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Bullish Insights – Weekly Market Recap

Oct 21, 2022 3 min read

The Bullish Insights Weekly Market Recap includes curated industry news and analysis from the Bullish team for the week of October 17, 2022.

Bullish Exchange

This week’s peak trade volume (24h): October 18, 2022, $239,478,539 (12,216 BTC)

Crypto market highlights
  • VC liquidity seems to be drying up as venture funding for blockchain projects drops for two-consecutive quarters. Compared to 2Q, 2022, which recorded $9.57bn in funding, this quarter saw a ~35% dip to $6.22bn.
  • Last week, digital asset investment total flows saw $12mn worth of inflows. Bitcoin saw the majority of inflows at $8.8mn while Ethereum saw outflows of $3.9mn.
  • Polygon ($MATIC) is due to unlock 3.67% of its market cap on October 31, 2022 with an estimated token value of $236.25mn. The token currently has 8,734,317,475 MATIC in circulating supply. The unlock that is due at the end of the month will make up roughly 78.67% of its average trading volume.
  • When comparing Total Value Locked (TVL) on-chain, Ethereum still dominates holding $30.66bn worth of TVL followed by Tron at $5.54bn and Binance Smart Chain (BSC) at $5.34bn. The three chains combined make up over 75% of dominance in TVL.
  • Collateral denominated in crypto versus cash saw a flip in dominance back in Q4, 2021. Crypto margin collateral saw an ATH dominance of 70% back in April/May 2021 which increased the risk of liquidation cascades exhibited in May 2021. This week marked the ATH dominance of cash-margined OI of 65% suggesting a healthier structure when compared to 2021.
  • As of October 21, the correlation to the S&P500 is 0.3 and to the Nasdaq 100 is 0.29. The trend line broke below 0.5 after October 12, indicating that during the period, Bitcoin has begun to see a short-term decoupling to US equity markets.
Macro market highlights
  • US equity markets closed lower in last Friday's trading session with the S&P 500 down by 2.4%, the Dow fell by 1.3% and the Nasdaq Composite dipped 3.1%.
  • US equity markets saw large gains in Monday's trading session after the release of strong earnings report by the big banks. The S&P 500 was up by 2.7%, the Dow rose by 1.9%, and the Nasdaq Composite gained 3.4%.
  • As of October 19, 2022, investor confidence was lifted after reports of better-than-expected earnings from blue-chip names. The S&P 500 was up by 1.1%, the Dow rose by 1.1%, and the Nasdaq Composite gained 0.9%.
  • Investor confidence dampened in Wednesday's trading session with the S&P 500 down by 0.7%, the Dow fell by 0.3%, and the Nasdaq Composite dipped 0.9%.
  • US equity markets closed lower in Thursday's trading session with the S&P 500 down by 0.8%, the Dow fell by 0.3%, and the Nasdaq Composite dipped 0.6%.
Other updates
  • Ripple is anticipated to launch an EVM-compatible sidechain in 2023 which could allow users to transfer XRP and other assets from the sidechain to the XRP Ledger Devnet. (Source: COINTELEGRAPH)
  • The US Internal Revenue Service has reportedly tweaked a draft of its tax language from “virtual currency” to “digital assets” which would in turn encompass tax implications for NFT sales as well. (Source: Forkast)
  • Tesla’s 3Q 2022 earnings report reveals that it has maintained its crypto holdings at ~$218mn without selling any positions in the quarter. (Source: CNBC)
  • Customers of Voyager Digital are said to possibly be able to recover 72% of their frozen accounts depending on a tentative deal between the company and FTX US. (Source: COINTELEGRAPH)
  • The ongoing legal battle between Ripple and the SEC sees new documents surrounding the draft of William Hinman,Former Director of the Division of Corporation Finance at the SEC, infamous 2018 speech as well as internal emails be handed over to the company. (Source: Bitcoinist)

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