CCData's weekly ‘Chart of the Week’ highlights topical digital asset developments with vital commentary and analysis.
This week's COTW examines the relationship between centralised (CEX) and decentralised exchange (DEX) volumes since 2021.
So far in November, CEX market share stands at 90.3%, slightly above the yearly average of 89.6%.
Interestingly, DEX volumes have soared to a record $292.54bn, reflecting a surge in on-chain activity.
Yet, despite this growth, CEXs remain firmly dominant as speculative activity picks up, driven by BTC’s approach to the $100k milestone.
While CEX market share has declined from 97.7% in January 2021 to its current level, the shift has been gradual, with dominance fluctuating between 88–91% in recent years.
This highlights the enduring strength of centralised platforms, even as decentralised alternatives gain traction.
This week’s Chart of the Week highlights May’s correlation of daily returns between BTC, ETH and the SP500, falling to 15.8% and 18.2%, respectively, the lowest level since August 2022.
Digital assets have benefitted from a significant price appreciation following signs that tight monetary policy and high interest rates may soon reach their peak. This comes after the recent collapse of Silicon Valley Bank, causing a stir in the banking system, and amplifying the interest in digital assets.
The depegging of USDC and regulatory issues with BUSD has led to Binance converting $1 billion of their Industry Recovery Initiative funds to BTC, ETH, and BNB, triggering further buy pressure for digital assets.
In this week’s Chart of the Week, we examine the impact of the recent presidential debate on crypto liquidity. Despite the potential for political events to cause market uncertainty, our data shows that liquidity levels for BTC/USDT remained stable throughout the debate.
In part, this is likely due to the fact that crypto and digital assets were absent from the discussion, with no significant shifts in the macroeconomic or regulatory outlook for the sector.
This lack of discourse likely contributed to the muted market reaction, contrasting with previous political events that have triggered sharper fluctuations. For example, the Trump-Biden debate led to more noticeable fluctuations in liquidity.
In this week's Chart of the Week, we analyse Bitcoin's performance and volatility from September 2010 to 2023.
While history doesn’t repeat itself, September has consistently been one of the worst months for Bitcoin in terms of price performance, with only six positive Septembers recorded in the asset's history.
Since 2010, Bitcoin's average returns in September has averaged -4.51%, making it the worst-performing month on record.
In contrast, April and November typically show the highest average returns, followed closely by October - with returns of 35.6%, 39.2% and 28.7%, respectively.
Since 2017, September has reliably brought negative returns for Bitcoin, with particularly steep declines in 2019 (-13.60%) and 2014 (-19.40%). However, 2023 has bucked this trend with a modest return of 4.00%. Despite these returns, Bitcoin's annualised volatility in September isn't notably high compared to other months, averaging around 79.2%.
Recent developments in the Bitcoin market reflect a strong bullish sentiment, largely driven by expectations of interest rate cuts from the Federal Reserve and the positive stance of several U.S. presidential candidates on cryptocurrencies.
This optimism has been clearly indicated in the options market. On Deribit, the leading exchange for Bitcoin options, the open interest has seen a substantial increase of 32.5% since the beginning of the month, currently standing at around 230,000 Bitcoin, equivalent to approximately $14.3 billion.
A noteworthy aspect of this trend is the low put-to-call ratio, which signals a preference for call options over puts, indicating that investors are more focused on potential upward price movement. Furthermore, a significant portion of the open interest is concentrated in call options targeting the $100,000 strike price, followed closely by options at the $90,000 level.
This concentration underscores the bullish sentiment among market participants, reflecting widespread confidence in Bitcoin's potential to reach new highs in the near term.
In this week's Chart of the Week, we analysed the current top 500 coins by market capitalisation and compared their prices to the previous years from 2021. Out of the 249 coins listed in 2021 within the sample set, 119 are currently trading at price levels below their 2021 low.
More surprisingly, 80 of the coins are currently at price levels lower than the bear market lows of 2022. The recent price action of digital assets also meant that 72 of the current top 500 assets are currently trading at lower than their 2023 lows. This price action underscores the shift of capital towards a few select assets, contrasting sharply with previous bull markets. Notably, many popular assets from past cycles have dropped out of the top 500, highlighting the need to stay updated on emerging projects as capital flows toward newer, more promising coins.
This week’s Chart of the Week examines crypto Open Interest following the leverage wipeout that took place on August 5th, which saw Bitcoin record an intraday drawdown of 15.4% to $49,202 - the highest since FTX’s collapse. This news came on the back of numerous macroeconomic events, including the unwinding of the Japanese Yen carry trade, further geopolitical tensions, and recession scares in the U.S. This saw OI on centralised exchanges fall by roughly 18.4% to 31.9bn, the highest open interest wipeout since August 2023.
SUI remains a significant outlier in the market, having seen an Open Interest increase of roughly 505% since the low, from roughly $40mn to $240mn on aggregate across exchanges. CRV follows in 2nd, seeing a 113% increase from roughly $47mn to $100mn. Following suit, SEI, TIA, ONDO and APT all experienced OI increases between 58% and 52% respectively. Interestingly, only one memecoin has maintained a position in the top 10, WIF, seeing a 34% increase in OI from $142mn to $191mn.
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