Category: Analysis

It was on January 8, 2018 when the overall crypto market cap reached its peak of 828.5 billion USD. It was the peak of a phase of seemingly never-ending euphoria, and cryptocurrencies were said to be the new financial paradigm. From that point on, the cryptocurrency market moved into a totally different direction, with many coins/tokens losing over 90% of their fiat value in less than a year. In this article, I will take a look the TOP 50 cryptocurrencies at the peak and how they are positioned on the exact same day one year later.

A comparison between different years for cryptocurrencies can be done with different parameters. You can base the calculation on the price, but that doesn’t consider (logical) price declines due to increases in circulating supply. The market cap of a cryptocurrency should therefore be better suited for a comparison, since it both includes price and circulating supply. The market cap itself is often referred to in USD, but due to most altcoins’ fiat value depending on Bitcoin’s fiat value, comparing the market cap in BTC should give better insights on how a coin performed over time, than it’s fiat value. Accordingly, in the following you can find the market cap of the TOP 50 cryptocurrencies on January 8, 2018 compared to their market cap in BTC on January 8, 2019.

As we can see, there are only four coins in last year’s TOP 50, whose market cap was worth more in BTC, than it was one year later. EOS’ market cap gained 66.6% in Bitcoin, Binance’s market cap gained 80.8% and stablecoin Tether’s market cap gained 388% in Bitcoin value. Bitcoin’s market cap was also worth more (in terms of BTC) than it was one year ago, due to an increase in circulating supply. The market cap of all other 46 coins/tokens lost value against BTC, some less (Stellar lost only 21%), some more (DENT lost 90%). 36 coins remained in the TOP 50, while five coins even moved out of the TOP 100. One coin died completely, which is the infamous Bitconnect. On average, the market cap of coins/tokens in the TOP 50 lost 50.4% in Bitcoin value.

The peak of the overall crypto market cap also meant a peak for most coin’s prices. With BNB, EOS and USDT, only three coins would have gained value against BTC, if you had invested in them at the peak of the market. But even they couldn’t gain value against USD. Besides stablecoin Tether, the best investment from a perspective of keeping your fiat value would have been Binance coin – it’s price in USD went down “only” 63.4%. If you would have invested an equal amount in each TOP 50 coin at the peak, you would have lost 88.9% of your fiat value compared to exactly one year later.

The cryptocurrency market peaked at January 8, 2018. A comparison between the valuation of coins/tokens on this day and one year later is best done by comparing their market cap in Bitcoin value. At the peak, only an investment in Binance Coin, EOS and USDT would have gained value against BTC, while the average market cap of TOP 50 cryptocurrencies lost 50.4% of its value in Bitcoin. Talking about the TOP 50’s price valuations in USD is even more devastating: Binance coin lost the least with only 63.4% of its USD value, while the TOP 50 cryptocurrencies on average lost 88.9% of their USD value.


Let’s hope for a better 2019.

Recently, I put a spotlight on using the all-time volume weighted average price (ATVWAP) to evaluate, whether the price of Bitcoin is overbought or oversold (find the detailed article here: Bitcoin ATVWAP). It is basically an average daily price, with every price point being weighted by its daily trading volume. The ATVWAP is not limited to BTC though, it also offers interesting insights for the price of other cryptocurrencies. In this article, it will be applied to the second highest ranked cryptocurrency on CoinMarketCap, which is Ethereum.

Ethereum has been traded publicly for the last 3.5 years. Similar to Bitcoin, Ether’s trading volumes have gone up significantly over time. While just 835k ETH were traded on a daily basis in 2015, this number increased to 6.7 million ETH in 2018. Lately, the market showed tremendous interest in trading Ether, with a daily trading volume of 21.2 million ETH in December 2018. Consequently, the ATVWAP should better indicate a fair price of Ether than the average price does, because way more investors agree to buy and sell Ether in 2018, than they did in 2015. The rising volume can be seen in the following chart:

During these 3.5 years of public trading activity, ETH went from lows around 0.5 USD all the way up to 1400 USD. During the course of 2018 however, Ether has seen its biggest decline. When it hit 82.83 USD on 2018-12-15, it was down 94.2% from its previous all-time high. At that point, many people were screaming for Ether to go even lower, but it has recovered a little instead and went up to the 150 USD range again. Ether’s price movements should provide interesting data to apply it to the ATVWAP.

Although before calculating the ATVWAP, we have to consider Ethereum’s initial distribution method. Ethereum held an ICO in 2014, where it raised 31,538 BTC.¹ It can be assumed, that purchases of ETH were made for 2000 ETH per 1 BTC,² indicating that 63 million ETH were sold in the crowdsale for approximately 0.3 USD per ETH. Why is that important for calculating the ATVWAP? Alongside the public trading data, it also makes sense to integrate data from a crowdsale into the ATVWAP, to add the price difference between token issuance and first exchange listing into the equation. The result is displayed in the following chart:

As the chart shows, ETH’ price action was very bullish from its ICO onwards to the end of 2017. After listing 10x above its ICO price on public exchanges, it dropped down to 0.5 USD, but stayed above its ICO price of 0.3 USD. Later on, it went up from 1 USD to 15 USD in the first 75 days of 2016 and stayed in the range of 7-15 USD for almost a year. Then, from the beginning of 2017 on, ETH had its biggest run up from under 10 USD all the way up to 1400 USD, followed by a massive price decline in 2018. Now, which role does the ATVWAP play?

There are some interesting similarities between how Bitcoin’s and Ether’s price behaved towards its ATVWAP. We had seen, that Bitcoin had a massive run up two times and after that hovered around the ATVWAP for months (in 2012 and 2015). Similar to that, ETH hovered around its ATVWAP after two run ups. The first occasion where this happened, was during the last months of 2015. After being issued for 0.3 USD in its ICO, ETH reached 3 USD on exchanges and later consolidated in the 0.8 – 1 USD range, while its ATVWAP was at 0.75 USD. The second occasion, in which the ETH price hovered around its ATVWAP, was at the end of 2016. After having failed to pass 15 USD on multiple attempts in 2016, ETH went down to the range of the ATVWAP again in December 2016, which was at that time at 7.8 USD.

After its major run up in 2017 however, ETH declined below its ATVWAP value and has stayed below since August 2018. Its ATVWAP had been as high as 304 USD in August, but due to ETH having stayed below for several months with way higher volume than before, its ATVWAP has already declined down to 250 USD. Accordingly, we have yet to see a longer consolidation period around the ATVWAP value, which would only be the case, if ETH behaves similar to both previous occasions.

To be honest, I am not totally satisfied with calculating the ATVWAP of Ether in USD. The whole crypto market somehow rises and falls with BTC and an USD chart therefore contains unwanted correlations with Bitcoin’s USD value. I think measuring the ATVWAP of Ether in Bitcoin shows more interesting patterns than the USD chart, but is also less intuitive to understand, since most people might rather measure value in FIAT than in BTC. Let’s have a look at the chart:

Ethereum’s price movement against BTC over the past 3.5 years is very interesting. It had three major pumps and massive declines after that, but it could establish a higher support level after every pump. It can also be noticed, that each time ETH had a major decline, it went below its ATVWAP value, only to snap back above it after a while again. Moreover, every time it climbed back up above the ATVWAP level, ETH had a parabolic move upwards. Following the massive decline in 2018, ETH seems to surge to its ATVWAP level again, but if we see a parabolic move upwards after it managed to get above its current ATVWAP level of 0.044 BTC remains to be seen.

In this article, I discussed the all-time volume weighted average price (ATVWAP) as a method to analyze Ethereum’s price. While it is both possible to analyze ETH’s price in relation to its ATVWAP in USD and BTC, analyzing the price in BTC appears to be more promising, because it includes less correlation with Bitcoin’s price in USD. The chart shows, that ETH had three declines below its ATVWAP value (in BTC) in the past, but always managed to climb back up again, followed by a parabolic move upwards. Currently, it trades below the ATVWAP for the fourth time, but seems to be on its way to recovery again and might touch its current ATVWAP value in the near future.

During Bitcoin’s recent sell-off from 6,300 USD on Nov 14th down to a (up to this point) low of 3,456 USD on Nov 25th, I saw many posts on Telegram, Reddit and Twitter expressing “hopium” for a price rebound due to Bitcoin’s daily RSI being in oversold range. But is that even backed by facts or is an oversold RSI just a meme? Let’s find out!

The “Relative Strength Index” (RSI) is a momentum indicator used in technical analysis, that measures the magnitude of price movements on a scale of 0-100.¹ Its main purpose is to identify whether the price of an asset is in overbought, neutral or oversold range.² An RSI value below 30 is commonly perceived as oversold, indicating a future uptrend, whereas an RSI value above 70 is perceived as overbought, indicating an upcoming downtrend.³ In general, the lower the RSI value, the higher the chance for the price bouncing upwards and the higher the RSI value, the higher the chance for the price going downwards. However, it is not guaranteed that the price will move in the direction indicated by the RSI.

So, how did the daily RSI behave for Bitcoin in the past? The “BraveNewCoin Liquid Index for Bitcoin” on Tradingview provides us with data about Bitcoin’s price movements from 2010 onwards. Since Bitcoin has been an incredibly bullish asset in the past, it has way more upticks to the overbought zone than downticks to the oversold zone. In fact, most of the time Bitcoin went below 30 on the daily RSI, it went back above it again in the following two days.

There have only been five occasions in the past, where it stayed below 30 for more than two consecutive days. One occurred in 2011, one in 2012, and three in 2014. Since an RSI value in the oversold range should indicate an uptrend, I analyzed how long it took to get back to the closing price of the day before the RSI value went below 30. Two times (in October 2012 and October 2014) the price rebounded quickly, reaching the previous closing day price within a couple of weeks (10 days in October 2012, 23 days in October 2014). On two different occasions it took around two months for the price to recover (57 days in September 2014 and 66 days in October 2011). However, in opposite to these four rather quick rebounds, it took nearly two years for Bitcoin’s price to reach 568 USD again, which was the closing price on 12th of August in 2014, before it went into the oversold range on August 13th (and went back into the neutral zone on August 19th).

Comparing the recent sell-off in terms of RSI value to these other five occasions, shows that the recent sell-off is a historical milestone for the bears. Never in the history of Bitcoin has the RSI value stayed below 30 for more than 6 days, whereas we are now approaching the 13th day of Bitcoin’s daily price remaining in oversold range. The daily RSI value has also produced several new lows, setting a new record low at 9.6 a couple of days ago on 20th of November, 2018.

The historical RSI movement of Bitcoin in the past two weeks showed us, that even after 8 years of Bitcoin trading, new patterns can evolve. Bitcoin’s RSI value on a daily timeframe has never been this low and has never stayed this long in the oversold area. The RSI value being this low is an indicator for a higher probability to enter an uptrend, than with the value being above 30. However, it could only rebound in the short-term and a higher probability of an uptrend still doesn’t guarantee an upwards movement. As we saw in 2014, it could take years to go back to the daily closing price before entering oversold range, although most people in the cryptocurrency market would presumably appreciate a quicker recovery.

Over two months have passed since the official launch of the Skywire testnet on May 22, 2018. Two weeks after launch, we already saw 4000 nodes in the network. As of today, there are over 7000 nodes participating in the testnet from all over the world. On July 31, 2018 I made a snapshot of all miners that were online at that point and received a sample size of 6582 nodes. Each of these nodes comes along with a node key, an app key and a location. Since node key and app key are both unique per node, I used the location data to process it statistically. The results from this analysis are displayed in five infographics. Two of them show the nodes per continent and the top eight countries with the most nodes in the testnet. The other three infographics show maps of different regions in which the nodes per country or state are shown as a number on a flag. Only countries/states with at least ten nodes where considered in the graphics. Check it out:

The number of participants in the Skywire testnet is growing. Over the past two months, about 2500 nodes joined the network. Most of the participants are from the United States (2300 nodes) and Europe (2080 nodes). The locations that contain the most nodes are California (747 nodes), Shanghai (395 nodes) and Texas (208 nodes), while not a single node is hosted in other countries like Poland and Turkey. As we could already conclude from the first Skywire node location analysis, there are local network effects that make the network grow. I can’t tell if this is coming from people who motivate their friends to build miners or people build them on their own and place them in various residences, but local network effects seem to be existing. Furthermore, the regions with the most nodes right now might also be the ones that grow the quickest, if there are already enough people at this point to spread the word about Skycoin. It is actually a good thing to see nodes popping up in huge numbers in similar regions, because these nodes will be able to connect to each other once the Skywire meshnet is running.

The first article about Skywire statistics was originally published on June 3, 2018. This update contains new numbers captured on July 31, 2018. If you want to read the first version of Skywire statistics, you can find it here: Skywire Statistics 03.06.2018