Commentary
Digital Assets ended the week -21% for the 2nd largest weekly decline of the year. Volume this week was more active for a daily average of $63B, +12% WoW. Declines this week were very broad based with only 10% of the top 200 coins and tokens ending the week higher.
Headlines this week looked to attribute the sell off to a number of items including allegations of CME price maniputalion and volatility in BTC hashrate statistics. The real reason, though, I think was simply a cathartic resolution to 4 months of price consolidation. The direction was probably set by the Trump Impeachment sell off in tradtional markets. BTC was clearly preparing to lead the market out of 4 months of triangular price consolidation, while we felt a break higher was more likely — a sharp move lower this week shouldn’t have been much of a surprise.
Bakkt’s launch was the focus of headlines in the first half of the week. Outside of that, top headlines included: 1) Venezuela’s Central Bank looking at custodying BTC, 2) BTC hashrate hitting a new all time high, 3) Zuckerberg turning cautious on Libra, 4) Gemini expanding its custody offering and 5) Bitfinex/Tether making headway in their NYAG case.
Despite a number of flashing oversold and inflection indicators (TD Sequential Red 9, Mayer Multiple of 0.96, RSI of 19 and a 50 Day Z Score of -2.9) this pull back could still separate fingers from hands. BTC is hovering just under 2 key levels — the 200 day moving average of around $8,300 and the 2018 full year VWAP $8,500. Next week will be key. If BTC can’t rally above $8,500 in the next few days then the mid term up trend is probbly at risk of breaking down.
News
- Venezuelan Central Bank explores storing BTC, ETH
– The country’s national oil provider (PSDV) has requested the central bank look into the possibility of custodying BTC and ETH to offset difficulties receiving payments cause by American sanctions
– Follows a Bloomberg article which claimed Venezuela has a stash of BTC - Listed BTC miner HUT 8 announces approval for listing on TSX
– The TSX is the 3rd largest stock exchange in North America
– HUT 8 is currently listed on the smaller TSX Venture exchange - Court rules Bitfinex/Tether can stop providing documents to NY AG
– iFinex, the parent company of Bitfinex, does not have to turn over documents to the New York State Attorney General (NYAG) for now, per a court order published on Tuesday - Trezor trading function to hardware wallets
– Harware wallets will link to exchange accounts and ‘conveniently [allow for the] exchange coins and tokens directly in your Wallet’ - BTC hashrate and daily transactions hit new all time highs
– 7 day average Hashrate hit a high of > 94M TH/s - Zuck: Facebook will take a cautious approach with Libra
– Zuck: “…his take many years to roll out…”
– Facebook is now taking a more cautious approach when bringing forward projects like Libra that are ” very sensitive for society,” allowing a period for consultation and “working through the issues.”
– So much for ‘move fast and break things’ - BTC sees single day $643 of long liquidations on BitMEX
– Delta Exchange offers a chart to track liquidation data here
– Motivated a cover of Avril Lavigne’s song ‘Complicated’ called ‘Liquidated’ - DAI stablecoin gets caught in the wake of ETH congestion
– Dai is an ‘algorithmic stablecoin’ supported by 150% maintenance margin. CDPs (collateralized debt position) will be liquidated/forced closed if your maintenance margin slips below 150%.
– Dai briefly lost its dollar peg, following collateral liquidations
– “the automation process failed to work properly due to Ethereum network overload. Collaterals were liquidated to cover for the extreme movement of ETH, which wiped out around 20% of its price in a rapid mid-week crash” - Gemini Custody expands its list of custody offerings
– Expands services in BTC, ETH, BCH, LTC, and ZEC to include more than a dozen ERC 20 tokens - BTC Lightning Network nodes passes 10,000
– For compairsion there are
9,322 BTC nodes, 6,425 ETH nodes, and 1,594 BCH nodes - Digibyte claims Binance wanted a listing fee of $300k and 3% of coins
- Crypto investment fund 1Confirmation has raises $45M for second fund
– Includes investors Peter Theil , Mark Cuban and Marc Andreessen - SEC’s Hearst: regulators should be less paternalistic
– “If you want a government that’s more forward-thinking on innovation, that means that if something goes wrong, you can’t go running back to the government and say ‘Hey, you didn’t protect me from myself!’ - Kik founder digs in hills on KIN token — will fight SEC to the end
– After 18 months have been asked to label KIN a security or go to court
– Feel that marking KIN a security would make it unuseable
– Have decided to take a stand and fight the SEC - Justin Sun promises to reschedule lunch with Warren Buffet
– Also hopes to work with Andrew Yang on UBI
Charts
Chart 1. On this day…
– BTC, LTC and BNB still at their best prices ever for this point in September
– Others down of peaks set in 2018 or earlier
Chart 2. Price change matrix
– Everything deep red over all periods
Chart 3. Price vs Volume
– Almost everything in the lower right — price declines on big volume
Chart 4. WoW % Change
Chart 5. Volume Z Score
Chart 5. Average daily volume — by month
– USDT, ETH, EOS, XRP and TRX all tracking up MoM
Chart 6. Average daily volume in top 3 actively traded
– Volume up after 3 months of consecutive declines
Chart 7. BTC vs Alt Coins
