Analysis & Opinions

This Week in Crypto: A Data Perspective (May 25-29)

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In this new format, IntoTheBlock will be looking at key weekly developments in the crypto space from a blockchain perspective. Leveraging blockchain’s transparent nature, IntoTheBlock is able to extract valuable insights, providing a data-driven analysis into news about the top cryptocurrencies. 

This week, we will analyze the recent pump and dump of the OmiseGO token, looking at the profitability of the holders, and we will also look into the next price movements of Bitcoin and the massive adoption of Tether.

Despite Coinbase Surge, Nearly All OmiseGo (OMG) Investors Remain Underwater

Screenshot taken at 6:30am EST, May 27, 2020

As covered by The Daily HODL, while OmiseGo (OMG) had a 200% parabolic rally after it was listed on Coinbase on May 21, the majority of the cryptocurrency’s investors are not making profits. 

Using IntoTheBlock’s In/Out of The Money indicator, we were able to support that statement: even though OMG is up 42% since the Coinbase listing, only 3.11% of addresses are currently “In the Money,” meaning that if they were to sell their position today, only that small percentage of holders would make a profit.

The size of the bubbles on the chart varies according to the number of addresses within the price ranges along the horizontal axis, and it’s relative to the other price bands on the chart. We display this chart in two separate views, on an address basis and also on a token basis that shows the number of OmiseGo tokens from the total supply that were bought at these price ranges. 

The bubble’s size shows either how many addresses there are (in “Addresses” view) or how many tokens there are (in “Volume view).

It’s interesting to see how the distribution changes for the in/out of the money calculations when you switch between the two views. In the case of OmiseGo, 3.11% of addresses are in the money, but 24.33% of tokens are in the money, which means that a large percentage of the OMG tokens were acquired at a price range between 0.000459 to $1.3.

Bitcoin Plunge To $8,200 Seems Likely, as Technical Indicators Turn Red

Screenshot taken at 6:30am EST, May 27, 2020

As covered by NewsBTC, Bitcoin is hovering around a relatively bearish area below $9,000, and its price is likely to get even lower if it falls below the $8,680 and $8,600 support levels.

According to NewsBTC’s analysis, there are four technical indicators that support this analysis:

  1. Bitcoin’s price is currently falling, and trading far below the “key” $9,100 level;
  2. Bitcoin’s price is possibly trending towards $8,400 and $8,200 support levels;
  3. The hourly chart of the BTC/USD pair shows a major bearish trend line, with resistance around $8,910;
  4. BTC/USD can avoid losses if it climbs back above $9,000 and $9,100.

At IntoTheBlock, we believe that blockchain analysis can complement some of the most common technical analysis indicators.

The In-Out Money Around the Current Price provides an analysis of the profitability of active investors who are in close proximity to the current price (+-15% distance of current price). The bubbles in green represent clusters of investors who would realize gains, while the red bubbles represent clusters of investors whose positions are at a loss compared to the current price. This analysis provides a highly granular view of the population of investors who are in close proximity to the current price of BTC.

As seen in the graph above, we were able to support the statement by NewsBTC, as the larger level of support is located between $8,651 and $8,902, where 1.52 million addresses are holding almost 1 million Bitcoin.

If Bitcoin can get past that level, it shouldn’t have many problems to breaking through the next level of support located between $8,330 and $8,651

Tether Continues Tear as its Daily Crypto Transactions Reach Record Levels

Screenshot taken at 6:30am EST, May 27, 2020

As covered by NewsBTC, daily transactions in controversial stablecoin Tether are at their all-time high.

The crypto news website explains how the daily transactions have been increasing continuously since February, and according to the IntoTheBlock data, it reached a yearly high of 205,770 daily transactions on May 25.

IntoTheBlock’s Transactions Indicator measures the number and volume of on-chain transactions in a given period of time.

As seen in the graph below, the number of on-chain transactions has been increasing consistently for the past three months. And from February 26 to May 25, the number of daily transactions increased by a staggering 97.3%.

This trend shows how the stablecoin has continued to gain adoption and popularity despite the claims and constant criticism regarding the unbacked issuance of tokens. 

While Tether had previously stated that its tokens are 100% backed by reserves, after Tether lawyers revealed in 2019 that Tether was backed only 74% (a fractional reserve), Tether noted that total backing does include loans to affiliate companies.

This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.

The views and opinions expressed in this article are the author’s own and do not necessarily reflect those of CoinMarketCap.

ITB is a tribe of data scientists, cryptocurrency experts and AI geeks that set out on a journey to unlock the mysteries of crypto assets and provide investors with relevant intelligence about the market.

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