LD Capital: TRB short-term funding analysis [*Premium]
Original author: Duoduo, LD Capital
Recently, the performance of the cryptocurrency market has been weak, and funds have continued to flow out. The volatility of Bitcoin and Ethereum is low, and they are in a downward shock stage, and the transaction volume is sluggish. Existing funds are mainly concentrated on individual projects for short-term speculation. So, how to find financial trading opportunities?
The author observed and tracked the short-term capital situation of TRB (Tellor Tributes, providing oracle service), trying to find some signals before the start of the rise; then understand the fundamental situation, mainly to see whether there are positive or negative. From August 25 to the early morning of August 28, the price of TRB tokens rose from $9.6 to $16, an increase of nearly 66%, and then entered a correction.
1. Funding situation
Let’s first look at the basic information of the token. The total supply of tokens is about 2.49 million, and the circulation is 2.48 million, which is basically in full circulation.
The top ten holdings on August 26 are as follows. Binance holds more than 43% of the tokens, and the token concentration is relatively high.
After the sharp drop on August 18, TRB’s price entered the lowest price range so far this year and the lowest range so far in 2021. After a few days of volatility, the daily line found support again near $9.5.
On August 21, it was observed that there was a large amount of transfers on the chain, which was the highest level since January this year and was much larger than the previous data. Meanwhile, the price has not seen major moves, remaining near $10. We believe that someone may be opening a position on the chain at this time, so we will further pay attention to the changes in contract trading volume and positions. However, the abnormal transfer on the chain does not necessarily represent the behavior of opening a position. It needs to be considered in combination with the price range of the token, whether there are abnormal events, subsequent transaction volume and price changes, etc.
On the morning of August 26, a steady increase in contract volume and open interest was observed. Meanwhile, the price broke above the upper edge of the 4-hours bottom price range.
The chart below shows derivatives data on the morning of August 26. 24-hour contract trading volume increased by 151%, and contract positions increased by 93%. The positions of large accounts are in a long state, and the account long-short ratio is 0.96, indicating that a large number of retail investors are short. At this point, we believe that when short-term funds enter TRB, the probability of the token rising is relatively high.
In the next two days, TRBs contract trading volume and open interest increased significantly. Its contract volume was $1.6 billion in the last 24 hours, with open interest around $68 million.
The chart below shows the changes in the major indicators of the TRB contract as of August 28. It can be seen that the open interest continued to grow until the early morning of August 28. When the pin hit $16, there was a large short order liquidation, accompanied by a decrease in open interest. Subsequently, the position changed from a growth trend to a downward trend, and the price also fluctuated downwards. The change in the funding rate occurred after the pin was inserted at $16 and reached the largest negative premium when it shot higher again.
At present, the positions of large investors are still in the long position. The ratio of long and short positions is 0.3452, indicating that a large number of retail investors participate in short selling. Funding rates are still at a negative premium, but have returned to more normal levels.
2. Fundamental situation
Understand the fundamental information of the project, confirm the current status of the project, and whether there are any obvious benefits or risks.
Tellor Tributes is a project launched in 2019. It is a decentralized oracle protocol that encourages open, permissionless data reporting and data verification networks to ensure that data can be provided by anyone and checked by everyone.
Tellor uses the mining mechanism to implement the Oracle system and implement a decentralized off-chain data query mechanism. The entire system consists of a network of data providers (miners), and through the Tributes (TRB) token incentive system, miners competitively add data points to the on-chain database.
TRB adopts a token issuance model that combines POS and POW, with no fixed token supply. Nodes pledge TRB tokens and complete the POW puzzle challenge. The first 5 nodes to submit data can receive TRB token rewards. Starting from the ETH block height of 9619370, each block decreases by 0.003%, and the output remains unchanged until the block token reward is 1 TRB. At this time, 5.5 tokens are sent out in each block, and the inflation rate is 17%. The 2021 year has entered the 1 TRB award phase.
Calculated based on the current circulation and an annual inflation rate of 17%, the annual new tokens will be 420,000 and the monthly new tokens will be 35,000.
The community is still maintaining relatively active development and community interaction. The Github main file was updated 3 days ago, and the update frequency is relatively high. The number of followers on Twitter is 32.5K, and there are 1488 posts. Basically, there are tweets on weekdays, and the activity is relatively high. The number of youtube followers is 1.28k, 229 videos, publish weekly development meeting, the latest release is the meeting content of the previous week. The number of followers on Discord is 4.7 K. The number of comments in the discussion area in a single day is more than a few dozen, and the number of comments is a few. The activity is average. Blog post last updated on August 9, 2023.
Business development is average. According to the official website, the currently deployed public chains or second layers are shown in the figure below, including op/arb/base and other newly popular L2s.
The project party has not yet disclosed the following specific information: the number and distribution of nodes participating in the network and providing data reporting services; DAPPs that actually use the oracle; the total amount of data provided by the oracle; the income from service fees, etc.
Overall, Tellor Tributes is in the stage of maintaining operations, with no major breakthroughs and progress in technology and business, and the projects competitive advantages are insufficient.
3. Summary
Tellor Tributes (TRB) short-term price increases are primarily driven by funding. After rising in the early morning of August 28, open interest fell and the price also fell significantly.
When looking for trading opportunities in the current market, you can focus on the following points:
1. Whether the price range of the token (for which Binance has launched a contract) is at the bottom of a period of time.
2. The degree of concentration of token chip distribution and in whose hands it is concentrated.
3. Whether there have been any abnormal activities on the chain recently.
4. Whether the token contract trading volume and open interest have increased significantly and maintained for a period of time.
5. What is the long-short ratio of large accounts and the long-short ratio of the number of people holding positions?
6. If the position continues to grow and then falls back with the price, it may form a short-term price top.
