XRP Rises as Bitcoin’s Share in Portfolios Shrinks — EXMO.com Market Analysis

The cryptocurrency exchange EXMO.com published the market research results for the third quarter of 2022.

We report on trader sentiment, trading volumes, and user activity on the platform. The full version of the report — in the blog of the trading platform.

Key metrics: market sentiment, capitalization growth and Bitcoin’s waning dominance

Market sentiment improved: in the third quarter, the median value of the Fear and Greed Index rose to 26 points (\”fear\”). In the previous reporting period its median value stood at 14 points (\”extreme fear\”).

Crypto market capitalization rose 11% in Q3. The corresponding figure for silver fell 18.2%, gold — 7.5%, the S&P 500 — 5.6%.

Nevertheless, the statistical correlation between digital assets and the S&P 500 remained high — the 30-day correlation coefficient mostly stayed above 0.8.

In the first half of the quarter, cryptocurrencies recovered faster than the S&P 500, while in the second half, markets moved more in sync.

Bitcoin dominance over the quarter weakened by 5%. The share of digital gold on the market at period end was 39.6%. Meanwhile Ethereum’s share rose by 2% (to 17.3%), and the share of the other cryptocurrencies rose by 3% (to 43.1%).

Trading volumes: rebound after the crash, XRP rally, and waning crypto correlations

EXMO.com analysts note that after the update The Merge, Ethereum’s trading volumes increased but fell short of expectations, despite media coverage of the event.

Return on investment (ROI) in Q3 turned positive for many cryptocurrencies. The biggest gains were observed in July, as the market recovered from the drop in the previous quarter.

The growth leader was XRP. Against the backdrop of progress in the SEC’s case against Ripple, the token’s price rose by 51.2%.

\”There is hope for a swift resolution of the Ripple and SEC case. Obviously, most market participants believe in a favorable outcome,\” says the EXMO.com team.

The biggest losses were Dogecoin (-8.7%), Polkadot (-6.3%) and Tron (-6.3%).

Volatility across cryptocurrencies declined significantly compared with previous quarters.

\”Tron demonstrated the least volatility: the altcoin managed to outpace Bitcoin. However, for TRX this is a negative signal, given the drop in trading volume and price,\” says the EXMO.com report.

The correlation between cryptocurrencies weakened significantly and did not exceed 0.9. In the second quarter, the interdependence of price movements was very strong: the correlation coefficient for almost all cryptocurrencies exceeded 0.95.

Excluding XRP: it showed a complete decoupling from the market due to growth of 30% in September.

EXMO.com user activity: shrinking balances and Bitcoin’s share in investor portfolios

User balances on EXMO.com across most cryptocurrencies declined. This was driven by gains in some altcoins.

XRP balances fell by 8%, Uniswap (UNI) by 19%, Chainlink (LINK) by 20%, although token prices rose by 51%, 30% and 23% respectively.

The number of NEAR holders grew the most (+9.4%). Investors were actively selling Decred (-12.3%), Maker (-11.8%) and Wirex (-11.2%).

The share of Bitcoin in the portfolios of long-term holders declined from 38% to 35%.

During the quarter, BTC/USDT trades ranged from 18,700 USDT to 24,700 USDT with a relatively even distribution of volumes.

More than half of Ethereum’s trading volume occurred during the period of price rise from 1,500 USDT to 1,800 USDT. When the asset price exceeded 1,800 USDT, only 13% of trades were executed.

Conclusions

The quarter’s main event was Ethereum’s transition to the Proof-of-Stake consensus algorithm. The upgrade positively affected the asset’s price.

Progress in the SEC’s case against Ripple positively affected XRP’s price. Against rising altcoins, investors actively reduced balances.

Long-term investors on EXMO.com reduced their Bitcoin share in portfolios by 3% — from 38% to 35%. The biggest losers among major cryptocurrencies were Dogecoin, Polkadot and Tron.

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