Willy Woo: The market outlook for 2021 is very positive
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A new week on the chain
Bitcoin Market Health
Bitcoin Market Health
Bitcoin, along with the rest of the crypto market, has had a volatile week. The price of BTC surpassed $18,600 at the beginning of the week, before rising above $19,000. On Thursday, BTC fell sharply on Thursday and found support at $16,500 before slowly rising to end the week at $18,145.
bull market
bull market
The number of active entities (level 3) on the BTC blockchain has been steadily increasing throughout 2020, and the number of active entities per day is now close to 400,000, which is less than 4% from the previous all-time high. It was higher than current levels only once during the bull market in late 2017.
This increase in on-chain activity means increased adoption and usage of the network. However, unlike the last bull run, the number of new entities (tier 3) is still relatively low.
bear market
bear market
Contrary to this bullish view is the subject-adjusted ASOL (tier three), which shows that the average age of coins being traded is rapidly increasing. A generally higher value means that old coins are being moved, which could mean that long-term holders are realizing profits.
On November 28, the average trading time for coins was 43.9 days. The last time the subject-adjusted ASOL (Average Spent Output Lifespan) was this high was in January 2018, when long-term holders sold BTC as it fell from its all-time high. The recent surge shows that long-term holders have realized the profits of the past few years, an analysis supported by the growth of Coin Burn Day (No. 2) and LTH-SOPR (No. 3).
Bullish comments from Willy Woo
Bullish comments from Willy Woo
The re-accumulation phase of this round of bull market coincides with the period of the longest and most depleted BTC inventory on spot exchanges in the 12-year history of BTC.
The consumption has been going on for 10 months so far, doubling the 5-month span of the previous cycle. Likewise, transfers out of exchanges and into cold wallets accounted for 19%, compared to 11% in the previous cycle. With this in mind, the outlook for 2021 is expected to be very positive.
While the market may need to cool off locally after a strong rally in November, the long-term market structure is extremely bullish. The next few weeks are expected to be the last chance to buy on the bottom before Bitcoin breaks through its all-time high and begins its price discovery phase above $20,000.
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Altcoin Feature: The end of UNI Staking leads to a decline in the supply of WBTC in smart contracts
Between September 17th and November 17th, Uniswap offered the opportunity to earn UNI Tokens by providing liquidity to any of four ETH-based liquidity pools. The largest of these pools is ETH/WBTC, which attracted over $800 million in liquidity at its peak.
This caused a large amount of ETH and WBTC to be locked in the smart contract when the user UNI Token was mined. But on the day that mining ends, the percentage of locked supply for both assets drops (secondary) — and for WBTC the drop is especially steep.
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Liquidity on Uniswap decreased by $1.3 billion after mining ended (source: uniswap.info)
The other assets that support UNI yield farming (DAI, USDC, and USDT) saw smaller – but still significant – drops compared to WBTC (3.95, 1.45, and 0.63 points, respectively).
It is worth noting that despite the fact that more than $1 billion worth of ETH is locked in these pools, the price of ETH has not been affected by the return of these coins to the market, indicating that their owners continue to hold on to them even after the pledge ends. have them.
