Weekly Report

20th May 2021

A Capricious Shift in Public Opinion has Exacerbated Market Volatility

Abstract: US inflation exceeded expectations. Elon Musk’s shift in attitude towards Bitcoin has exacerbated market volatility. The overall market rally can still be expected.

  • Total market value declined. Last week, the total market value of digital assets fell significantly from US$2.43 trillion to US$2.17 trillion. Bitcoin tumbled from US$58,000 to its new low since March at US$42,735 on Monday.
  • Most of the top 100 digital assets fell. Last week, among the top 100 digital assets, 25 staged growth, while 75 witnessed decline.
  • Bitcoin’s hash rate decreased. The average hash rate of Bitcoin declined week-on-week. The weekly average hash rate was about 167.48EH/s, down 6.5%.
  • Bitcoin’s on-chain activity grew and Ethereum’s on-chain activity decreased. The Bitcoin network saw a 6.31% decrease, 6.91% decrease and 8.38% increase in average number of transfers, number of active addresses and average transfer amount respectively. In the Ethereum network, the average number of on-chain transactions grew 0.39%, with the number of active addresses up by 2.86% and average on-chain transaction amount down by 34.63%.
  • Stock exchanges posted a combined 2.5% decline in turnover. Last week, turnover on the 10 exchanges tracked by us decreased by 2.5% week-on-week. Binance fell 7.6%. Bitfinex, Bitstamp and Coinbase all recorded an increase of 31.2%, 13.6% and 23.4%, respectively.
  • Open position in futures fell to US$18.2 billion. Last week, turnover of Bitcoin futures market increased 38.7% week-on-week, with open position down to US$18.2 billion.
  • Bitcoin and stablecoin rose to US$87.6 billion. Last week, turnover of USDT increased by US$2.4 billion. USDC and BUSD remained unchanged.

 

  • A capricious shift in public opinion has exacerbated market volatility. Last Wednesday, inflation expectation casted an impact on macro liquidity. An even greater impact on the market can be seen from Elon Musk’s shift in attitude towards Bitcoin on Twitter, making the market stabilizer unstable. Seeing weakness in the first half of last week, the new Altcoin has now subsided. Some traders are starting to bet on a decline in the options market, and a recovery is more likely if these short positions could be released at the maturity date of options by the end of the month. The market bottomed out on Monday and then rebounded strongly, showing its good resilience.

 

Digital Currency Market Capitalization Change:

Source: HashKey Capital Research, Coin360

 

Bitcoin Futures Daily Trading Volume:

Source: HashKey Capital Research, The Block

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