The repeated unsuccessful test of the $12,000 level by Bitcoin was accompanied by a contraction in trading volumes. Against this backdrop, some altcoins continued their rally, according to Arcane Research.
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Among them stood out Chainlink, which on Sunday became the most traded asset on Coinbase. LINK trading volume surpassed BTC’s by nearly 70%.
Researchers noted that with the start of the new week this anomaly disappeared. Trading volumes for Bitcoin have since returned to levels seen at the end of June 2020.
Bitcoin trading volume smoothed by a moving average. Source: Messari, skew
On August 12, LINK continued its rise and once again updated its high.
Evidence of growing investor interest in altcoins is also the Bitcoin dominance index.
Bitcoin futures trading volume and open interest share smoothed by a moving average. Source: Skew
Change in market share in open interest for Bitcoin futures. Source: Skew
P2P Platforms
Trading on peer-to-peer platforms has stabilized above $100 million since June. Historically this threshold had been reached at the market’s record peak in December 2017, as well as at a multi-month high in July 2019.
Arcane Research found that to date the role of the so-called “frontier markets”, which are less developed than emerging markets, has grown in this segment. Experts linked this to the rising popularity of BTC remittances.
Structure of weekly trading volumes on peer-to-peer platforms by market category. Source: Digital Assets Data
Weekly trading volume dynamics on peer-to-peer platforms. Source: Digital Assets Data
Stablecoins
The volume of stablecoins on exchange wallets began to decline after peaking at $2.7 billion on April 22, amid rising Bitcoin and other cryptocurrencies. Spikes on June 29 and August 10 were driven by Tether issuances, which account for 73% of the current stablecoin supply on exchanges.
Dynamics of stablecoins and USDT on exchange wallets. Source: Glassnode
Issuance of other stablecoins is rising as well — recently the market capitalization of DAI for the first time exceeded $400 million. The total amount of DAI locked in the Compound protocol surpassed $1.2 billion. As of August 11 this figure had grown by 7.9%. $973 million of this is in loans.
Genesis Global Capital and Circle have begun developing DeFi protocols based on the USDC stablecoin. For other developments in the decentralized finance space, see the regular newsletter.
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