Jay Hao is the CEO of crypto exchange OKEx.
After I awoke this morning, I acquired many messages from my pals, who instructed me, “Stocks have skyrocketed. Can we quick bitcoin (BTC)?” Then I opened my Bloomberg and noticed the next chart. The Shanghai Shenzhen CSI 300 Index has reached its highest stage in almost a 12 months. And the financial restoration in mainland China has pushed Hong Kong stocks to rise, with the Hong Kong Dangle Seng Index reaching a brand new excessive since April. Even Nasdaq has reached a document excessive. That is actually loopy, proper?
So again to our query, ought to we quick bitcoin now? I feel we will discover solutions from the information. First, let us take a look at the buying and selling quantity on exchanges. The information from Cryptocompare reveals that spot buying and selling quantity has reached a brand new low for half a 12 months. Particularly because the starting of May, it may be clearly seen that the buying and selling quantity has continued to say no.
Spot Change Whole Quantity
This isn’t solely the case in the case of spot buying and selling quantity. Analyzing knowledge from Skew reveals that BTC futures buying and selling quantity is continuous to say no too, this decline additionally started in May.
BTC Futures – Aggregated Each day Volumes
The value of bitcoin derivatives is principally mirrored in hedging market dangers. Whether or not it’s bitcoin futures or bitcoin choices, there’s a sturdy buying and selling demand during times of excessive volatility. The decline in BTC futures buying and selling quantity is principally because of the continued decline in BTC volatility. Knowledge from Coin Metrics reveals that bitcoin’s 30-day volatility reached its lowest stage in a 12 months.
Bitcoin 30D Volatility vs Bitcoin price
The downturn in BTC spot and futures buying and selling volumes appears to counsel that we may quick bitcoin. However, not so quick. Let’s proceed to have a look at extra knowledge.
Along with buying and selling quantity on exchanges, over-the-counter (OTC) buying and selling can also be an important indicator within the crypto market. It’s because the buying and selling quantity on exchanges may be fraudulent, making OTC buying and selling quantity extra reliable. Knowledge from Coin.dance reveals that quantity on the 2 main OTC buying and selling platforms, Paxful and Localbitcoins, has not decreased considerably. Even on Paxful, because of the impression of the epidemic and the fluctuation of the fiat foreign money Exrates, the OTC buying and selling quantity has elevated considerably.
Weekly LocalBitcoins Quantity (World)
Weekly Paxful Quantity(World)
After speaking about exchanges and OTC buying and selling knowledge, let’s check out the on-chain buying and selling knowledge. Not like the earlier two, on-chain knowledge typically represents the wants of extra rational teams. To a sure extent, the on-chain knowledge represents the underlying help of bitcoin costs. The information from Glassnode clearly reveals that the variety of bitcoin on-chain transactions has remained at a median stage for almost a 12 months.
Bitcoin: Transaction Rely
This might counsel that the established order of bitcoin just isn’t as unhealthy as you suppose. There’s additionally another indicator that may offer you extra confidence, and that’s the Stablecoin Provide Ratio (SSR). The Stablecoin Provide Ratio (SSR) is the ratio between bitcoin provide and stablecoins provide, or: Bitcoin Marketcap/Stablecoin Marketcap. When the SSR is low, the present stablecoin provide has extra “shopping for energy” to buy BTC. Knowledge from Glassnode reveals that the SSR indicator has refreshed its minimal since final 12 months.
Bitcoin: Stablecoin Provide Ratio (SSR)
Total, the surge within the stock markets may certainly result in the lack of funds within the crypto market and be behind the decline in buying and selling exercise. Nonetheless, from the OTC and on-chain buying and selling perspective, bitcoin’s reputation has not decreased. And from the SSR, BTC even has its strongest upward momentum in a 12 months. The shift of consideration brought on by the rise of different funding merchandise is simply momentary and, as a person investor, I’m nonetheless very optimistic in regards to the return of bitcoin as a wholesome funding.