Market Trips on LSDs - FS Insight
Merch Store

Market Trips on LSDs

Jan 6, 2023 • 6 Min Read

Carnage Gives Way to Indifference

There are few cohorts of people more excited to turn the page to a new year than crypto investors. After nearly 12 months of unwinding leverage, we have finally reached a point in the cycle where indifference has crept into the market, as demonstrated by the continued decline in volumes and realized volatilities.

Aggregated ETH volume is the best proxy for trading activity in crypto. It is the second largest cryptoasset by market cap, and the data is not skewed by wash trading on Binance. Spot volumes continue to decline, now at the lowest level in over two years.

Source: CoinMarketCap, Fundstrat

We did see some interesting price action among several lower-cap altcoins, which we will discuss further below, but the tight range in which ETH and BTC continue to trade is substantiated by persistently subdued on-chain activity.

Below we see that bitcoin wallet activity has remained in a sideways pattern since the start of this ongoing bear market. The activity started to perk up in Q4, but this was primarily due to on-chain transfers in the wake of the FTX collapse. We can see in the chart below that activity has since continued its descent.

The trend for ETH on-chain activity is quite similar. While we have seen rather impressi...

Unlock this page with a FREE 30-Day Trial!

*Free trial available only on a monthly plan

You have reached the maximum amount of complimentary reports for this month.
You will receive 3 more complimentary reports as of the 1st of July.
FS Insight Guest PASS

Unlock 2 more articles by joining our newsletter!

Take Your Investing to the Next Level with our Award Winning Research!

Reports you haven't read

Traditional markets are stumbling today as the National Bank of Canada unexpectedly raised interest rates by 25 bps, sparking fears that the U.S. will potentially follow suit. The SPX (-0.31%) failed to break through $4,300, while the NDQ (-1.36%) has taken a pause on its recent outperformance. Crypto markets are still digesting the repercussions of the SEC lawsuits against Binance and Coinbase, with BTC -2.01%  (-3.15%) trading around $26.3k and ETH -2.19% ...