Market Wrap_ Cryptos mixed in choppy trading, bitcoin activity slows

Market Wrap_ Cryptos mixed in choppy trading, bitcoin activity slows

The decline in activity on the blockchain is similar to what occurred during the 2018 bear market.

Bitcoin (BTC) barely moved from the spot on Thursday as trading conditions in the crypto market remained volatile.

Technical indicators were neutral last week when BTC was trading at around $30,000. Meanwhile, some alternative cryptocurrencies (altcoins) outperformed BTC, which may encourage some buyers to return from the sidelines.

Internet Computer's ICP token has risen as much as 20% in the last 24 hours, while Cardano's ADA token gained 4% in the same period. Meanwhile, Solana's SOL token fell 2% in the last 24 hours following a network outage on Wednesday.

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On the regulatory front, the Commodity Futures Trading Commission sued Gemini Trust Co. On Thursday, the Commodity Futures Trading Commission sued Gemini Trust Co. alleging the crypto exchange's employees misled federal regulators in Gemini's 2017 effort to launch trading in a groundbreaking bitcoin futures contract. CoinDesk's Nik De has the latest information here.

The Gemini case shines a spotlight on concerns about exchange data and possible market manipulation. For example, the U.S. Securities and Exchange Commission has consistently rejected proposals for an exchange-traded bitcoin spot fund, citing issues related to volatility, fraud and price manipulation.

Latest prices

●Bitcoin (BTC): $30,300, +0.90%.

●Ether (ETH): $1,823, +0.35%

●S&P 500 daily close: 4.177, +1.84%

●Gold: $1,873 per troy ounce, +1.62%

●Ten-year Treasury yield daily close: 2.91%.

Bitcoin, ether, and gold prices are determined at approximately 4 p.m. New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information on the CoinDesk indices can be found at

Activity stagnates in bear market

The chart below shows a decline in the number of active entities and addresses on the Bitcoin blockchain, similar to what occurred during the 2018 crypto bear market.

There was a brief upswing in blockchain activity as investors sought to book margins and cover positions during the LUNA-inspired selloff, which some analysts saw as an early sign of capitulation. However, that surge in activity was short-lived.

"The recent sell-off and lower prices have not yet resulted in an influx of new users in the space," Glassnode wrote in a blog post.

In the meantime, existing members of the network (possibly long-term holders) have been accumulating additional BTC as prices fall, especially in the last two weeks. However, the amount of accumulation is small compared to earlier phases.

Slower spending by bitcoin miners.

Bitcoin miners have been distributing their BTC holdings during the recent sell-off, albeit at a slower pace than earlier in the year. However, it is unclear whether miners' position changes are leading or reacting to BTC price fluctuations.

The chart below shows the 30-day change in BTC holdings in miners' addresses, according to data compiled by Glassnode.

Altcoin Review

  • Solana Outage: The Solana network suffered its latest outage on Wednesday, which lasted over four hours due to a flaw in the way the blockchain processes a niche type of transaction designed for offline use cases. Validators began rebooting the network after disabling these "persistent nonce transactions," Austin Federa, communications director for Solana Labs, told CoinDesk. Solana's SOL token has fallen 9% in the last week, while BTC has risen 3% in the same period. Read more here.
  • Staked Ether discount: Staked Ether (stETH), a Lido Protocol token that is expected to trade at a price close to that of Ether (ETH), has been changing hands at a persistent discount since the collapse of the Terra network - possibly a sign that liquidity has dried up in the crypto markets. "There is no new money flowing into cryptocurrency right now," Fundstrat analyst Walter Teng said in a Telegram chat with CoinDesk. Read more here.
  • Alchemy expands into Solana ecosystem: Alchemy is expanding its services to the Solana ecosystem, the Web 3 developer platform said Thursday. The beta version is available to users now and will be released to the general public in the coming weeks, according to a press release. Popular Web 3 products, such as OpenSea, Aave and 0x, were developed through Alchemy. Read more here.

Relevant Insights

  • U.S. Department of Labor sued after warning 401(k) providers against allowing crypto investments: The plaintiff, 401(k) provider ForUsAll, is concerned that the policy sets a "troubling precedent" that could lead to a slippery slope of future bans.
  • Winklevoss-led Gemini is laying off 10% of its staff, citing the "turbulent" crypto market, with Gemini citing the downturn in cryptocurrencies along with macroeconomic market conditions.
  • Middle Eastern Crypto Exchange Rain lays off dozens of staff: Report: The move follows news of staff cuts at a number of exchanges in the U.S. and around the world.
  • Indian Exchange CoinSwitch Kuber Introduces Crypto Rupee Index: The Crypto Rupee Index (CRE8) will track the performance of the eight largest crypto assets denominated in Indian rupees instead of U.S. dollars.
  • 'DeFi casino' may need new global regulator, says German central banker: Joachim Wuermeling called for immediate discussions on how to deal with DeFi as the Financial Stability Board prepares a regulatory framework for the crypto sector.
  • Bear market could lead some crypto miners to rely on M&A to survive: Companies that have already survived the last down market and have enough capital and a solid business strategy will be able to survive this cycle.

Other markets

Most digital assets in the CoinDesk 20 ended the day lower.

Biggest gains

Asset Ticker Returns DACS sector
Internet Computer ICP +19.7% Data processing
Cardano ADA +5.1% Platform for smart contracts
Polkadot DOT +3.6% Platform for smart contracts

Biggest losers

Asset Ticker Earnings DACS sector
Bitcoin Cash BCH -1.5% Currency
Solana SOL -1.3% Smart contracts platform
XRP XRP -0.7% Currency

Sector classifications are provided through the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.