BTC bubble squeezed again as ethereum DeFi absorbs over $100 billion in liquidity in eight months

A few indicators of the BTC market and what state the market is really in

One, BTC is still being bought by institutions

Since 2021, the balance of BTC held on the OTC counter has been declining, although miners have been selling BTC. BTC is being siphoned off by institutions and the trend is still being maintained.

BTC bubble squeezed again as ethereum DeFi absorbs over 0 billion in liquidity in eight months

Second, the supply of bitcoin held by long-term holders has returned to accumulation mode

BTC bubble squeezed again as ethereum DeFi absorbs over 0 billion in liquidity in eight months

Since October 2020, long-term coin holders have maintained a selling pattern, similar to the January-December 2017 process. We’ve been watching for when the inflection point comes, and recently we saw one forming: the supply of liquidity provided by long-term holders is increasing. While it looks similar to the 2017 peak, the difference is that today’s HODLers actually hold more than 8% more in circulation in dormant wallets (10.9M BTC, 58% of circulation), which doesn’t seem to have reached a lower level yet, meaning it may just be a phase inflection point for now, with the potential for further bottoming down the road.

Third, SOPR index bottomed again, back to <1 level

BTC bubble squeezed again as ethereum DeFi absorbs over 0 billion in liquidity in eight months

SOPR (Spent Output Profit Ratio), a metric created by Medium user Renato Shirakashi. This indicator measures whether the users who transferred out BTC on that day made a profit while holding BTC by monitoring the UTXO on the chain and comparing the secondary market price when each UTXO was created and when it was spent, thus assisting users in making macro judgments about the market.

When SOPR is greater than 1, it means that all users who spend BTC on that day are in the profit-making stage in general; when SOPR is less than 1, it means that all users who spend BTC on that day are in the loss-making stage in general.

As in the green area of the chart, SOPR index returns to below 1 again, which means that all users who are currently spending BTC are in a loss-making state, thus judging that the probability of BTC price at the top is very low and the bubble degree is squeezed again.

Fourth, the contract funding rate turns positive again

After maintaining a negative (red) funding rate for a few days in the short term, it is now back to a positive number again. The long side is back to subsidizing the short side. So, the contract market is currently dominated by long sentiment. However, the rate values are not yet high, they are only just beginning. Combined with the current price of BTC after the pullback, it will be some time before the next deleveraging.

BTC bubble squeezed again as ethereum DeFi absorbs over 0 billion in liquidity in eight months

Five, Bitcoin’s mining difficulty increased by 21.5%

This is the largest positive difficulty adjustment in nearly 7 years, BTC global counting power is continuing to grow and BTC is being adopted on a larger scale.

BTC bubble squeezed again as ethereum DeFi absorbs over 0 billion in liquidity in eight months

Six, Ether DeFi has absorbed more than $100 billion in liquidity in 8 months

In just eight months, DeFi has attracted more than $100 billion into smart contracts. These innovations provide new opportunities for individuals to truly own their assets, participate in global capital coordination, trade through decentralized transactions, leverage lending markets, and more.

The chart below demonstrates the explosive growth of the user base and value in the DeFi ecosystem. Users grew 1300%, TVL grew 9000% to $113 billion, and DEX trading volume grew 8500%. What we see from this is the new spirit behind a perfect storm of innovation and a combination of financial incentives. The entire community became self-sufficient by incentivizing participation in the DeFi protocol, driving users to incentives for products that effectively grow and retain users and capital.

BTC bubble squeezed again as ethereum DeFi absorbs over 0 billion in liquidity in eight months

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/btc-bubble-squeezed-again-as-ethereum-defi-absorbs-over-100-billion-in-liquidity-in-eight-months/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-05-17 16:24
Next 2021-05-17 16:35

Related articles