BTC, ETH, MATIC, ETC- analyzing “good, bad” signs of the crypto market

by Arthur · July 19, 2022

After the prices of several cryptoassets plunged into deep depths in the first six months of 2022, July has so far ushered in gains for many digital assets.

From July 18, the king of coins was, Bitcoin [BTC]breached the $22,500 level and touched a peak of $22,800 during the intraday trading session. Ethereum [ETH] also traded above the $1,600 region, a position it last reached on June 12.

In his recently published July mid-month report, Santiment, a research firm found that many cryptoassets have posted gains over the past 30 days. According to the report, crypto assets such as Polygon (MATIC), Quant (QNT), Curve (CRV) and Arweave (AR) have doubled their market capitalization in the last 30 days.

Furthermore, the report highlighted “the good signs and the bad signs” as cryptocurrency prices remain volatile. Let’s take a look at these signs.

A decrease in ETH fees

According to the report, fees for processing transactions on the Ethereum chain fell in the thick of the bear market to the lowest levels it recorded in December 2020.

With the price of ETH falling almost 80% from its over time, “less utility, declining address activity, and minimal, speculative fever across DeFi and NFT protocols” led to the drop in ETH transaction fees.

While noting that this qualifies as one of the positives of the bear run so far this year, Santiment pointed out that with the rising price of the Ether coin, a slight increase in the cost of each transaction should be expected.

Source: Sentiment

MakerDAO is unwilling to take on new debt

Another “good thing” about the bear market, according to Santiment, was that as a result of fears of potential liquidation, MakerDAO debt levels have consistently fallen during the bear run.

This has been due to the risk associated with large debt levels.

Source: Sentiment

While the prices of some altcoins rose significantly during the bear run, Santiment stated that the lack of a corresponding growth in the market capitalization of these coins was a bad sign as it represented inorganic growth. According to Santiment,

“Among the assets that have really seen big gains this week include ETC, KSM and AR, which are widely considered to not correlate that much with overall market success when they lead the pack.”

Source: Sentiment

Another “bad sign”, according to the report, was the position of BTC’s 30-day MVRV.

Santiment stated that BTCs The 30-day MVRV jumped over 9.5% at the time of the report. This rally represented the highest value of medium-term trading returns since the end of March, when the price per BTC was above $45,000.

While the current position of the coin’s 30-day MVRV was far from the danger zone of +15%, Santiment stated that “there is still an increased risk of being invested in an asset that is above its resting average of 0%.”