Source: Coinbase&Glassnode,Compiled ：BitpushNews Yanan
The total market value of cryptocurrency is an important indicator that reflects the market value of global digital assets, covering Bitcoin (BTC), Ethereum (ETH), tokens and stablecoins, etc. In 2023, driven by the strong performance of Bitcoin and Ethereum, the total market value of cryptocurrencies increased by more than 108%.
Cryptocurrency dominance measures a specific The market capitalization of a cryptocurrency as a percentage of the total market capitalization of all cryptocurrencies. In 2023, Bitcoin’s dominance increased as the market became increasingly bullish on the prospect of Bitcoin spot ETF approval and funds moved to high-quality assets. Some market participants also view Bitcoin’s April 2024 halving as a potential price increase catalyst.
Historically, cryptocurrencies have Categories are less relevant. 2022 was an exception, when almost all assets fell simultaneously, but the market returned to historical normality in 2023, indicating that cryptocurrencies will become one of the sources of non-systemic risks.
Allocation to cryptocurrencies helps traditional investing The portfolio diversifies risk and increases returns. In this table, we analyze the 60% MSCI ACWI (Translator's Note: MSCI ACWI is a global stock launched by Morgan Stanley Capital International (MSCI) Index, the full name is MSCI All Country World Index.) and 40% of the US Agg (Translator's Note: Refers to a broad index of the US bond market, the full name is "Bloomberg Barclays US Aggregate Bond Index".), The effect of a small amount of configuration of Coinbase Core Index (COINCORE). COINCORE is a market capitalization-weighted cryptocurrency index that is rebalanced quarterly, with Bitcoin and Ethereum accounting for 65.3% and 28.7%, respectively, and a combined total of nearly 94%. The set period is from March 2018 to October 2023, covering the two main fluctuation cycles of the cryptocurrency market. The results show that after adding COINCORE, the absolute return and risk-adjusted return of the investment portfolio are improved.
Stablecoin is a currency designed to A digital currency that maintains stable value. They are usually pegged to the U.S. dollar or other fiat currencies at a fixed exchange rate of 1:1 and hold corresponding reserve assets. Stablecoins backed by fiat currencies dominate the stablecoin market. When evaluating stablecoins, market participants should focus on the quantity and type of reserve assets.
In 2023, the price of Bitcoin will increase by more than 155%. Market participants are encouraged by a number of factors, including a slowing pace of inflation and an increased likelihood of approval for spot cryptocurrency exchange-traded funds (ETFs).
Bitcoin has It has gone through four complete bull and bear cycles. In this chart, we can observe how the current market cycle, which begins in 2022, compares to previous cycles.
Net unrealized profit or loss (NUPL) is the difference between relative unrealized profits and relative unrealized losses. Adjusted NUPL excludes transactions between addresses of the same entity (“internal” transactions) to more accurately measure real economic activity and provide more optimized market signals than unadjusted NUPL.
Cryptocurrency’s circulating supply increased by losses Composed of supply (all currencies with a cost basis higher than the current spot price) and profitable supply (all currencies with a cost basis lower than the current spot price). Observing supply profitability can help reveal where cryptocurrency prices are in the current market cycle. Previous cryptocurrency market cycles have been characterized by three phases:
Bottom Discovery Period:In the final stages of a bear market, when the long-term When price depreciation causes the proportion of loss-making supply to increase (the percentage of profitable supply is <55%).
Mania Period: During a bull market, when prices exhibit a parabolic upward trend, the proportion of profitable supply dominates (profitable Supply percentage >95%).
Bull-bear transition period: The transition period between the bottom discovery period and the mania period, when supply profitability is closer Equilibrium state (profitable supply percentage between 55% and 95%).
The number of active addresses refers to The number of unique addresses that remain active as senders or receivers on a network is a critical metric for measuring user acceptance, network health, and economic activity.
Although the number of active addresses is one Important metric, but a single entity can have multiple addresses, so we also need to focus on the number of active entities. An entity is defined as a set of address clusters controlled by the same network entity, which are estimated through advanced heuristics and Glassnode's proprietary clustering algorithm. Here, "advanced heuristics" refer to a sophisticated method or technique based on experience, knowledge, and observation patterns for making estimates or decisions with incomplete information.
Glassnode Long-term holders (LTHs) are defined as investors who have held cryptocurrencies for at least 155 days. This holding period usually means the assets are less likely to be sold. Therefore, observing the activity patterns of long-term holders can be an effective indicator of predicting cyclical fluctuations in the cryptocurrency market, helping to identify potential peaks and troughs.
As cryptocurrencies As the asset class matures and institutional participation increases, its volatility has shown a steady downward trend.
This chart uses Bollinger Bands Analyze one month's realized volatility to identify potential volatility turning points. If volatility deviates more than one standard deviation from the one-month mean, a reversal is more likely.
Realized price refers to crypto The average price of the currency supply, calculated as the value of each currency on the day of its last on-chain transaction; it is often considered the market’s on-chain cost basis. MVRV is the abbreviation of Market Value to Realized Value; it represents the ratio between market value (spot price) and realized value (realized price). An MVRV of 2.0 means the current price is twice the market's average cost basis (the average holder makes twice as much profit).
An MVRV of 1.0 means that the current price is equal to the market's average cost basis (the average holder is at the break-even point).
An MVRV of 0.50 means that the current price is 50% lower than the market's average cost basis (the average holder loses 50%).
Extreme MVRV values can reveal periods when the market is overheated or undervalued, as well as periods when investor profits are well above or below the average (i.e., realized price) .
This chart shows the MVRV ratio and the The six-month simple moving average (SMA) of the momentum indicator. Periods in which the MVRV is above the six-month SMA generally describe an uptrend in the macro market, while periods below the line generally describe a downtrend.
Cycle turning points are usually represented by a strong breakout of the six-month SMA by MVRV. A strong breakout above the SMA indicates a large amount of BTC was acquired at levels below the current price, while a strong breakout below the SMA indicates a large amount of BTC was acquired at a level above the current price.
Although perpetual futures are BTC The main force in futures trading, but traditional futures still occupy an important position in BTC futures open interest due to their wide application in hedging and spot arbitrage trading.
Cryptocurrency Basis in the market has historically been positive (except for market dislocations). Extreme swings in basis, whether positive or negative, are often associated with large swings in market sentiment.
There is no setting for perpetual futures The expiration date is fixed, so the holder does not need to perform rollover operations. In order to maintain a reasonable gap between the price and the spot price, perpetual futures introduces a funding rate mechanism. This rate periodically shifts between longs and shorts: longs pay shorts when the funding rate is positive; shorts pay longs when the funding rate is negative.
Liquidation refers to the exchange’s futures due to The position's initial margin is partially or completely lost and the position is forced to be liquidated. Massive liquidations could signal the top or bottom of a sharp price move.
As institutional investors There has been an increase in options open interest for 2023 as investors are increasingly entering this space. In October 2023, BTC options’ open interest exceeded BTC futures for the first time.
Bitcoin futures are provided by multiple exchanges Available in different sizes and denominations.
We predict that the upcoming Bitcoin halving in the second quarter of 2024 may boost the performance of the token. Still, this association is speculative because supporting evidence is limited. There have only been three halvings in history, and a completely clear pattern has yet to emerge, especially given that previous events were affected by a variety of factors, including global liquidity measures.
In 2023, the price of Ethereum (ETH) rose by more than 90%, thanks to the success of the Shapella upgrade and the prospect of approval of the cryptocurrency spot-traded open-end index fund (ETF). Market participants are encouraged by the growing clarity.
Ethereum has experienced Two complete bull-bear cycles. In this chart, we can observe how the current market cycle, which begins in 2022, compares to previous cycles.
Unrealized Net Profit and loss is the difference between relative unrealized profits and relative unrealized losses.
Cryptocurrency The circulating supply of is composed of losing supply (all coins with a cost basis higher than the current spot price) and profitable supply (all coins with a cost basis lower than the current spot price). Observing supply profitability can help reveal where cryptocurrency prices are in the current market cycle. Previous cryptocurrency market cycles have been characterized by three phases:
Bottom Discovery Phase: In the final phase of a bear market, when prices When depreciation causes the proportion of loss supply to increase (profit supply percentage <55%), the market enters the bottom discovery stage.
Mania Phase: When a parabolic upward price trend occurs during a bull market, the proportion of profitable supply dominates (profit supply Volume percentage > 95%), the market enters a feverish stage.
Bull-Bear Transition Phase: This is the transition period between the bottom discovery phase and the mania phase, when supply is in a profitable state Closer to equilibrium (profitable supply percentage between 55% and 95%).
Number of active addresses Refers to the number of unique addresses participating in the network as senders or receivers. It is an important indicator of user adoption, network health, economic activity, and more.
With crypto Volatility is on a steady downward trend as the currency matures as an asset class and institutional participation increases.
This chart uses layout Timberland analyzes one month's realized volatility to identify potential volatility turning points. If volatility deviates more than one standard deviation from the one-month mean, a reversal is more likely.
Realized Price refers to the average price of a cryptocurrency’s supply, calculated as the value of each coin on the day it was last traded on-chain; it is often considered the market’s on-chain cost basis. MVRV is the abbreviation of market capitalization to realized value ratio, which represents the ratio between market capitalization (spot price) and realized value (realized price).
An MVRV of 2.0 means that the current price is twice the market's average cost basis (the average holder makes twice as much profit).
An MVRV of 1.0 means that the current price is equal to the market's average cost basis (the average holder is at the break-even point).
An MVRV of 0.50 means that the current price is lower than 50% of the market's average cost basis (the average holder loses 50%).
Extreme MVRV values help identify periods of overheating or undervaluation of the market, as well as periods when investor profitability deviates significantly from the mean (realized price).
This chart illustrates MVRV Ratio and the six-month simple moving average (SMA) used as a momentum indicator. Periods in which MVRV is above the six-month SMA typically describe an uptrend in macro markets, while periods in which it is below typically describe a downtrend.
Cycle turning points are usually characterized by a strong breakout of the six-month SMA by MVRV. A strong breakout above the SMA indicates a large amount of ETH was purchased below the current price, while a strong breakout below the SMA indicates a large amount of ETH was purchased above the current price.
Pledge is proof of equity (PoS) An investment method in the blockchain where token holders secure the network by pledging assets and receive additional tokens as rewards. In order to stake ETH, holders need to stake at least 32 ETH and run a validator node.
Total Locked Value (TVL) is the total value of assets locked by smart contracts on the Ethereum blockchain or deposited in decentralized applications, covering ETH, stablecoins and various tokens. It is an important indicator for evaluating financial activities and liquidity within the Ethereum ecosystem.
Crypto futures trading volume is divided into traditional futures (also known as period or calendar futures) and perpetual futures (perps), the latter of which are cryptocurrencies. Unique. Perpetual futures have no expiration date, so holders do not need to roll over. The trading volume of Ethereum futures is dominated by perpetual futures.
Ethereum futures positions Mainly focused on perpetual futures, while the trading volume of traditional futures is relatively small.
Crypto The market's basis is usually positive. Its extreme fluctuations, whether positive or negative, are often closely linked to dramatic changes in market sentiment.
In order to maintain price and A reasonable gap in spot prices, perpetual futures introduces a funding rate mechanism. This rate periodically shifts between longs and shorts: longs pay shorts when the funding rate is positive; shorts pay longs when the funding rate is negative.
Open interest in Ethereum options hit an all-time high in the fourth quarter of 2023, as market participants became increasingly bullish on the prospects for spot ETFs and Ethereum’s development in 2024.
Ethereum futures by Offered by multiple exchanges, with varying sizes and denominations.
After the successful completion of the Shapella upgrade, the Ethereum community is eagerly awaiting the arrival of the Cancun (“Decun”) upgrade, which is expected to be implemented in the first quarter of 2024. The Cancun upgrade will mainly strengthen the scalability and security of the Ethereum network by introducing Proto-Danksharding . The design goal of Proto-Danksharding is to significantly reduce the fees for second-layer transactions and significantly increase the transaction processing capacity per second of the Ethereum network.
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