July 2022 in numbers: the market is preparing for The Merge and leaves the zone of extreme fear

Securities of the vast majority of public cryptocurrencies and miners showed growth after the general restoration of the market. The exception was Voyager Digital broker, which submitted a bankruptcy statement. The record holder https://gagarin.news/news/australias-fight-against-crypto-scams-has-reached-a-new-level/ of the month was Marathon Digital, the shares of which grew by 140%. The company announced the commitment of Hodl Strategy, despite the significant pressure of sales by public miners.

Macroeconomic background

According to the results of the meeting in July, the Fed again raised the key rate – at once by 75 b. P. (up to 2.25%-2.5%).
The head of the Central Bank Jerome Powell warned that in September it was worth waiting for a “big increase” of the indicator. But the market focused on the phrase that “the subsequent steps of the monetary authorities will depend on the nature of the incoming data”.
Investors began to bet on the strengthening of recession signals in the economy, which were subsequently confirmed in the first assessment of GDP for the second quarter. This can make the Federal Reserve Complete the tightening cycle before predicted.
Powell -named Pauell’s inflation indicators – PCE Price Index and the cost of labor – have not yet confirmed the passage of the peak of consumer price growth.

The market counts on raising the key rate in September by 0.5% (the probability increased from 53.1% on the eve of the Federal Set of Fed to 70.5%) and final increase by 0.25% in November and December.
By the end of July, the restoration of the stock market and bitcoin continued. In August, the situation can be changed by the rhetoric of representatives of the Fed (a positive conjuncture is able to entail tightening signals) and a new portion of macroeconomic data in the United States. The focus will be ISM (August 3) and the labor market report (August 5). In the context of inflation expectations – a meeting of OPEC+ August 3.

Market moods, correlations and volatility

Compared to June in July, the average value of the “index of fear and greed” has more than doubled (11.3 versus 24.2). However, the indicator failed to go beyond the range of “fear” – at the local peak it rose to the mark 42.
Since mid -May, the indicator was in the Zone of “Extreme Fear” and left it only at the beginning of last month. This indicates a change in the mood of investors and is one of the signs of a potential breaking market trend.

The correlation of bitcoin with the American stock market is strengthened for the second month for a row. A 90-day sliding average indicator was 0.64 for index S&P 500 and 0.58 for Dow Jones.
This dynamics indicates an increase in the influence of macroeconomic factors on the digital asset market. Moreover, the latter reacts similar to the traditional sectors.
The statistical relationship of the first cryptocurrency with gold also strengthened (0.15 versus 0.06 in June), but it remains quite weak.

In July, the averaged value of the historical volatility of the Bitcoin price (smoothed with a 30-day sliding average) amounted to 5.13%, which is significantly higher than the June indicator (3.46%).
The Sharpe coefficient averaged in 30 days (does not take into account the risk -free rate) indicates that Ethereum was adjusted to the risk in July, one of the most effective assets.
In June, the coefficient of Sharpe for Bitcoin and Ethereum took negative values. The growth of the indicator also indicates a potential change in the market trend, since investors’ appetite to risky assets with high probability will increase.

Onchain-data

Despite the decrease in bitcoin price, the number of addresses with a balance of 1 BTC is growing more confidently (+9.4% since the beginning of the year). At the end of July, the indicator reached a historical maximum at the mark of 891 009. Its growth indicates the desire for accumulation among retail investors, as well as a possible increase in the number of market participants.
The situation with the addresses of the category “≥ 1 ETH” is even brighter, the number of which has increased by 15.7% since the beginning of the year.

In July, against the background of consolidation and subsequent smooth restoration of bitcoin price, the Puell Multiple indicator began to leave the Green Zone, which means deep resale.
The metric of Net Unrealized Profit/Loss (NUPL) also signals the passage of the period of surrender and improving moods among investors . The indicator moved to the “Nadezhda/Fear” zone, heading for “Optimism”.

July 28, the MVRV Z-Score indicator crossed the upper boundary of the deep respodency zone at 0.1 mark. This is another signal about the passage of the “bottom” of the market cycle.
Bitcoin’s course exceeded the level of realized value. This indicates an improvement in market moods and that many investors have stopped fixing losses.

Ethereum

Since the activation of the EIP-1559 in August 2021, the Ethereum network has withdrawn over 2.5 million ETH from circulation. Compared to the last month in July, the rate of combustion of coins halved – 120,000 ETH against 60,000 ETH.
Such dynamics is explained by a decrease in activity on decentralized exchanges and NFT marketplaces, which are the main combustions. This, in turn, is associated with the unstable market conditions.
Against the background of the local Ethereum rally, in the second half of the month there was an influx of assets on the wallets of centralized exchanges. The share of the ETH DEFI applications blocked in smart contracts has decreased by almost 1%.

According to the results of July, the amount of ETH at the Ethereum 2 deposit contract.0 exceeded 13.18 million coins. During the month, the indicator increased by 1.5% – last month the increase was 1.9%, in May – 5.4%.
The number of participants interacting with the second Ethereum iteration for the reporting period increased by 1.6% (1.9% in June).
Reducing the growth rate of these indicators is slightly and can be explained by a discount on the LIDO STEH tokens, which are 2.5% below the original asset (on the Curve platform).
The number of addresses with a balance ≥ 32 ETH steadily continues to grow. According to the results of July, the indicator exceeded 177,000 (+2.5% compared to the last month).

Lightning Network

In July, the capacity of the Lightning Network (LN) bitcoin network exceeded 4419 BTC – compared to the last month, 10% added value.
The growth of capacity was accompanied by a slight increase in the number of channels – by 2.5% for the reporting period. The number of NODs LN remained almost unchanged.

Mining, hashrate, commissions

Heshrait bitcoin (7 ma) increased by 4% – to 211.93 eh/s. Since the beginning of the year, the indicator has increased by 16.6%. The drift of the Heshrait growth could serve as a gradual restoration of bitcoin, thanks to which more old mining equipment “returned”.
As a result of the latter recalculation, the difficulty of mining of the first cryptocurrency decreased by 5.01% – to 27.69 tons. This has become the maximum reduction in the indicator since the beginning of the year.
As the hashReit increases against the background of restoration of bitcoin prices, it is worth expecting the resumption of complexity growth.

In July, the average commission for Ethereum transaction continued to fall (-47% per month). Only occasionally the indicator exceeded $ 4. This is a sign of reduction in activity in Defi and NFT segments.
The daily volume of commissions on the Ethereum network in July was only ~ 2.5% of the peak indicators of November (~ $ 1.9 million versus ~ $ 82 million). At the end of last year, the average transaction commission basically exceeded $ 50.
In July, commissions on the Bitcoin network remained practically unchanged, only occasionally exceeding $ 2. It is also a sign of low onchain.

In July, the total income of the Bitcoin Mainers decreased by 9%, amounting to $ 609.7 million. The indicator has been falling since March, but the pace of its reduction has slowed down. This indicates the probable completion of the period of surrender of miners.
The total income of Ethereum Mainers decreased by only 4%, although in the last period the fall exceeded 50%. It is also an argument in favor of passing the bottom of the market cycle.

The volume of trading

The volume of trading on leading cryptocurrency exchanges has remained unchanged since last month, reaching $ 660 billion.
FTX for three months is ahead of Coinbase and holds the second line in the overall rating of cryptocurrency exchanges. In July, the volume of trading on the platforms amounted to $ 56 and $ 51 billion, respectively. At the same time, Coinbase flew out of the three leaders, losing OKX from $ 54 billion. Binance with $ 428 billion remains unchanged leader.

Futures and options

In July, investors paid increased attention to futures contracts based on Ethereum – the volume of bidding reached $ 930 billion for the first time since May 2021. From 12 to 28 July, the daily indicator exceeded the equivalent of all contracts based on altcoins, and on certain days and derivatives for bitcoin.
A total open interest increased by 34.5% (from $ 19.5 billion to $ 26.2 billion). As Ethereum, the share of liquidations in the general indicator rises more than once exceeded the equivalent of bitcoin contracts.

Despite the lack of significant trade activity in the options segment, open interest with Ethereum contracts ahead of the Bitcoin Options and at the moment exceeded $ 7 billion. The indicator corresponded to the levels of May and November 2021, when the cryptocurrency market strove for new maximums.

In July, the volume of blocked funds (TVL) in smart contracts of decentralized applications increased by 18%, to $ 88.92 billion. This is partly due to the local rally in the market.
TVL of the permanent leader – Ethereum – increased to $ 51.28 billion ($ 42.83 billion in June). The value expressed in ETH, on the contrary, decreased by 22%, to 30.69 million ETH.
Tron ecosystem reached third in terms of blocked funds. During the month, liquidity influx in applications on the basis of this network amounted to almost 25 billion TRX (+41% by June).
The catalysts were the plan of the founder of the project by Justin Sana to spend up to $ 5 billion on the salvation of cryptocurrency companies and the fact that the team managed to restore the USDD algostyblicin to the US dollar.

According to the results of July, almost all the tokens of the Defi segment from the TOP-20 on capitalization were in the green zone-in the period from April to June 2022, the reverse situation was observed.
The best dynamics was shown by the YEARN FINANCE project token – in a month the price of YFI increased by 86%. An important role in this was played by integration by the ERC-4626 standard service.
The market value of Uniswap, Curve and Sushiswap tokens also has increased significantly. This indicates an increase in user interest in decentralized platforms.
Among the projects on Ethereum, TVL leaders hold the MakerDao platform ($ 8.45 billion). Lido reached the second place – in a month its indicator grew by 52%. In mid -July, the project team announced the launch of the liquid steiking service Ethereum 2.0 in the scaling networks of the second level.

Decentralized exchanges continue to dominate in the total TVL Defi sector – projects of this category account for over 31% of the indicator or $ 27.73 billion.
Landing services ($ 18.18 billion) were in second place, in the third-Cross-MOSTS ($ 11.68 billion).
The projects of the liquid stakes sphere from the TOP-5 sector of profitable farming, which indicates the popularity of this method of earnings among users of decentralized applications.
According to the results of July, the total capitalization of Bitcoins on the air increased to $ 6.5 billion. WBTC dominance index decreased to 84%.

In July, the average daily number of transactions in almost all networks in question decreased compared to the last month. In Avalanche, the indicator fell by 15%, however, this is also due to the traffic in the subnet.
The Ethereum blockchain on average processed 1 199 149 operations per day – 15.7% more than a month earlier. Increasing onchain-activity was affected by a decrease in transaction commissions-since the beginning of the year, the price of gas on the network has fallen by 86%.

DEX and L2

In July, the trading volume of leading decentralized Ethereum protocols reached $ 57.5 billion, dropping to minimum marks per year.
Uniswap dominates the segment. The turnover of the platform for the month amounted to almost $ 38 billion. Curve and Synthetix are closed by three, which continued a series of successful months with ~ $ 8 billion and ~ $ 2.5 billion, respectively.

The growth of the Ethereum course has led to an increase in TVL L2-protocols, while users deduced 17% of the total liquidity. Probably, more than 615 000 ETH went to the tools for maximizing profit as the market conditions improved.
More than 300,000 ETH of them left the Arbitrum protocol. One of the reasons could be the suspension of the Odyssey educational event last month. In the second half of July, the project developers launched a Nitro update, which was a prerequisite for the resumption of Odyssey (but the restart time is still not indicated), and also added support for the network for the USDD stablecoin from Tron.

Stebblecoins

In July, the market capitalization of stablecoins practically did not change and amounted to $ 152 billion.
The vast majority of issuers slightly reduced or slowed the emission of stable coins. The exception was the DAI from Maker (in a month the offer increased by $ 500 million).
AAVE and Curve Defi Protocols announced plans to develop their own algorithmic stablecoins. At the end of the month, the AAVE community approved the launch of GHO stable coin tied to the US dollar. Details about the launch of a similar product from Curve are still unsolved. It is only known that the asset will have similar to the USDD from the TRON mechanism of excessive support.

NFT and GameFi

The host of the NFT marketplace Opensea, which generates more than 85% of the total volume of trading in the segment, continues to record minimal indicators in 2022. The turnover at the end of the month amounted to $ 528 million.
Despite some positive in the context of an increase in activity with NFT collections, key indicators remain at record low levels. The exception was the Sorare platform, whose users made more than 400,000 transactions with collection cards for $ 32 million.
The hypothesis with volumes confirms the analysis of onchain. In July, a positive dynamics was shown by Ronin Ronin reinforced after a hacker attack. A slight increase in the number of transactions with NFT tokens is recorded in Flow and Immutable blockchains against the background of a general revitalization.

The activity of large players

In July, Tesla reported on the sale of 75% of bitcoins for cash. From the reporting it follows that the profit from the implementation of digital assets from the beginning of the year to June 30 amounted to $ 64 million.
Despite the sale of most of the digital gold, Tesla holds the second line of the rating of public companies with bitcoins on the balance sheet.
Microstrategy reserves in the first cryptocurrency remained unchanged. The head of the company Michael Saylor in July did not announce new Bitcoin purchases, but only criticized Ethereum and predicted his instability.

Open interest in adjustable bitcoin stores on CME continued growth last month-the total number of contracts of 5 BTC has increased by 9.1%.
There were no significant changes in the balance of power in July. Different categories of players hold approximately the same volumes of longs and shorts.
The same situation is about the same situation on Bitcoin microfites. The difference is only in the predominance of short positions among large players of the Commercial category.

In microfites on Ethereum, a slightly different situation: players of categories of Non-Commercial and Nonreportable are dominated by longs over shorts. This indicates the optimism of investors regarding the prospects of the second in the capitalization of cryptocurrency.
On the other hand, Commercial category players build short positions. The number of the latter per month increased by 42%.

Large venture rounds

$ 450 million

Variant Variant Venternaya company in two new funds focused on the Web3 sphere and Defi sector.

$ 150 million

APTOS blockchain platform team as part of the round of financing series A. It was led by FTX Ventures and Jump Crypto.

$ 100 million

Dubai 5ire during the round of series A. Funds will be directed to the development of blockchain friendly ecology based on Proof-OF-BENEFIT.

$ 100 million

SAFE digital asset control (previously Gnossus Safe) during the round of strategic financing, which headed the 1KX crypto fund.

$ 75 million

Operator Blockchain-IGR Animoca Brands. The company’s preliminary rating reached $ 5.9 billion.

$ 65 million

Decentralized registrar of domains Unstoppable Domains during the round of financing series A. Investors estimated the project at $ 1 billion.

Regulation

The head of SEC announced the development of methods for registering digital assets as securities.
Officials owning cryptocurrencies were banned to work on regulation of the industry.
The authorities indicated the terms of adoption of the bill on the regulation of cryptocurrencies.
CFTC will create a new unit for supervision of cryptocurrencies.

Authorities Singapore announced the tightening of cryptocurrency regulation against the background of the collapse of the Terra ecosystem and several companies.

International Organization of Securities Commissions (IOSCO) by the end of 2023 will develop regulatory standards for digital assets.

AT EU They proposed to extend the AML standards to NFT platforms, and stablecoins were called unsuitable means of payment.

AT Great Britain will study taxation of cryptolending operations and stake in Defi. The authorities included digital assets in the bill on financial markets.

Materials of the month

By the end of the second quarter of 2022, the manufacturer of Tesla electric cars converted approximately 75% of his own bitcoins in cash, which brought him $ 936 million, follows from the report.

According to Ilon Musk, the sale of cryptocurrency was due to the need to increase liquidity during the period of anti -icing restrictions in China. The company continues to hold Dogecoin.

On July 5, the New York court received a bankruptcy of the cryptocurrency broker Voyager Digital. The alleged obligations of the company are from $ 1 billion to $ 10 billion if there are about 100,000 customers.

The Three Arrows Capital (3ac) Foundation also became bankrupt in July and filed an appropriate application. It was his collapse that directly influenced the activities of Voyager – the latter lent 3ac 15 250 BTC and 350 million USDCs.

On July 14, the Celsius Network cryptolending platform and some of its subsidiaries became bankrupt. As of July 13, the company owned $ 4.3 billion assets. Its obligations to customers and creditors amounted to $ 5.5 billion.

In July, the developers of Ethereum approved the date of the upcoming transition of the Goerli dusk to the Proof-Of-Stake algorithm. The update will be the last line before the full -fledged deployment on the Ethereum network. For this reason, the community wondered “what will happen to miners?””. We offer readers to the attention of relevant materials: