A summarizing review of what has been happening at the crypto markets of the past week. A look at trending sectors, liquidity, volatility, spreads and more. The weekly report in cooperation with market data provider Kaiko.
This week in the cryptomarkets:
- Bitcoin closed the month up 27.9%, reaching multi-year highs and solidifying its position as the year's best performing asset despite experiencing a slight pullback Monday morning.
- All 8 of the top ranked DeFi tokens by marketcap ended the month down double digits.
- Ethereum trading volume fell 45% in October while Bitcoin trading volumes rose 12%, indicating a decoupling in trading behavior between the two top-ranked assets.
- The bid-ask spread for BTC-USD trading pairs widened on all exchanges except for Bitfinex throughout October in response to rising volatility.
Bitcoin's record-breaking month
Bitcoin has solidified its place as the year's best performing asset after another superb month of returns. BTC pulled back temporarily on October 28 and October 30th as traditional markets experienced a sell-off, but the price quickly recovered to reach a multi-year high briefly above $14k over the weekend, up from a monthly low of $10,439.
DeFi markets lose their luster
Interest in decentralized finance waned throughout October as token prices continue to fall from highs reached early September at the peak of DeFi-mania. All of the 8 top-ranked DeFi tokens by marketcap ended the month down nearly double digits which stands in sharp contrast to Bitcoin's record-setting month of returns. Further bad news rocked the industry as Harvest.Finance, which had become one of the top DeFi protocols by value locked, suffered an exploit from an anonymous hacker resulting in the loss of millions in user funds.
Ethereum trading volume experiences steep October decline
Ethereum's summer bull run did not last into the fall as trading volumes tumbled across all top exchanges. We can observe that Ethereum volume was nearly equal to that of Bitcoin at the start of September, a trend that did not last into October, which saw the highest sustained levels of Bitcoin-Dollar volumes since early summer. Overall, BTC-USD trading volumes grew 12% in October while ETH-USD volumes declined 45%.
Bid-ask spreads widen throughout October
We charted both the 1-day moving average and monthly trend line for bid-ask spreads on top exchanges. All exchanges ended the month with higher average spreads except for Bitfinex. The widening spreads can be attributed to Bitcoin's price volatility which resulted in +28% monthly returns and a large increase in trading volume.