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CCData’s weekly ‘Charts of the Week’ highlight the developments in the crypto markets that might have gone unnoticed. For the final week of 2022, we have created this blog to showcase the charts that are still relevant in today’s market narrative, by re-examining one weekly chart from each month of the year.
CCData’s weekly ‘Charts of the Week’ highlight the developments in the crypto markets that might have gone unnoticed.
For the final week of 2022, we have created this blog to showcase the charts that are still relevant in today’s market narrative, by re-examining one weekly chart from each month of the year.
In January, we showcased Bitcoin’s declining market share of the total cryptocurrency market capitalisation as of the end of 2021, compared to the year prior. Bitcoin’s market dominance has tended to move in the opposite direction as the market — during bull runs, Bitcoin’s dominance declines as smaller projects see outsized returns and growth. In the past, this has been reversed during bear markets, as unsuccessful projects lose traction and market share returns to Bitcoin.
However, Bitcoin’s market dominance has barely recovered from the lows seen last year and sits at 42.1% as of the 22nd of December.
In February, we highlighted the launch of the DeFi ecosystem on the Cardano blockchain, showcasing the increased developer activity compared to other chains. Cardano has incredible backing from its community and this move came with an expectation of growth in the DeFi landscape.
DeFi has, however, been in a severe downtrend this year and Cardano’s ecosystem has not flourished. TVL sits at just $59mn as of the end of November, and is well below competing chains like Ethereum, Binance Smart Chain, Avalanche and Solana.
The weak macroeconomic environment became clear in March, as such, we illustrated that yield curve spreads were close to reaching negative territory, historically an indicator of an incoming recession.
The macroeconomic picture has worsened since, with continued elevated inflation figures and severe interest rate increases by the Federal Reserve. Yield spreads turned negative in September and remained negative since — reaching -84 basis points on the 7th of December, suggesting a recession is still to come.
Activity on the Avalanche network surged at the start of 2022 in the run-up to the launch of its first subnet, DFK. On April 2, the number of combined transactions in AVAX C-Chain and DFK subnet surpassed the number of transactions in Ethereum for the first time in its history.
Transaction count for AVAX subnets has continued to trend upward throughout the year, with a peak of over 3.9m transactions taking place on the 17th of September. Active addresses, however, have trended downwards.
In May, we witnessed the collapse of the Terra Luna ecosystem, which saw the collapse of the algorithmic stablecoin UST’s, which fell from its pegged price of $1 to $0.078, and then later to $0.006.
For our chart of the week, we examined the LUNA token, which saw over 6 trillion tokens minted, diluting the price of Luna down to $0.00000953. As a result, LUNA’s market capitalization fell from $41.2bn to $6.6mn, the largest destruction of wealth in this amount of time in a
single project in crypto’s history.
As of writing, Luna Classic is worth $0.00013810 per token with a market capitalisation of just over $800m.
Following the collapse of the Terra ecosystem and the insolvency of various crypto lenders at the end of the first half of the year, in June we highlighted Bitcoin’s weak performance — with 9 consecutive weeks of price declines. Bitcoin has deteriorated further, hitting a low of $15,481 in November, a further 47.4% decline from the levels shared in June.
Given the severe stress events the industry faced in May and June, in July we highlighted how traders had been reacting to this news. As above, daily transactions skyrocketed following the crash of Terra and the insolvency news of Celsius Network. This reached levels only previously seen during the peak of the bull run in November of 2021.
Despite the downward trend in markets, open interest rose in the month of August, particularly for ETH pairs. This was due in anticipation of the Ethereum Merge that took place on the 15th of September, which saw market participants trade the news heavily prior to the event.
We continued to compare trading activity for BTC and ETH in September, this time looking at futures volumes via CCData’s derivative data. August was the first month in the year where ETH futures volumes surpassed BTC volumes — $997mn and $968mn respectively.
On the 8th of September, the price of ETH relative to BTC hit 0.0848 — the highest level throughout the whole year.
Following the release of CCData’s Exchange Benchmark in October, we looked at the relationship between trading volumes and 1% market depth on top-tier exchanges.
As above, Binance has outsized volumes and depth liquidity compared to competitors — their dominance in the market has risen after this observation with the collapse of FTX.
Prior to the collapse of FTX in November, we noted that volatility had reached a yearly low at the end of October, with Bitcoin’s volatility reaching 26.8% in October, comparable to that of traditional assets like equities.
The bankruptcy of FTX two weeks later saw a rapid rise in volatility, particularly for assets more heavily linked to the exchange, such as Solana — Solana’s volatility rose to multi-year highs at the end of November, reaching 243% on November 3rd.
One of the things we pointed out in December is the return of Bitcoin’s trading dominance. Market participants have moved away from smaller and riskier projects to trading Bitcoin, the asset with the least volatility in the crypto space (excluding stablecoins). The bitcoin trading dominance has increased from 19.5% in January to 47.0% in December.
Thank you for joining us as we recapped some of our favourite Charts of the Week from 2022. We hope you enjoy your festive holidays and look forward to seeing you again in the New Year.
Disclaimer: Please note that the content of this blog post was created prior to our company's rebranding from CryptoCompare to CCData.
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