Bitcoin stays out of fear for 11 straight days as price tips near 24K

January 30, 2023 Coin Telegraph

bull trap

Bitcoin's huge price surge in January has meant that 64% of Bitcoin investors are in profit, according to data from IntoTheBlock.

Bitcoin (BTC) has just clocked its 11th consecutive day outside the “Fear” zone in the Crypto Fear and Greed Index, cementing its longest streak out of fear since last March.

Bitcoin Fear and Greed Index is 61 - Greed
Current price: $23,780 pic.twitter.com/U5gxN3AwnT
— Bitcoin Fear and Greed Index (@BitcoinFear) January 30, 2023

This comes as Bitcoin hit $23,955 at 8:10 pm UTC time on Jan. 29, its highest level of the year. It has since come back down slightly, to $23,687 at the time of writing.

Meanwhile, Bitcoin sentiment is currently sitting firmly in the “Greed” zone with a score of 61, its highest level since the height of the bull run around Nov. 16, 2021, when its price was about $65,000.

*Bitcoin Fear and Greed Index over the last 12 months. Source:* *Crypto Fear and Greed Index.*

However, despite Bitcoin’s strong resurgence in recent weeks, market participants continue to debate whether the recent price surge is part of a bull trap or whether there is a real chance for a bull run.

Regardless, the current rally has pushed a lot more BTC holders back into the green.

According to data from blockchain intelligence platform IntoTheBlock, 64% of Bitcoin investors are now in profit.

Those who first bought BTC back in 2019 are now — on average — back in profit too, according to on-chain analytics platform Glassnode.

We can calculate the average acquisition price for #Bitcoin by tracking exchange withdrawals.

The chart below shows the average withdrawal price for investors for each year.

The average class of 2019+ $BTC is now back in profit (at $21.8k)

Live Chart: https://t.co/yuhvydV70c pic.twitter.com/skjrM6w5lH
— glassnode (@glassnode) January 29, 2023

The average first-time buy price for BTC investors in 2019 was $21,800, which means those investors are on average up about 9% at the Jan. 29 price of $23,687.

Meanwhile, a Jan. 29 poll from crypto market platform CoinGecko has revealed that 57.7% of 3,725 voters believe BTC will exceed $25,000 this week, while only 21.2% of voters believe BTC is primed for a pullback below $22,000.

*A CoinGecko poll on BTC price prediction for the upcoming week. Source:* *CoinGecko*

The founder and CEO of Vailshire Capital, Dr. Jeff Ross, also provided a technical analysis of his own on Jan. 29, suggesting that a price surge toward $25,000 in the short term may be on the cards:

The strength of #bitcoin on the 4-hour charts continues to be impressive.

While price action has trended sideways for over a week, short term indicators (MACD, RSI) have once again reset... and are now ramping higher.

A price surge to ~$25k is probable.

(Not investment advice) pic.twitter.com/QaPbNrxtxZ
— Dr. Jeff Ross (@VailshireCap) January 29, 2023

Other analysts have called for excited investors to taper some of their expectations, however.

Head analyst Joe Burnett of Bitcoin mining company Blockware told his 43,900 Twitter followers on Jan. 29 that BTC won’t reach and surpass its all-time high of $69,000 until after the next Bitcoin halving event, which is expected to take place in March 2024:

I do not think Bitcoin will make a new all time high until after the 2024 halving.

Dovish macro conditions and decreased miner sell pressure will lead to the next parabolic bull run.

Using Energy Gravity as a potential top indicator, I expect the next peak to be $150k - $350k. pic.twitter.com/OfCER7s8Zq
— Joe Burnett ()³ (@IIICapital) January 29, 2023

Macroeconomist and investment adviser Lyn Alden also recently told Cointelegraph that there may be “considerable danger ahead” with potentially risky liquidity conditions expected to shake the market in the second half of 2023.

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USDC transfer volume hit 5X USDT’s in fallout from FTX collapse

January 11, 2023 Coin Telegraph

accounting

Although it has a much smaller market cap, on-chain data shows that USDC has a much greater transfer volume compared to its main competitor USDT.

Stablecoin USD Coin (USDC) has grown in popularity since the collapse of FTX and now frequently reaches daily transfer volumes four to five times that recorded by major competitor Tether (USDT) according to data from blockchain analytics firm Glassnode.

That’s despite the market cap of USDT being $23 billion greater than USDC. As of Jan. 10, the difference was in USDC’s favor by a margin of four and a half times.

Both stablecoins recorded surges in transfer volumes following an infamous tweet from Binance CEO Changpeng Zhao on Nov. 6 announcing Binance would liquidate its entire FTX Token (FTT) holdings. FTX went into bankruptcy soon after.

Since then, USDC has been the preferred choice for crypto users averaging over $12.5 billion more in transfer volume compared to USDT per day according to Glassnode data.

*Total transfer volumes for USDC (In blue) and USDT (In green) from Oct. 8 to Jan. 10. Source: Glassnode.*

While each of the stablecoins is designed to trade as close to one U.S. dollar as possible and is backed by reserves held by its issuers, USDC is regarded by some in the crypto community as a potentially safer option.

Supporters point to USDC’s assets, which are backed by cash or short-term U.S. treasuries and its monthly audits by global accounting firm Grant Thornton.

Tether has faced criticism over a number of years for not providing a proper audit and for being less transparent about its reserves.

The company behind USDT was fined $41 million in Oct. 2021 by the Commodity Futures Trading Commission, which accused it of only holding sufficient reserves 27.6% of the time between 2016 and 2018 despite claiming its tokens were fully backed by fiat currencies.

Tether has been reducing the commercial paper backing its issued tokens in favor of safer alternatives, with the latest asset breakdown on Nov. 10 showing that nearly $46 billion of its reserves consist of cash, bank deposits and U.S. treasuries.

USDT briefly lost its peg to the U.S. dollar following the FTX collapse amid fears it was exposed to Alameda Research and FTX, which Tether denied.

On-chain evidence suggests the two firms were attempting to short the stablecoin.

USDT had been recording transfer volumes much higher than USDCs up until May 2021, after Tether had increased the supply of the token from $8.79 billion to $61.82 billion over the last year, representing an increase of 603%.

*Market cap of USDT from May 2018 to Jan. 2022. Source: TradingView*

Despite the subsequent change in consumer preferences, Tether had referred to the growth in market capitalization as an indication of “the market’s continued trust and confidence in Tether,” and noted every token can be redeemed for U.S. dollars on a 1:1 basis.

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December 18, 2022 Bitcoin.com

Realized losses from FTX collapse peaked at $9B, far below earlier crises

December 15, 2022 Coin Telegraph

Realized losses from FTX collapse peaked at B, far below earlier crises

3AC

Weekly-realized losses peaked at $20.5 billion when Terra Luna (LUNC) imploded and reached $33 billion when 3AC and Celsius collapsed, according to Chainalysis.

Blockchain analytics firm Chainalysis has attempted to put the FTX collapse into perspective — comparing peak weekly-realized losses in the wake of the exchange’s collapse compared to previous major crypto collapses in 2022.

The Dec. 14 report found the depegging of Terra USD (UST) in May saw weekly-realized losses peak at $20.5 billion, while the subsequent collapse of Three Arrows Capital and Celsius in June saw weekly-realized losses peak at $33 billion.

In comparison, weekly realized losses during the FTX saga peaked at $9 billion in the week starting Nov. 7, and have been reducing weekly since.

1/ Our data suggests that FTX’s demise hasn’t been crypto investors’ biggest issue this year. Both the depegging of Terra’s UST token & the collapse weeks later of Celsius & Three Arrows Capital (3AC) drove much bigger realized losses. https://t.co/tWpX9qjY6o pic.twitter.com/TI2eJSVXaW
— Chainalysis (@chainalysis) December 14, 2022

Chainalysis said the data suggests that by the time the FTX debacle took place in November, investors have already been hit with the “heaviest” crypto events this year.

“The data [...] suggests that as of now, the heaviest hitting [crypto] events were already behind investors by the time the FTX debacle took place.”

The analytics firm calculated total realized losses by looking at personal wallets and measuring the value of assets as they were acquired and subtracting the value of these assets at the time they were sent elsewhere.

However, the data may still have overestimated realized losses, as it counted any movement from one wallet to another as a sale event. Chainalysis aalso noted that the chart doesn’t take other statistics into account, such as user funds stored on FTX’s exchange which are frozen.

“We can’t assume that any cryptocurrency sent from a given wallet is necessarily going to be liquidated, so think of these numbers as an upper bound for realized gains of a given wallet,” it explained.

While Chainalysis’ data covers realized losses, on-chain analytics platform CryptoQuant recently shared data on how net unrealized losses for Bitcoin (BTC) was impacted following the FTX collapse.

It found that unrealized losses for BTC maxed at -31.7% following the FTX collapse compared to the collapse of 3AC/Celsius and Terra Luna, which only peaked at -19.4%.

*Net unrealized profit/loss for Bitcoin. Source CryptoQuant.*

Analytics data firm Glassnode also highlighted the high level of unrealized losses following the FTX collapse in a Nov. 17 tweet, comparing it to the peak of -36% seen during the 2018 bear market.

#Bitcoin Long-Term Holders are currently experiencing acute financial stress, holding an average of -33% in unrealized losses.

This is comparable to the lows of the 2018 bear market, which saw a peak unrealized loss of -36% on average.

Chart: https://t.co/qIGAxtSyGZ pic.twitter.com/BBtbOtApy1
— glassnode (@glassnode) November 17, 2022

The gains or losses associated with an investment are considered unrealized up until the point that the investment is sold. The act of selling "realizes" these losses or gains. Unrealizes losses are also known as paper losses.

Glassnode