate a clustering of stop-losses and liquidation levels in close proximity to the current price. This adds higher probabilities to a potential short, or long squeeze in the more immediate term.&#8221;</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="583" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.12.08-PM-1-1024x583.png" alt="" class="wp-image-13309" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.12.08-PM-1-1024x583.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.12.08-PM-1-1024x583.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.12.08-PM-1-1024x583.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.12.08-PM-1-1024x583.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.12.08-PM-1-1024x583.png?w=459 459w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.12.08-PM-1-1024x583.png?w=385 385w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.12.08-PM-1-1024x583.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.12.08-PM-1-1024x583.png?w=1160 1160w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure></div>



<p>Some industry experts, such as Caitlin Long, believe that the increase in derivatives surrounding BTC, such as a futures-backed ETF, has led to price suppression.</p>



<p>She took to <a href="https://twitter.com/CaitlinLong_/status/1292988036704161792?s=20" target="_blank" rel="noreferrer noopener">Twitter</a> over a year ago saying, &#8220;This question has been gnawing at me: how does all the price suppression that has hit Bitcoin in the past ~3yrs (as the bad kind of financialization started permeating the mkt) jive with Plan B&#8217;s stock-to-flow model? Answer: gold, silver, etc are massively rehypothecated too. An asset that has a fixed emission schedule &amp; HASN&#8217;T been rehypothecated yet logically performs better than one that already has been, all else equal.&#8221;</p>



<p>Her point is that demand for bitcoin is being absorbed by investment vehicles, such as BITO and leveraged trading on various exchanges, that would otherwise flow into the Bitcoin network on-chain and be shown via price appreciation. </p>



<h3>NFTs</h3>



<p>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:</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="333" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.01-PM-1024x333.png" alt="" class="wp-image-13310" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.01-PM-1024x333.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.01-PM-1024x333.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.01-PM-1024x333.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.01-PM-1024x333.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.01-PM-1024x333.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.01-PM-1024x333.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.01-PM-1024x333.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.01-PM-1024x333.png?w=1227 1227w" 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="359" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.09-PM-1024x359.png" alt="" class="wp-image-13311" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.09-PM-1024x359.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.09-PM-1024x359.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.09-PM-1024x359.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.09-PM-1024x359.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.09-PM-1024x359.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.09-PM-1024x359.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.09-PM-1024x359.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-29-at-4.13.09-PM-1024x359.png?w=1198 1198w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Solana Projects </figcaption></figure></div>



<p>If you made it this far, thanks for reading and Happy New Year! I am looking forward to catching up in 2022.</p>



<hr class="wp-block-separator"/>



<p><strong>Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.</strong></p>



<hr class="wp-block-separator"/>


BTC Turbulence Continues Heading into 2022: Markets Wrap

<div id="highlights-block_617725d07bf3f" class="highlights">
        <ul>
                <li>Daily exchange volumes are down from the highs seen in May of 2021</li>
                <li>Activity on the Bitcoin network has been flat to down throughout 2021</li>
            </ul>
    
</div>



<p><meta charset="utf-8">The number of BTC wallet addresses holding 10 or more BTC has been in a downtrend since the end of 2020.</p>



<p>Daily exchange volume has yet to return to levels seen earlier in 2021 as they hover in the $25 billion to $50 billion range.</p>



<p>Active addresses on the Bitcoin network are down from 1.2 million at the beginning of 2021 to 995,000 today.</p>



<p>$120.87 million of long positions have been liquidated over the last 24 hours as a result of today&#8217;s BTC price action.</p>



<h3><strong>Latest in Macro:</strong></h3>



<ul><li>S&amp;P 500: 4,786, -0.10%</li><li>NASDAQ: 15,781, -0.56%</li><li>Gold: $1,805, -0.36%</li><li>WTI Crude Oil: $75.99, +0.56%</li><li>10-Year Treasury: 1.482%, +0.001%</li></ul>



<h3><strong>Latest in Crypto:</strong></h3>



<ul><li>BTC: $47,844, -6.70%</li><li>ETH: $3,831, -6.40%</li><li>ETH/BTC: 0.0800, +0.73%</li><li>BTC.D: 39.95%, -0.27%</li></ul>



<h3>Declining exchange volume</h3>



<p>Daily exchange volume has yet to return to levels seen earlier in 2021 as they hover in the $25 billion to $50 billion range, according to data from <a href="https://www.theblockcrypto.com/data/crypto-markets/spot" target="_blank" rel="noreferrer noopener">The Block</a>.</p>



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="911" height="391" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-12.35.49-PM.png" alt="" class="wp-image-13248" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-12.35.49-PM.png?w=911 911w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-12.35.49-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-12.35.49-PM.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-12.35.49-PM.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-12.35.49-PM.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-12.35.49-PM.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-12.35.49-PM.png?w=80 80w" sizes="(max-width: 911px) 100vw, 911px" /><figcaption>Source: The Block</figcaption></figure></div>



<h3>Stagnant activity on the Bitcoin network</h3>



<p>Active addresses on the Bitcoin network are down from 1.2 million at the beginning of 2021 to 995,000 today, according to data from <a href="https://studio.glassnode.com/metrics?a=BTC&amp;category=Network%20Stats&amp;m=addresses.ActiveCount&amp;s=1609179676&amp;u=1640649600&amp;zoom=" target="_blank" rel="noreferrer noopener">Glassnode</a>.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-active-addresses-1024x576.png" alt="" class="wp-image-13252" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-active-addresses-1024x576.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-active-addresses-1024x576.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-active-addresses-1024x576.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-active-addresses-1024x576.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-active-addresses-1024x576.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-active-addresses-1024x576.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-active-addresses-1024x576.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-active-addresses-1024x576.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-active-addresses-1024x576.png?w=1800 1800w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode</figcaption></figure></div>



<p>While institutional interest was a common narrative over 2021, the number of BTC wallet addresses holding 10 or more BTC has been in a downtrend since the end of 2020, according to data from <a href="https://studio.glassnode.com/metrics?a=BTC&amp;category=Addresses&amp;m=addresses.Min10Count&amp;s=1582131388&amp;u=1640649600&amp;zoom=" target="_blank" rel="noreferrer noopener">Glassnode</a>, as smart money took profits into price strength. </p>



<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_bitcoin-number-of-addresses-with-balance-≥-10-1024x576.png" alt="" class="wp-image-13253" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-balance-≥-10-1024x576.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-balance-≥-10-1024x576.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-balance-≥-10-1024x576.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-balance-≥-10-1024x576.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-balance-≥-10-1024x576.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-balance-≥-10-1024x576.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-balance-≥-10-1024x576.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-balance-≥-10-1024x576.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-balance-≥-10-1024x576.png?w=1800 1800w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode</figcaption></figure>



<p>&#8220;&#8230;We are still digesting a large loss of active wallets from China and non-China growth, therefore, [the addition of new wallets needs to be greater than the loss of active wallets from China] to exceed that loss of accounts for the network to re-grow too. Likely a matter of time,&#8221; <a href="https://twitter.com/RaoulGMI/status/1475874111616335872?s=20" target="_blank" rel="noreferrer noopener">wrote</a> Raoul Pal, founder of Global Macro Investor. &#8220;Additionally, I didn’t mention that institutional rebalancing, tax-related selling and hedgies squaring books has also added to year-end weakness. This is more temporary, most likely&#8221;.</p>



<h3>Liquidations</h3>



<p>$120.87 million of long positions have been liquidated over the last 24 hours as a result of today&#8217;s BTC price action, according to data from <a href="https://www.coinglass.com/LiquidationData" target="_blank" rel="noreferrer noopener">Coinglass</a>.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="410" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-5-1024x410.png" alt="" class="wp-image-13263" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-5-1024x410.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-5-1024x410.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-5-1024x410.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-5-1024x410.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-5-1024x410.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-5-1024x410.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-5-1024x410.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-5-1024x410.png?w=1248 1248w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Coinglass</figcaption></figure></div>



<p>BTC futures open interest sits at $19.22 billion, according to <a href="https://www.coinglass.com/BitcoinOpenInterest" target="_blank" rel="noreferrer noopener">Coinglass</a>, so there are plenty of long side positions that are yet to be liquidated.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="420" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-6-1024x420.png" alt="" class="wp-image-13264" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-6-1024x420.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-6-1024x420.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-6-1024x420.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-6-1024x420.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-6-1024x420.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-6-1024x420.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-6-1024x420.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-6-1024x420.png?w=1218 1218w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Coinglass</figcaption></figure></div>



<h3>NFTs</h3>



<p>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:</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="336" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.35-PM-1024x336.png" alt="" class="wp-image-13266" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.35-PM-1024x336.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.35-PM-1024x336.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.35-PM-1024x336.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.35-PM-1024x336.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.35-PM-1024x336.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.35-PM-1024x336.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.35-PM-1024x336.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.35-PM-1024x336.png?w=1228 1228w" 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="350" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.46-PM-1024x350.png" alt="" class="wp-image-13267" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.46-PM-1024x350.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.46-PM-1024x350.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.46-PM-1024x350.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.46-PM-1024x350.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.46-PM-1024x350.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.46-PM-1024x350.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.46-PM-1024x350.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-28-at-4.03.46-PM-1024x350.png?w=1198 1198w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Solana Projects </figcaption></figure></div>



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



<hr class="wp-block-separator"/>



<p><strong>Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.</strong></p>



<hr class="wp-block-separator"/>


BTC Retreats as Digital Assets Sell Off: Markets Wrap

<div id="highlights-block_1de725d7417625c4c6cf81b9be52b950" class="highlights">
        <ul>
                <li>Bitcoin has seen a lot of ups and downs over the course of 2021</li>
                <li>A BTC short squeeze could be brewing</li>
            </ul>
    
</div>



<p>Coin Metrics released a <a href="https://coinmetrics.substack.com/p/state-of-the-network-issue-134" target="_blank" rel="noreferrer noopener">report</a> highlighting some BTC moments from 2021.</p>



<p>BTC wallets holding non-zero balances continue to notch new highs.</p>



<p>Bitcoin could be setting up for a short-squeeze as stablecoin-margined open interest rises.</p>



<p>Tether and USDC grew from a combined market cap in 2020 of $25 billion to a combined market cap of $117 billion in 2021, according to the Coin Metrics <a href="https://coinmetrics.substack.com/p/state-of-the-network-issue-134" target="_blank" rel="noreferrer noopener">report</a>.</p>



<h3><strong>Latest in Macro:</strong></h3>



<ul>
<li>S&amp;P 500: 4,649, +1.78%</li>



<li>NASDAQ: 15,341, +2.40%</li>



<li>Gold: $1,789, -0.18%</li>



<li>WTI Crude Oil: $71.47, +4.17%</li>



<li>10-Year Treasury: 1.470%, +0.053%</li>
</ul>



<h3><strong>Latest in Crypto:</strong></h3>



<ul>
<li>BTC: $48,667, +2.60%</li>



<li>ETH: $4,017, +1.30%</li>



<li>ETH/BTC: 0.0824, -2.17%</li>



<li>BTC.D: 40.63%, +0.54%</li>
</ul>



<h3>BTC 2021</h3>



<p>BTC opened the year strong with a Q1 rally up to <a href="https://coinmarketcap.com/currencies/bitcoin/" target="_blank" rel="noreferrer noopener">$57,500</a> ignited by Tesla&#8217;s <a href="https://coinmetrics.substack.com/p/coin-metrics-state-of-the-network-330" target="_blank" rel="noreferrer noopener">announcement</a> on Feb. 8, 2021, that they had added $1.5 billion worth of BTC to their balance sheet. </p>



<p>Tesla&#8217;s announcement coincided with an increase in the number of wallet addresses with a non-zero balance, according to data from <a href="https://studio.glassnode.com/metrics?a=BTC&amp;category=Distribution&amp;m=addresses.NonZeroCount&amp;modal=loginForm&amp;s=1572363587&amp;u=1640044800&amp;zoom=" target="_blank" rel="noreferrer noopener">Glassnode</a>. As seen in the chart below, the number of people who own BTC is at an all-time high.</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-a-non-zero-balance-1024x576.png" alt="" class="wp-image-13002" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-a-non-zero-balance-1024x576.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-a-non-zero-balance-1024x576.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-a-non-zero-balance-1024x576.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-a-non-zero-balance-1024x576.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-a-non-zero-balance-1024x576.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-a-non-zero-balance-1024x576.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-a-non-zero-balance-1024x576.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-a-non-zero-balance-1024x576.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-number-of-addresses-with-a-non-zero-balance-1024x576.png?w=1800 1800w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Glassnode</figcaption></figure></div>


<p>BTC then marched on in Q2 of 2021 as Coinbase, the most widely used exchange in the US to purchase digital assets, <a href="https://news.bitcoin.com/coinbase-ipo-april-14-nasdaq/" target="_blank" rel="noreferrer noopener">went public</a> on April 14. The anticipation of the event led to a rally above $63,000 before breaking trend and retracing below $50,000 in the following weeks.</p>



<p>However, the big decline did not occur until China <a href="https://medium.com/coinmetrics/bitcoin-miners-are-escaping-china-d3937e8f018c" target="_blank" rel="noreferrer noopener">announced</a> it would ban bitcoin mining at the end of May. </p>



<p>&#8220;The Chinese government announced a regulatory crackdown of Bitcoin mining and trading. Although China has &#8216;banned&#8217; Bitcoin several times in the past, this time was different:&nbsp;<a href="https://medium.com/coinmetrics/bitcoin-miners-are-escaping-china-d3937e8f018c" target="_blank" rel="noreferrer noopener">Chinese Bitcoin miners started to shut down</a>&nbsp;and rapidly leave the country in anticipation of regulatory action. The amount of BTC transferred by miners hit a yearly high as some miners moved to sell their holdings and move out of the country.&#8221; reads a <a href="https://coinmetrics.substack.com/p/state-of-the-network-issue-134" target="_blank" rel="noreferrer noopener">Coin Metrics report</a>.</p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="702" height="407" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.16.03-PM.png" alt="" class="wp-image-13004" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.16.03-PM.png?w=702 702w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.16.03-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.16.03-PM.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.16.03-PM.png?w=450 450w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.16.03-PM.png?w=378 378w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.16.03-PM.png?w=80 80w" sizes="(max-width: 702px) 100vw, 702px" /><figcaption class="wp-element-caption">Source: Coin Metrics</figcaption></figure></div>


<p>Between the mining ban and a highly leveraged market structure, a lot of traders were forced to close their long positions which helped push the price below $<a href="https://coinmarketcap.com/currencies/bitcoin/" target="_blank" rel="noreferrer noopener">35,000</a>.</p>



<p>Futures open interest dropped from $20.73 billion on May 10 to $10.93 billion on May 23, according to data from <a href="https://www.coinglass.com/BitcoinOpenInterest" target="_blank" rel="noreferrer noopener">Coinglass</a>.</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="382" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-4-1024x382.png" alt="" class="wp-image-13005" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-4-1024x382.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-4-1024x382.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-4-1024x382.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-4-1024x382.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-4-1024x382.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-4-1024x382.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-4-1024x382.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/bybt_chart-6-4-1024x382.png?w=1340 1340w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Coinglass</figcaption></figure></div>


<p>After a long chop sideways in Q3, the launch of a US-based bitcoin futures backed ETF product in <a href="https://cms.blockworks.co/first-bitcoin-strategy-etf-puts-btc-in-overdrive-price-tops-64k-markets-wrap/" target="_blank" rel="noreferrer noopener">October</a> sparked another rally to fresh all-time highs.</p>



<p>The <a href="https://coinmetrics.substack.com/p/state-of-the-network-issue-134" target="_blank" rel="noreferrer noopener">Coin Metrics report</a> continues: &#8220;By October 19th BTC price topped $64K, surpassing Q2’s top and setting a new all-time high. Q4 also ushered in Bitcoin’s biggest upgrade in four years: Taproot. Taproot introduced new scripting possibilities and laid the foundation for new smart contract functionality, while improving Bitcoin’s security and privacy. So far, about&nbsp;<a href="https://txstats.com/dashboard/db/taproot-statistics?orgId=1&amp;from=now-30d&amp;to=now">1.6K BTC has been stored in Taproot P2TR outputs</a>&#8220;.  </p>



<h3>Bitcoin today</h3>



<p>BTC was last trading near $48,650, up ~5.20% on the day, according to data from <a href="https://www.coingecko.com/en" target="_blank" rel="noreferrer noopener">Coingecko</a>. Some traders are pointing to the possibility of a short squeeze on the heels of <a href="https://app.laevitas.ch/dashboard" target="_blank" rel="noreferrer noopener">mixed perpetual funding</a> rates and rising stablecoin-margined open interest when compared to flat coin-margined open interest.</p>



<p>@bit_hedge noted on <a href="https://twitter.com/bit_hedge/status/1473268340445618180?s=20" target="_blank" rel="noreferrer noopener">Twitter</a>, &#8220;We&#8217;ve seen this picture before,&#8221; alluding to a similar setup today as the beginning of the end-of-summer rally seen earlier this year. </p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@bit_hedge-1024x576.png" alt="" class="wp-image-13008" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@bit_hedge-1024x576.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@bit_hedge-1024x576.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@bit_hedge-1024x576.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@bit_hedge-1024x576.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@bit_hedge-1024x576.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@bit_hedge-1024x576.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@bit_hedge-1024x576.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@bit_hedge-1024x576.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@bit_hedge-1024x576.png?w=1920 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: @bit_hedge</figcaption></figure></div>


<h3>Other key metrics from 2021</h3>



<p>On-chain highlights for BTC, ETH, Tether and USDC over the course of 2021 can be found in the table below:</p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="670" height="467" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.42.50-PM.png" alt="" class="wp-image-13009" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.42.50-PM.png?w=670 670w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.42.50-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.42.50-PM.png?w=369 369w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.42.50-PM.png?w=374 374w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.42.50-PM.png?w=314 314w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-12.42.50-PM.png?w=80 80w" sizes="(max-width: 670px) 100vw, 670px" /><figcaption class="wp-element-caption">Source: Coin Metrics </figcaption></figure></div>


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



<p>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:</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="337" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.43.50-PM-1024x337.png" alt="" class="wp-image-13014" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.43.50-PM-1024x337.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.43.50-PM-1024x337.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.43.50-PM-1024x337.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.43.50-PM-1024x337.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.43.50-PM-1024x337.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.43.50-PM-1024x337.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.43.50-PM-1024x337.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.43.50-PM-1024x337.png?w=1224 1224w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Ethereum Projects</figcaption></figure></div>

<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="280" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.44.04-PM-1024x280.png" alt="" class="wp-image-13015" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.44.04-PM-1024x280.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.44.04-PM-1024x280.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.44.04-PM-1024x280.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.44.04-PM-1024x280.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.44.04-PM-1024x280.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.44.04-PM-1024x280.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.44.04-PM-1024x280.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-21-at-2.44.04-PM-1024x280.png?w=1196 1196w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Solana Projects </figcaption></figure></div>


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



<hr class="wp-block-separator has-css-opacity"/>



<p><strong>Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.</strong></p>



<hr class="wp-block-separator has-css-opacity"/>


BTC Attempts End-of-Year Rally: Markets Wrap

<div id="highlights-block_617725d07bf3f" class="highlights">
        <ul>
                <li>Digital asset investment products saw first week of outflows in over 4 months</li>
                <li>Terra becomes the second largest layer-1 chain when measured by TVL</li>
            </ul>
    
</div>



<p>Digital asset investment products saw first week of outflows in over four months, according to a CoinShares <a href="https://coinshares.com/research/digital-asset-fund-flows">report</a>.</p>



<p>Terra becomes the second largest layer-1 chain when measured by TVL, according to DeFi Llama.</p>



<p>Margined open interest on BTC is more heavily weighted towards stablecoin margined open interest, implying a healthier market structure.</p>



<h3><strong>Latest in Macro:</strong></h3>



<ul><li>S&amp;P 500: 4,568, -1.14%</li><li>NASDAQ: 14,980, -1.24%</li><li>Gold: $1,789, -0.60%</li><li>WTI Crude Oil: $68.66, -3.10%</li><li>10-Year Treasury: 1.429%, +0.027%</li></ul>



<h3><strong>Latest in Crypto:</strong></h3>



<ul><li>BTC: $47,291, +0.91%</li><li>ETH: $3,943, +0.14%</li><li>ETH/BTC: 0.0833, -0.98%</li><li>BTC.D: 40.57%, +0.49%</li></ul>



<h3>Crypto investment products see outflows </h3>



<p>Digital asset investment products saw outflows totaling US$142m for the week ending on December 17th, the first outflow following a 17 week run of inflows, according to CoinShares latest fund flows <a href="https://coinshares.com/research/digital-asset-fund-flows" target="_blank" rel="noreferrer noopener">report</a>. The largest previous outflow took place in June of 2021 where weekly outflows totaled $97 million. </p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="769" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-2.47.55-PM-1024x769.png" alt="" class="wp-image-12976" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-2.47.55-PM-1024x769.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-2.47.55-PM-1024x769.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-2.47.55-PM-1024x769.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-2.47.55-PM-1024x769.png?w=342 342w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-2.47.55-PM-1024x769.png?w=347 347w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-2.47.55-PM-1024x769.png?w=292 292w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-2.47.55-PM-1024x769.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-2.47.55-PM-1024x769.png?w=1294 1294w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: CoinShares</figcaption></figure></div>



<p>The <a href="https://coinshares.com/research/digital-asset-fund-flows" target="_blank" rel="noreferrer noopener">report notes</a> that while the outflows appear alarming at first glance, there are a few key factors to consider for better context:</p>



<ul><li>The outflows come at a time when the Federal Reserve has signaled increased tapering of asset purchases and rate hikes in 2022, which has spurred outflows across all risk-on assets</li><li>Outflows only represent 0.23% of the total assets under management (AUM) versus the outflows seen in early 2018 at the start of the bear market, which were equal to 1.60% of AUM at the time.</li><li>Inflows peaked at $9.5 billion for 2021 versus the total inflows of $6.7 billion seen in 2020, marking a record year of inflows for digital asset investment products.</li></ul>



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="932" height="648" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.20.05-PM.png" alt="" class="wp-image-12980" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.20.05-PM.png?w=932 932w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.20.05-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.20.05-PM.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.20.05-PM.png?w=370 370w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.20.05-PM.png?w=375 375w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.20.05-PM.png?w=315 315w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.20.05-PM.png?w=80 80w" sizes="(max-width: 932px) 100vw, 932px" /><figcaption>Source: CoinShares</figcaption></figure>



<p>Bitcoin products saw outflows equal to $89.2 million, which was enough to push month-to-date flows into negative territory.</p>



<p>Ethereum investment products saw record outflows last week, totaling $64 million according to the CoinShares <a href="https://medium.com/coinshares/volume-59-digital-asset-fund-flows-weekly-5a107746bc52" target="_blank" rel="noreferrer noopener">report</a>.</p>



<p>While the two blue-chip digital assets saw outflows from investment vehicles, Solana, Polkadot, Cardano, Ripple and others saw net inflows despite the volatility seen in the digital assets market over the past few weeks.</p>



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="702" height="590" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.26.51-PM.png" alt="" class="wp-image-12981" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.26.51-PM.png?w=702 702w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.26.51-PM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.26.51-PM.png?w=306 306w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.26.51-PM.png?w=311 311w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.26.51-PM.png?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-3.26.51-PM.png?w=80 80w" sizes="(max-width: 702px) 100vw, 702px" /><figcaption>Source: CoinShares</figcaption></figure></div>



<h3>Terra (LUNA) climbs to number 2 chain by TVL</h3>



<p>Terra (LUNA) ousted Binance Smart Chain (BSC) and Avalanche (AVAX) over the weekend to become the second largest layer-1 chain when measured by total value locked (TVL). Terra currently boasts $17.66 billion of TVL according to data from <a href="https://defillama.com/chains" target="_blank" rel="noreferrer noopener">DeFi Llama</a>. The large increase in TVL can be attributed to the liquidity bootstrapping phase for a new DEX on Terra, <a href="https://lockdrop.astroport.fi" target="_blank" rel="noreferrer noopener">Astroport</a>, that concluded over the weekend.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Terra-TVL-1024x576.jpg" alt="" class="wp-image-12983" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Terra-TVL-1024x576.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Terra-TVL-1024x576.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Terra-TVL-1024x576.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Terra-TVL-1024x576.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Terra-TVL-1024x576.jpg?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Terra-TVL-1024x576.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Terra-TVL-1024x576.jpg?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Terra-TVL-1024x576.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Terra-TVL-1024x576.jpg?w=80 80w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: DeFi Llama</figcaption></figure></div>



<h3>BTC note</h3>



<p>The percentage of BTC supply held of centralized exchanges is hovering near 3-year lows, according to data from <a href="https://studio.glassnode.com/metrics?a=BTC&amp;category=Exchanges&amp;m=distribution.BalanceExchangesRelative&amp;modal=loginForm&amp;s=1517529508&amp;u=1639958400&amp;zoom=" target="_blank" rel="noreferrer noopener">Glassnode</a>.</p>



<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_bitcoin-percent-balance-on-exchanges-all-exchanges-2-1024x576.png" alt="" class="wp-image-12984" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-percent-balance-on-exchanges-all-exchanges-2-1024x576.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-percent-balance-on-exchanges-all-exchanges-2-1024x576.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-percent-balance-on-exchanges-all-exchanges-2-1024x576.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-percent-balance-on-exchanges-all-exchanges-2-1024x576.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-percent-balance-on-exchanges-all-exchanges-2-1024x576.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-percent-balance-on-exchanges-all-exchanges-2-1024x576.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-percent-balance-on-exchanges-all-exchanges-2-1024x576.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-percent-balance-on-exchanges-all-exchanges-2-1024x576.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/glassnode-studio_bitcoin-percent-balance-on-exchanges-all-exchanges-2-1024x576.png?w=1800 1800w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: Glassnode </figcaption></figure>



<p>&#8220;There are two types of BTC derivatives: BTC/crypto margined and stablecoin/USD margined,&#8221; <a href="https://twitter.com/DylanLeClair_/status/1472996720669863944?s=20" target="_blank" rel="noreferrer noopener">wrote</a> on-chain analyst, Dylan LeClair. &#8220;BTC margined longs are unfavorable versus stablecoins during a market downturn because as asset prices fall traders using BTC as collateral are liquidated.&#8221; </p>



<p>As seen in the below chart, stablecoin margined open interest is outpacing BTC/crypto margined open interest which is seen as a healthier market structure.</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="771" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@DylanLeClair_-1024x771.png" alt="" class="wp-image-12985" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@DylanLeClair_-1024x771.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@DylanLeClair_-1024x771.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@DylanLeClair_-1024x771.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@DylanLeClair_-1024x771.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@DylanLeClair_-1024x771.png?w=341 341w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@DylanLeClair_-1024x771.png?w=346 346w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@DylanLeClair_-1024x771.png?w=291 291w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@DylanLeClair_-1024x771.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@DylanLeClair_-1024x771.png?w=1634 1634w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: @DylanLeClair_</figcaption></figure></div>



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



<p>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:</p>



<div class="wp-block-image"><figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="328" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.21-PM-1024x328.png" alt="" class="wp-image-12986" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.21-PM-1024x328.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.21-PM-1024x328.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.21-PM-1024x328.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.21-PM-1024x328.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.21-PM-1024x328.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.21-PM-1024x328.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.21-PM-1024x328.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.21-PM-1024x328.png?w=1223 1223w" 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="287" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.10-PM-1024x287.png" alt="" class="wp-image-12987" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.10-PM-1024x287.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.10-PM-1024x287.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.10-PM-1024x287.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.10-PM-1024x287.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.10-PM-1024x287.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.10-PM-1024x287.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.10-PM-1024x287.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-20-at-4.23.10-PM-1024x287.png?w=1196 1196w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Top Solana Projects </figcaption></figure></div>



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



<hr class="wp-block-separator"/>



<p><strong>Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.</strong></p>



<hr class="wp-block-separator"/>


Digital Asset Investment Products See First Outflows in 17 Weeks: Markets Wrap

<div id="highlights-block_777e5ae7693e7cfe33ace5a1c8c3190d" class="highlights">
        <ul>
                <li>Altcoins are getting hit hard as BTC and ETH fail to garner positive momentum</li>
                <li>The reduction in derivates open interest for BTC can be viewed as a silver lining</li>
            </ul>
    
</div>



<p>BTC and ETH struggles fuel large altcoin sell-off.</p>



<p>BTC market structure looks healthier than the May 2021 correction.</p>



<p>Futures open interest and perpetual funding rates for BTC have retraced to healthier levels. </p>



<p><a href="https://blockworks.co/price/eth">ETH</a> has lost key areas of support but may prove to outperform in the next bear market by being a more productive asset than <a href="https://blockworks.co/price/btc">BTC</a>, according to some industry experts.</p>



<p>NFT floor prices have risen over the last 24 hours, but this is likely due to the price correction in the assets they are denominated in, i.e. ETH and <a href="https://blockworks.co/price/sol">SOL</a>.</p>



<h3><strong>Latest in Macro:</strong></h3>



<ul>
<li>S&amp;P 500: 4,668, -0.91%</li>



<li>NASDAQ: 15,413, -1.39%</li>



<li>Gold: $1,786, +0.19%</li>



<li>WTI Crude Oil: $71.24, -0.60%</li>



<li>10-Year Treasury: 1.414%, -0.075%</li>
</ul>



<h3><strong>Latest in Crypto:</strong></h3>



<ul>
<li><a href="https://blockworks.co/price/btc">BTC</a>: $46,527, -7.41%</li>



<li><a href="https://blockworks.co/price/eth">ETH</a>: $3,735, -10.01%</li>



<li>ETH/BTC: 0.0803, -2.61%</li>



<li>BTC.D: 42.00%, +1.08%</li>
</ul>



<h3>Altcoins getting hammered</h3>



<p>Altcoins are treading water on the heels of weakness in BTC and ETH price action. Market sentiment is poor according to <a href="https://alternative.me/crypto/fear-and-greed-index/" target="_blank" rel="noreferrer noopener">alternative.me</a>, with the crypto fear and greed index sitting at 28. The benchmark is on a 100-point scale where 0 indicates fear and 100 indicates greed. </p>



<p>BTC is seen as one of today&#8217;s &#8216;top gainers&#8217; according to data from <a href="https://app.laevitas.ch/dashboard/derivs/topGL/movers/gainers" target="_blank" rel="noreferrer noopener">laevitas.ch</a>, despite being down roughly 7.5% over the past 24 hours. BTC dominance, or the percent of the total crypto market cap that BTC comprises, is up approximately 1.10% according to data from <a href="https://www.tradingview.com/symbols/CRYPTOCAP-BTC.D/" target="_blank" rel="noreferrer noopener">TradingView</a>.</p>



<p>The top 25 losers over the past 24 hours can be found in the table below provided by laevitas, showing that altcoins are taking the recent dip especially hard. Some coins have seen their market caps drop by nearly 25%. </p>



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="434" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png" alt="" class="wp-image-12517" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-2.44.24-PM-1024x434.png?w=1237 1237w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Laevitas.ch</figcaption></figure>



<h3>BTC today vs. May 2021</h3>



<p>After trading north of $50,000 last night, BTC has since corrected and briefly traded below $46,000 according to data from <a href="https://coinmarketcap.com/currencies/bitcoin/" target="_blank" rel="noreferrer noopener">coinmarketcap</a>. </p>



<p>This correction shows different patterns in BTC exchange flows when compared to the correction in May of 2021, according to a <a href="https://insights.glassnode.com/the-week-onchain-week-50-2021/" target="_blank" rel="noreferrer noopener">Glassnode report</a>. Between May and July roughly 168,000 BTC were moved onto exchanges signaling long-term holder selling. The correction is seen from the end of October through today, more than 45,000 BTC has moved off of centralized exchanges signaling investor accumulation.</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="585" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png" alt="" class="wp-image-12520" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=457 457w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=383 383w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.15.55-PM-1024x585.png?w=1185 1185w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Glassnode</figcaption></figure></div>


<p>Net Unrealized Profit/Loss (NUPL) provides a gauge for how much of the BTC supply is being held in unrealized profit or loss. 50% has historically been a battleground for the bulls versus the bears. </p>



<p>&#8220;Per this chart, the current leg down in price seems to resemble a correction within a larger bull trend &#8211; a stark contrast to May where NUPL sliced cleanly through the 50% level,&#8221; states the aforementioned Glassnode report. &#8220;It is possible that this trading range is defining the bull-bear line in the sand, and a key risk is whether a possible transition into less favorable conditions occurs should it fail to hold.&#8221;</p>



<p>The BTC NUPL was unable to hold the line during May, which led to further downside. It remains to be seen whether the bulls can hold the line this time around. </p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="575" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png" alt="" class="wp-image-12522" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=465 465w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.19.16-PM-1024x575.png?w=1172 1172w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Glassnode</figcaption></figure></div>


<h3>BTC derivatives</h3>



<p>The current BTC market structure and <a href="https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm" target="_blank" rel="noreferrer noopener">tomorrow&#8217;s FOMC meeting</a> make for a shaky outlook for price action, but one silver lining is the reduction in open interest in the derivatives market. </p>



<p>A high amount of futures open interest increases the possibility of a large move where traders have their short or long positions wiped out. &#8220;This influence of futures markets on price is particularly dominant during periods where Futures Open Interest climbs above the 380k BTC level,&#8221; states the <a href="https://insights.glassnode.com/the-week-onchain-week-50-2021/" target="_blank" rel="noreferrer noopener">Glassnode report</a>.</p>



<p>Futures open interest has declined to healthy levels and has yet to spike back up as seen in May of 2021 before the correction below $30,000. Data from <a href="https://app.laevitas.ch/dashboard" target="_blank" rel="noreferrer noopener">laevitas.ch</a> shows perpetual funding rates are only slightly positive, which reaffirms the notion that there is less aggressive dip buying in the BTC derivates market.</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="575" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png" alt="" class="wp-image-12524" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=465 465w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.26.55-PM-1024x575.png?w=1172 1172w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Blockware Intelligence</figcaption></figure></div>


<p>Another note in relation to perpetuals includes the decline in open interest compared to the <a href="https://blockworks.co/price/btc">BTC market cap</a>. When this ratio is declining, the market is more heavily spot-driven and less dictated by the derivatives market, according to <a href="https://insights.glassnode.com/the-week-onchain-week-50-2021/" target="_blank" rel="noreferrer noopener">Glassnode</a>. </p>



<p>The recent correction saw a healthy leverage washout, but not as drastic as the one seen in May of 2021. This tells investors that while a lot of leverage has been wiped out and the market is being more heavily influenced by spot demand, a grind lower could still lead to more liquidations and a volatile movement to the downside.</p>



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="571" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png" alt="" class="wp-image-12529" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=468 468w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-3.48.18-PM-1024x571.png?w=1172 1172w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: Glassnode</figcaption></figure>



<h3>Ethereum note</h3>



<p>ETH has been making lower highs and lower lows in recent weeks, which is seen as a bearish market structure. It has also lost the previous closing high seen in May of 2021, which reaffirms the bear case.</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="640" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg" alt="" class="wp-image-12532" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=411 411w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=418 418w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=350 350w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/@Pentosh1-1024x640.jpg?w=1440 1440w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Source: @Pentosh1</figcaption></figure></div>


<p>On a positive note, some prominent investors in the space believe that the next crypto bear market will be more kind to productive assets or assets that provide a yield, such as ETH, and be harsher on non-productive assets such as BTC.</p>



<p>&#8220;A small percentage of capital in the world is non-productive. Fiat cash is ~$100T and Gold is ~$10T. Public and private equity, debt, and real estate are at least 100x larger,&#8221; <a href="https://twitter.com/KyleSamani/status/1470144093439336451?s=20" target="_blank" rel="noreferrer noopener">wrote</a> Kyle Samani, co-founder of Multicoin Capital. &#8220;The world actually does not care about non-productive assets. This is why I expect SOL and ETH to substantially outperform BTC through the next &#8216;bear market&#8217;. The tech money doesn’t care about macro. They just want to be long the stuff that they think is going to change the world&#8221;.</p>



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



<p>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:</p>


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="328" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png" alt="" class="wp-image-12533" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.42-PM-1024x328.png?w=1226 1226w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Ethereum Projects</figcaption></figure></div>

<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1024" height="285" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png" alt="" class="wp-image-12534" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Screen-Shot-2021-12-13-at-4.14.50-PM-1024x285.png?w=1197 1197w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Top Solana Projects </figcaption></figure></div>


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



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