Bitcoin Miners Are Not Currently Selling

Leonardo Perez
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Bitcoin Miners Are Not Currently Selling

As there has been a decline in network activity, Bitcoin miners’ income has fallen to its lowest level in the past year.

Taking into consideration the Mining Position Index [MPI], Bitcoin is currently in its longest period of reduced selling pressure from miners post-Halving, pseudonymous CryptoQuant analyst Papi found in a new report.

BTC’s MPI measures the relationship between the currency’s total miner outflow in US dollars and its one-year moving average of total miner outflow, also valued in dollars. The moment BTC’s MPI rises, it implies that miners are selling more of their holdings. When it decreases, it suggests that they are holding on to their assets or accumulating more.

Data provided by CryptoQuant indicates that BTC’s MPI recently reached -0.23. This metric has been declining by more than 100%, after having reached a year-to-date (YTD) high of 9.43 on January 8.

In his report, Papi also described the collapse of the BTC Multiple Puell, which has caused the income of miners to fall to its lowest level in a year.

It should be noted that the BTC Puell Multiple tracks the profitability of miners by measuring the daily issuance of new coins relative to their 365-day moving average. If the metric value is high, it means that miners are generating revenue relative to the historical average. When the metric decreases, though, miners’ income is low compared to the historical average.

As of now, BTC’s Puell Multiple was 0.69, having sunk to a yearly low of 0.67 on May 1. According to CryptoQuant data, this metric last reached 0.6 in February 2023.

Miners “Pay the Price”

After the Bitcoin Halving event, average transaction fees on the network increased, due to an increase in activity around Runas. However, as the hype around the protocol begins to die down, transaction counts on the network have plummeted, impacting network fees.

The “engraving” of runes on the Bitcoin network raised its average transaction fee, assessed on a seven-day moving average, to a high of $40 on April 24, according to the data dashboard known as “El Bloque.”

As network activity normalized, though, network rates trended downward. As of May 5, network users paid an average transaction fee of $6, representing an 85% drop from the April 24 high.

Due to this decrease, the percentage of miners’ income derived from network fees also decreased. According to data provided by Messari on April 20, miners obtained 74% of their income from network fees.

However, by May 5, it had been reduced due to the drop in network activity. Just 22% of miners’ income came from transaction fees on the network.

Bitcoin Mining Faces Challenges After Halving, Twitter Founder Proposes Solution

The founder of Twitter (now X) and current CEO of Block, Jack Dorsey, announced that his company has already finished producing its 3-nanometer chips for Bitcoin mining, and that now his job will be to create a “new Bitcoin mining design “, along with a “leading semiconductor factory.”

In 2021 Dorsey stated that “Mining is not accessible to everyone.” From that idea, work has been underway towards a new mining system, which promises to be decentralized, more economical and based on its own processor.

Mining processors, according to Dorsey, are produced by very few manufacturers, among which only two companies have the capacity to produce 3 nanometer chips on a large scale: Samsung and TSMC. With one of these, it is believed that Block has established alliances for the production of its Bitcoin mining processors.

By Leonardo Perez

Is the Ethereum Bull Market Back, or Is There Another Drop Below $3,000?

Audy Castañeda
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Is the Ethereum Bull Market Back, or Is There Another Drop Below $3,000?

The Ethereum price continues its uptrend following a rejection of the $4,000 resistance level. The bulls are now showing signs of strength, perhaps staging a more sizable rally.

According to TradingView’s 4-hour chart, Ethereum price has been recording lower highs and lower lows within a descending channel since failing to break above the $4,000 resistance level. The cryptocurrency has been climbing back above $3,000 and the channel’s midline, though.

If the market manages to successfully recover to such levels, a break above the channel and a continuation towards $4,000 or even higher prices can be anticipated.

The 4-hour chart offers a much more illuminating picture of the recent price action. The market has barely broken through the $3,000 resistance zone, and is currently testing the midline of the descending channel.

As the RSI shows values ​​above 50%, ETH is likely to break above the level and potentially continue towards the $3,600 resistance area. In such a scenario, market participants may be optimistic that a new bullish wave will begin soon.

Ethereum’s Funding Rates

A significant number of futures traders have been liquidated or their long positions reversed following the recent Ethereum price drop. This could be a good sign, given that the futures market seems to have cooled down.

A chart presented by CryptoQuant shows the Ethereum funding rates metric, which measures whether buyers or sellers are executing their futures orders more aggressively, using market orders. Thus, positive values ​​suggest bullish sentiment, while negative values ​​show bearish trends.

The evidence provided shows that financing rates have decreased significantly, compared to levels a couple of months ago. Low but positive funding rates are usually indicative of a bullish signal, as while the futures market is not overheated, demand continues and the price may soon rise further.

New Ethereum Addresses Retest Record Number

According to data provided by Santiment, Ethereum experienced the highest daily creation of new addresses between May 4 and 5, marking the first time in almost two years.

“Ethereum rebounded back above $3,200 this weekend, and saw massive network growth. 196.71K new addresses were created on the $ETH network on May 4, 2024, the largest single day of growth since October 8, 2022,” Santiment posted yesterday on X.

At the close of business yesterday, the daily new address count had dropped to around 115,000, and declined further to around 33,000 more recently. Such an influx was anticipated, given Ethereum’s previous flirtation with the $4,000 range this year.

The influx of these new addresses likely previews Ethereum’s potential to retest and surpass that price threshold. The last time an influx occurred was in October 2022, and the price of ETH rose months later.

New Ethereum Addresses Not Activated Yet

The number of daily active Ethereum addresses has increased since March. According to the analysis carried out by AMBCrypto, this number has remained constant above 500,000, falling below this threshold only occasionally.

On May 4 and 5, the count was between 560,000 and 556,000, respectively, with no discernible trends observed. The count for May 6 was 536,000. Today the count was around 160,000.

Although this data suggests a healthy level of activity on the network, the recent influx of new addresses has yet to have a significant impact, and therefore they will have to settle for watching from the sidelines for the time being.

By Audy Castaneda

Low Ethereum Gas Fees Drive ETH Burn Rate to Yearly Lows

Leonardo Perez
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Low Ethereum Gas Fees Drive ETH Burn Rate to Yearly Lows

Currently, gas rates are reaching minimum levels not seen since 2022, which directly affects the issuance of ETH, according to data in Blockchain.

Ethereum has been experiencing a drop in the amount of ETH burned, reaching its lowest level this year. This is due to a recent drop in average gas rates.

Blockchain provides data according to which gas fees range between 5 and 10 gwei, which is considered one of the lowest levels seen this year, directly affecting the burning of ETH.

Last Sunday, the amount of ETH burned reached just 610 ETH, which is considered an all-time low for 2024, as Ethereum gas fees have remained at minimum values. In comparison, the daily ETH burning amount between January and April this year remained in a range between 2,500 and 3,000 ETH.

The decrease in gas rates could also be attributed to a shift in activity towards L2 scaling solutions. Another possible cause would be the increasing adoption of Blob transactions, introduced with the Dencum update in March, which drove the reduction of transaction costs in Ethereum’s L2 layers. However, experts consider that low gas rates represent a possible rally for the token.

In this regard, analysts from the Santiment crypto analysis platform say the following:

“While markets have been pulling back for the past 6 weeks, the lack of demand and network strain could help turn the tide for ETH and associated altcoins sooner than many might expect.”

Even though low fees benefit Ethereum users, the decrease in ETH burning affects the deflationary aspects of the network. The “London” Hard Fork, which took place in August 2021, definitively changed the fee structure of Ethereum, as said update introduced a base fee that is burned, as well as a fee that acts as a tip for validators.

Thus, since base fees are directly tied to network usage, higher fees result in a larger amount of ETH being removed through burning.

On the other hand, Ultrasound Money provided data indicating that a couple of weeks ago the supply of Ethereum became inflationary, with a supply growth rate of 0.49%, compared to its previous deflationary nature.

Regarding this, experts point out that if activity recovers and more ETH is burned than is issued, Ethereum could once again be a deflationary asset.

Ethereum Gas Fees Drop as SEC Evaluates ETH ETFs

While the reduction of Ethereum gas fees occurs, the US SEC is waiting to make a decision on US Ethereum Spot EFTs.

As it may be recalled, the SEC postponed its decision on Ethereum spot EFTs proposed by Hashdex and Ark 21Shares in March. In the case of the first, the SEC set May 30 as the deadline for a decision, while for the second it proposed May 24.

Various experts, though, have pointed out that the SEC will probably deny Ethereum spot EFTs now in May, which would be a serious setback for the cryptocurrency industry, which expected that Bitcoin Spot ETFs, approved in early 2024, They could pave the way for other similar digital products, and thus drive the widespread adoption of cryptocurrencies.

All in all, the dynamics of gas fees and ETH burning is a paramount aspect of Ethereum, which continues to capture the attention of the community, while the network continues to evolve.

By Leonardo Perez

Why Sui Overtook Solana in Activity

Audy Castañeda
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Why Sui Overtook Solana in Activity

The Spam token is responsible for these high revolutions experienced by Sui.

Sui, a blockchain focused on scalability, recently surpassed Solana in network activity. Thus, on May 3, said network registered 41 million transactions.

Spam is an active Sui token, which aims to stress test the network’s capabilities. To do this, it assigns tokens to users, equivalent to the number of transactions made. According to information provided by the Artemis statistics portal, the momentum of this token overwhelmed some of the most powerful multipurpose networks.

Sui is considered one of the most promising blockchains in the cryptocurrency market, due to its extensive capacity in processing transactions with minimal commission costs. Thus, the first layer offers enormous advantages over large ecosystems like Ethereum.

In addition, Sui has a team of high-level experts. Some of its developers come from the Meta cryptocurrency project, formerly known as Facebook. That is, it is as if it were Diem, but without Mark Zuckerberg behind it.

On May 4, @MartyParty, crypto Commentator and host of X Spaces, published the following:

“Update on @SuiNetwork loadtest this week: The #SUI network has seen a successful community driven loadtest using the http://spamsui.com web miner platform this week. Numbers are impressive peaking at 863 tps settling at 650tps (…)

SUI initiated a controlled load test in July 2023 hitting 60m+ transactions but this community test is the next phase in testing this Gen 3 layer 1.”

Does Sui Have the Conditions to Overcome Solana?

Now that Sui has surpassed Solana in activity volume, some bold claims have emerged, including social media users asserting that Sui could make Solana obsolete, just as Solana once did with Ethereum.

Regardless of whether this opinion has any valid basis, the truth is that the results of the recent Spam test could be considered extraordinary. Experts like MartyParty maintain that, during the test, 65 million transactions were operated on the network fluidly and without problems.

MartyParty asserted via X that the blockchain’s performance reached 863 transactions per second (tps). Those numbers are expected to continue increasing as more tokens are issued. Until now, it is said that approximately 60 thousand users have participated in said test.

Those who developed the Spam token created a complex mechanism, with a wallet from which users can carry out their operations. Additionally, rewards for transactions sent in this stress-proof coin can be calculated from there. The fact that Sui has surpassed Solana in said test does not necessarily imply that Sui has more users.

Meanwhile, What Is Happening with Solana and Ethereum?

Amid the surge in Sui trading, Solana is in a battle to recover from a notable downtrend since last month, when it retreated from highs near $200, to its current price of around $146.18.

Ethereum, on the other hand, remains stable with an approximate price of $3,137.08, reflecting the most recent figures. Amid this stability, Ethereum is experiencing an increase in the creation of new wallets, with a figure of 267,000 registered. This indicates renewed interest in Ethereum, as well as increased participation in its ecosystem, reflecting its enduring appeal.

By Audy Castaneda

This Week’s DeFi Highlights

Leonardo Perez
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This Week’s DeFi Highlights

The sector remained in the fight, although finally its numbers were negative. On the other hand, individual projects gave notable signs of progress, such as the case of SIU, with the new liquidity strategies of Turbos Finance.

The DeFi sector presented some interesting news this week. It is important to keep in mind that this sector is completely dependent on everything that happens with the cryptocurrency spot market, specifically Bitcoin.

Among the most important points this week in the world of DeFi, the impact they suffered with the collapse of Bitcoin stands out.

DeFi TVL Steady This Week Despite Shakedown

On Tuesday, April 30, after the price of BTC lost the 60K support, the total value locked of DeFi also plummeted. At that time, it accumulated $88 billion dollars, placing itself further and further away from $100 billion. However, the recovery allowed them to once again surpass the $90 billion barrier.

Volume is also constantly increasing and the cumulative 24-hour average is expected to remain above $4.1 billion. As far as the most powerful networks go, there were no major surprises with Ethereum, which racked up more than half of the TVL of all decentralized finance. In second place remains Tron, followed by BNB Chain and Solana.

If the BTC price manages to break above 65K, the chances of the TVL returning to $100 billion are high. In any case, the chances of that happening this week in DeFi are significant.

This Week’s Highlights

Considering the TVL statistics, it can be said that, although the sector ended the week in the red, it at least rescued some space. On the other hand, among the notable news from the DeFi world this week, the following stand out:

Turbos Finance promotes new liquidity strategies in SUI, which aim to revolutionize automated liquidity management and simplify liquidity provision.

The first strategy is a network-centric automated liquidity management vault for CLMM positions on Turbos DEX within the Sui network. The second is an innovative automatic swapping capability combined with dollar-cost averaging (DCA) strategies aimed at simplifying liquidity provision.

Liquidity providers (LPs), with these automated rebalancing vaults, can increase their returns with less effort.

Synethix founder Kain Warwick is targeting the launch of the Infinex DEX. May 13 would mark the launch of Infinex Account, which is described by the Infinex team as a “collection of cross-chain smart contracts that can be controlled, secured and recovered” via Web2 authentication, as the startup session of an email address.

Warwick noted that Infinex would use social passkeys to allow users to log in through Web2 applications – such as a Google account – and reduce the “friction” that typically accompanies a standard Web3 user experience.

Matera raises $3.6 million to boost the creator economy by merging DeFi with social media. The capital will be used to build a platform aimed at addressing the monetization challenges prevalent in the creator economy.

The funding round saw participation from several renowned companies, including Sidedoor Ventures, HighCass Crypto, Medusa Ventures, The Sandbox, and Saxon Partners. The capital raised will be instrumental in developing a platform that can effectively address the monetization issues that creators often encounter.

dWallet Network integrates with Monad, a pioneer in multi-chain DeFi. According to an official press release, dWallet Network plans to allow developers to leverage decentralized building blocks to create multi-chain DeFi applications without collusion and with high decentralization.

This integration is expected to position Monad as a leading EVM venue to utilize dWallet technology and provide developers with efficiency and scalability to innovate in DeFi.

By Leonardo Perez

Will Crypto Markets Continue to Rise Thanks to This Week’s Economic Data?

Audy Castañeda
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Will Crypto Markets Continue to Rise Thanks to This Week’s Economic Data?

Markets rallied strongly following the Federal Reserve’s pivot last week and the assumption that more liquidity would be injected.

The total crypto capitalization returned to pre-pullback levels, closing again at $2.5 trillion over the weekend and returning to the middle of its range-bound channel.

This week’s economic calendar, it appears, will not be as volatile as last week’s. “After several weeks of uninterrupted economic and inflation data, the markets are beginning to digest this week,” commented the Kobeissi Letter.

“There are multiple macro related news this week, but the impact is limited, and unsurprisingly the Fed has maintained current rates in recent months,” as crypto derivatives provider Greeks Live posted on X.

Economic Calendar

This Tuesday, the change in consumer credit for March will be reported, which describes the change in the total amount of outstanding credit extended to individuals for personal expenses. Investors and analysts will pay attention to this information, due to the existing correlation with both consumer confidence and spending trends.

On Thursday, initial jobless claims data will be released. These are expected to be slightly higher than the previous month.

The Michigan Consumer Sentiment Index for May will issue a preliminary reading on Friday. This is a report that includes the results of a monthly survey on consumer confidence levels.

Also on Friday, the preliminary May Consumer Inflation Expectations Report will be released. This survey by University of Michigan analyzes consumer views on long-term inflation and is used as a component of the Federal Reserve’s inflation expectations calculations.

Besides the economic reports, the Federal Reserve will present eight speeches this week and with negative data on inflation and employment, these could cause some volatility.

There are several major earnings reports released this week, but none of them are related to the digital asset markets.

Crypto Market Outlook

Crypto markets rose 1.7% on the day to reach $2.49 trillion during the Asian trading session on Monday morning.

Weekend volumes were moderate, but gains held and Bitcoin regained key price levels. The asset is currently trading at around $64,000, having hit an intraday high of $64,500 in late trading on Sunday.

CryptoPredictions forecasts that the BTC price today May 6 will be in the $56,609.085 – $83,248.655 price range. Likewise, Bitcoin is predicted to end today at $66,598,924.

Ethereum prices are up 1.6% to $3,170. The asset has also returned to its consolidation channel and did not spend much time below $3,000., The ETH Price is forecast for today (06.05.2024) to be in the $3,059.955 – $4,499.934 price range. Ethereum is predicted to end today at $3,599,947, says CryptoPredictions

Altcoins are also showing marginal gains today. Toncoin (TON), Near Protocol (NEAR), and AI tokens Fetch.ai (FET) and Render (RNDR) are doing particularly well.

According to data from May 3, Toncoin (TON) is finding support in the zone between the 50% Fibonacci retracement level of $4.90 and the 61.8% retracement level of $4.25. Regarding Near Protocol, a rally seems like a remote possibility.

By Audy Castaneda

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