November 23, 2020

The TIE Weekly Insights (Nov 23)

Some highlights from this week:

Market Overview

The total cryptocurrency market cap currently sits at $549B and has increased by 14% this week. BTC market cap has reached a new all time high of $341B, and market cap dominance is currently at 63.4%. The market was extremely bullish this week, as we saw positive double digit returns for all of the top 10 major coins. XRP had the highest returns at +64.4%. BTC had its second best weekly performance this year at +15%. Long term sentiment remains high for the majority with XRP leading, while LTC and XTZ are neutral. Trade volumes and tweet volumes were up across the board, with some even reaching positive triple digit increases.

Market Overview

Weekly Performance of Major Cryptocurrencies

The majors moved in a correlated fashion over the past 7 days. Price started increasing on Monday and Tuesday before eventually pulling back on Wednesday. The market picked up in the second half of the week and finished strong, with the median cryptocurrency returning a positive +20.7%.

Weekly Performance of Major Cryptocurrencies

Weekly Performance of DeFi Tokens

The median DeFi token increased by 12% this week, with BNT leading the pack at 49%.

DeFi Performance

Bitcoin Returns on Thanksgiving

With Thanksgiving coming up on Thursday (the last Thursday of November), it may be worth looking at Bitcoin’s performance surrounding this date. Naturally, holidays and Thanksgiving are a great time to preach Bitcoin to all of your family members. . So with enough people discussing Bitcoin, in theory, could there be some kind of price effect that takes place on or around these holidays? Below you can see a table of returns for Thanksgiving day, the next day, and the following 3 day returns.

Bitcoin Performance on Thanksgiving

We must keep in mind that this is a very small data set with a limited number of days to work with, but at first glance it's interesting. The day after Thanksgiving has a median return of 2.08%, with 90% of these days performing positively.

Bitcoin Closes at 2nd Highest Weekly Closing Price in its History

In our last Weekly Insights we talked about a BTC signal that consisted of 6 consecutive up/green weeks in a row. Historically the signal produced a median next week return of 15.3%. Last week's return was 15.4%, right in line with the returns we have historically seen. If the price action continues to play out similarly to past data, we still have upside left to come, as the median 6 week return following the signal is 30.95%.

Bitcoin traded within a $3,100 range this week, its second biggest weekly range in ($ terms) this year only behind the March sell off. The price of BTC stayed above its Volume Weighted Average Price (VWAP) nearly the entire 7 days. Investor Sentiment also remained positive from Tuesday on.

BTC also closed the week at its second highest weekly close ever in its history and its 7th consecutive up week in a row.

Bitcoin this week

Weekly Volatility in Dollar Terms

Bitcoin’s market capitalization has reached a new all time high of $341B, increasing by 161% in 2020. This is higher than its value back in 2017 when the price of BTC hit ATH. 

BTC Market Capitalization

The 30 day average number of Twitter users talking about Bitcoin has set a new 2 year high of 18,492. This number has increased by 68% since the beginning of 2020.

The number of Twitter users talking about Bitcoin

The percentage of tweets about Bitcoin that are coming from unique Twitter accounts has reached its highest percentage ever at 51.4%. This chart shows that not only are there more tweets about Bitcoin, but they are increasingly coming from more unique Twitter users.

Percentage of tweets coming from unique accounts

Mainstream Media is Talking About Bitcoin

Mentions of Bitcoin in mainstream media have reached a new 12 month high and have risen sharply over the last 2 months. The chart below shows the number of news stories mentioning Bitcoin among mainstream media publications over time as a relative metric scaled 0-100.

Media Mentions of Bitcoin

XRP Price Surges to New Yearly Highs

XRP was the best performing major cryptocurrency this week, returning +64%. The price has also surged to a new yearly high of $0.47. With this rise in prices, the number of Twitter conversations about XRP have grown as well, with an increase of over 320%.

XRP’s rise comes on the back of Brad Garlinghouse, Ripple’s CEO, mentioning the company’s 2020 success and that central banks are reviewing the XRP ledger as an open source technology for issuing stablecoins.

Additionally, the number of XRP holders has increased significantly, with the number of addresses holding from 100,000 to 1 million XRP tokens has hit a new all time high.

XRP Tweets vs Price

This has caused XRP tweet dominance to surpass ETH for the first time in 2020. Tweet dominance is the percentage of overall cryptocurrency related tweets that an individual coin accounts for on a given day.

XRP vs ETH Tweet Dominance

Investor sentiment on XRP, indicated by The TIE’s long term sentiment score, has reached a new all time high. It has increased at a rapid rate in the past 14 days, from 61 to 74.

XRP long term sentiment score

Long Term Sentiment of Major Cryptocurrencies

XRP currently has the highest long term sentiment score of the majors. This is the first time that XRP has had a higher score than BTC and ETH since April of this year.

Long term sentiment score is a measure of how positive or negative conversations on Twitter have been about a particular coin over the last 50 days vs. the previous 200 days. A score above 50 implies that conversations have been more positive during the past 50 days vs. the previous 200. A score below 50 implies that conversations are becoming more negative.

Long term sentiment

Ethereum, Bitcoin, and XRP have seen the biggest changes in this long term sentiment score so far in 2020.

Long term sentiment score changes this year

While Google searches are still low relative to the peak in 2017 for most of these cryptocurrencies, things seem to be picking up. Relative searches have increased noticeably in the past month, looking like the beginning of an uptrend.

Google Trends

With Google Trend data, the numbers represent search interest relative to the highest point on the chart for the given region and time. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular. A score of 0 means there was not enough data for this term.

Notable News

Circle Partners with Bloivarian Republic of Venezuela and Airtm to Deliver Aid to Venezuelans Using USDC

Wyoming's Incoming Senator Wants to Explain Bitcoin to Congress

Ripple CEO: Central Banks Review the XRP Ledger for Issuing Stablecoins

This Week's Podcast Episodes

Ep. 28 - Research Driven Crypto Investing with Thomas Klocanas (White Star Capital)
In our twenty-eighth episode Thomas Klocanas (Principal at White Star Capital) discusses research-driven crypto investing, digital collectibles, and evaluating early stage token deals. Listen here

Ep. 29 - Attracting Institutions with Chris Thomas (Swissquote Bank)
In our twenty-ninth episode Chris Thomas (Head of Digital Assets at Swissquote Bank) discusses custody, interest-bearing products, and attracting institutional capital to the cryptocurrency space. Listen here