TVL can be a deceptive metric.
Good morning Banter fam,
Last Monday, we had to cover the market meltdown of the weekend before, so we skipped the routine of looking at total value locked (TVL) across chains. So instead, we’ll cover it in today’s newsletter.
While the total value locked (TVL) spectrum appears grim at first glance, most significant chains saw minimal outflow of native tokens from their respective chains.
At first glance, looking at TVL in US dollar terms, it appears tokens are leaving blockchains for exchanges but using native tokens’ value as the measuring stick notes value on the chain continues to increase.
We’ll use Ethereum as the first example of this major misconception.
Looking at the value locked on Ethereum (ETH), the analyst would assume a mass exodus. Wrong.
Source: DeFi Llama
In truth, TVL on the Ethereum blockchain has only ever been in an uptrend on the protocol (Below). So while the price of Ether is demanding a lower price on exchanges, TVL in ETH terms is actually at all-time highs.
The same holds true for major chains such as Solana (SOL), Binance (BNB), and Avalanche (AVAX). Avalanche TVL chart below. Most Layer 2 protocols are in a healthy uptrend too.
What can we derive from this information?
Bitcoin (BTC) is showing signs of life having reclaimed $20k. The dip below 20K likely resulted from the large amounts of liquidation surrounding 3AC. Moreover, the $20k level will be a highly contested area for buyers and sellers. The best-case scenario for BTC is to begin uptrending by creating higher lows. 4H chart below.
Typically, dominance drops when traders move BTC into altcoins, but Bitcoin dominance continues to plummet as traders exit the risk markets into stablecoins. BTC.D fell -8.27% in the previous eight days. Until dominance action returns to normal tendencies, don’t expect the market to follow typical BTC/ALTCOIN patterns.
“Bitcoin is dead.”
Alex Kruger noted that “Bitcoin is dead” on Google Trends has hit 91 on the five-year chart, the highest level since Feb 2018, when BTC fell to $8k from the $20k highs of Dec. The trend highlights the largely negative retail sentiment at the present moment.
Source: Google Trends
|US markets close||Gain|
|Protocol (Coin)||Price ($)||Gain (%)|
|Celsius Network (CEL)||0.93||+22|
|Cosmos Hub (ATOM)||12.38||+14|
|Bitcoin Fear and Greed Index||9 Extreme Fear|
|“Crypto” Google Trends 90d||28|
|“Bitcoin” Google Trends 90d||96|
Synthetic atomic swaps. One of the few altcoins outperforming the market is Synthetix (SNX) after gaining +116% in the last 48 hours. The protocol, which has seen over 100 million in daily volume, benefitted from the SIP-120 upgrade, which allows it to execute atomic swaps by comparing prices in Uniswap and Chainlink. Although, Celsius may be shorting the token. Enter SNX at your own risk.
Protocol level tidbits:
Is BAYC a racist project? Investigative journalist Phillion released a documentary on YouTube after 100s of hours of research that discovers an underlying racist, Nazi, and alt-right themes in the BAYC NFT project. Phillion began his investigation after visiting the website gordonegoner.com, which details the dark undertones of BAYC and has since started a #BURNBAYC campaign on Twitter.
The tide reveals the trash.
The bear market has spawned the next major crypto controversy, and if you ask me, the evidence behind BAYC’s accusation of racist themes is too overwhelming to ignore. Grim coincidence? Possibly. But be your own judge.
We’ll have to wait to see if anything comes of the story, but don’t expect the story to get swept under the rug, especially if any major news networks become aware of the controversy.
Unfortunately for the rest of us, the controversy could rightfully give the public more reason to hate crypto/NFTs. O well, nothing new.
Thanks for reading!
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