↯ Summary of Key Points
This week, the cancellation of bitcoin payments by Elon Musk and the sale of Vitalik’s position in SHIB had a major impact on the market: after February 28th, people were able to buy bitcoin for under $50,000 once again. Musk’s actions triggered the largest wave of panic trading in nearly 3 months, with market volume and volatility both rising to new highs. As the volatility spread turned from negative to positive, the market briefly entered a downward range and has yet to see any signs of a market recovery, at least until the end of the week.
Digital asset market trends over the last 90 days, as of May 14, 17:00. source: tokeninsight.com
“Bitcoin Under $50,000” vs. “Ether Under $4,000”
At a time when bitcoin’s marginal yields continue to be low, any hit to its price is slow to recover.
As one of Bitcoin’s biggest proponents, Musk’s comments are pivotal to the digital asset’s influence. On May 12, Bitcoin fell to around $48,500 on the Coinbase exchange. Once again, people were buying “sub $50,000 bitcoins. By 17:00 on May 14, the price of bitcoin had recovered to over $50,000, but the price recovery was much slower than before.
Bitcoin price movement over the last 30 days, source: tokeninsight.com
The lack of momentum in bitcoin buying may be a major reason: the marginal diminishing returns of bitcoin holdings are evident to this day, and with speculative sentiment pervading the existing market, investors are holding spot more for hedging purposes than for investment. In pursuit of substantial returns, investors tend to choose ethereum or other non-mainstream digital assets, as well as derivatives such as perpetual contracts, over bitcoin spot.
Net outflows from major bitcoin exchanges reached $1.25 billion over the last 30 days, dominated by small investors with positions of around 0.1-1 bitcoin. As the price of bitcoin fell below $50,000, funds associated with large transactions began to trend back in.
Last 30 days of bitcoin inflows/outflows, source: tokeninsight.com
Investors with less than 0.1 bitcoins are currently the mainstay of bitcoin spot investments. There has been a steady flow of funds to smaller accounts over the last month, while outflows from larger positions are evident, and investors appear to be swapping bitcoin for other investment targets with a higher yield factor.
Bitcoin spot fund inflows/outflows and large real-time transactions over the last 24 hours, source: tokeninsight.com
One of the big destinations for funds is ethereum. The price curve shows that the marginal returns of ethereum are still increasing, although not as high as the outrageous returns of various speculative pass-throughs (such as the commonly known “dog coins”), but as a mainstream digital asset, its recent performance is certainly attractive to investors of all stripes.
Last 90 days Ether price movement as of May 14, 18:00, source: tokeninsight.com
Ether inflows and outflows as of May 14, 18:00, source: tokeninsight.com
Inflows on Ether have reached a high of $5.93 billion over the last month, with significant buying flows from small to large amounts. And as of May 14, 18:00, all major exchanges have seen large long buy orders of $400,000 or more.
Ether large trade movements as of May 14, 18:00, source: tokeninsight.com
Derivatives speculators were the main victims of this market turmoil compared to spot: a large number of speculators blew up their positions in this turmoil, and in terms of volume, the size of the blow-up was no less than the size of the institutional shorting on February 23.
Digital asset market volume movement over the last 90 days, source: tokeninsight.com
Deribit exchange bitcoin options and futures real-time clearing volume, as of May 14, 18:00, source: gvol.io
Compared to bitcoin, ethereum derivatives were significantly less impacted. Except for a large liquidation wave on May 11, there were no significant liquidation records, demonstrating Ether’s relatively good market confidence and shock resistance.
Real-time liquidation volume of Ether options and futures on Deribit exchange, as of May 14, 18:00, source: gvol.io
Speculative sentiment peaked, down range may continue
On the non-mainstream digital asset pass-through side, SHIB (commonly known as “shitcoin”) is leading the overall market sentiment. With the DOGE quasi-fork pass rising 812.29% in one week to a market cap of $8.03 billion, speculative sentiment has reached yet another new peak. Despite the continued negative market sentiment, SHIB-related trading remained in full swing, with daily volume remaining above $5 billion.
Recent 7-day SHIB market value movement, source: tokeninsight.com
The downward trend in mainstream digital assets will likely continue throughout the weekend amid high speculative sentiment. Volatility spread data shows that while Bitcoin volatility spreads have decreased, they are still positive, indicating that the market is still overheated, while the decline in implied volatility also shows that professional investors are concerned about the future performance of the market. The volatility spread data for ethereum also shows similar information.
Historical Bitcoin options volatility and implied volatility movements over the last 30 days, source: gvol.io
Historical Ether volatility and implied volatility movements over the last 30 days, source: gvol.io
However, the weekly trading data in the down range also reveals some deep shifts taking place in the digital asset market. Total ethereum spot trading volume exceeded bitcoin by $29 billion this week, a gap of this magnitude rarely seen in the history of digital assets. The high yield of ethereum and the development of DeFi are finally reflected in the volume, while the total locked-in volume of the ethereum DeFi market alone has exceeded $100 billion this week; and in terms of market capitalization, bitcoin’s share of the digital asset market has dropped to 40.7%, while ethereum’s share has risen to 19.8%, nearly 50%.
The above information means that Ether will have a greater say in analyzing the trend of the digital asset market, and the era of relying on Bitcoin-related elements to judge the market trend is gone; the market that investors face will be more complex and changeable.
This week’s mainstream digital asset spot and perpetual contract transactions, source: tokeninsight.com
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/market-watch-speculators-lose-heavily-as-market-enters-downward-range/
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