Market Overview
This month the Bitcoin market experienced its biggest deleveraging event since the March 2020 crash, with prices falling more than 47% from a weekly high of $59,463 to a low of $31,327. This monthly fall was the largest total price drop in history with a whopping $28,136 drop.
Driving the dramatic price swings were a series of tweets from Elon Musk about Bitcoin’s energy consumption, Tether’s printing of an additional 11 billion USDT, and Chinese regulation, amongst others.
This retracement caused more on-chain losses than even the big drops at the end of the last bull market in November 2018, January-February 2018 and even the March 2020 crash as the world started to grasp the full scale of the pandemic. On May 19th 2021 It hit an all-time high of $4.53 billion in losses. This is more than 300% higher than the previous peaks in March 2020 and February/April 2021. Total realized losses peaked at $14.2 billion per week.
The Bull-Bear Debate
Bitcoin’s price was only slightly below its current price five months ago, and long-term holders are selling to a relatively stable baseline after taking profits from the early 2020 rally from $10,000 to $42,000. Long-term holders’ selling patterns have not been affected by this sell-off, and long-term holders are buying lower, and accumulating cheaper bitcoins. While the number of non-zero addresses has declined in this correction, the number of addresses that are hoarding bitcoin has increased by 1.1% from the recent lows.
On the other hand, new investors entering the market have sold more than five times more Bitcoin during this panic sell-off, with the largest sell-offs occurring near the current local lows in the market. As a result of previously buying bitcoin at the highs, new entrant investors have realized huge losses.
There is no doubt that a battle between bulls and bears best describes the current market structure. A clear trend is forming between long term and short term investors. It is a battle over the beliefs of long term holders and the immediate buying power needs of new entrants.
Fork Hidden Danger Explodes
This year BSC has emerged. As a fork of Ethereum it’s attracted a large number of projects, and on-chain players with the lure of efficient transaction processing and low fees. At its peak, its total on-chain locked position value exceeded $34.4 billion, making it the second largest blockchain for DeFi applications after Ethereum.
The rapid rise of the BSC ecosystem has seen a large number of projects pile up and deploy in order to capture the on-chain first-mover advantage. Many developers have adopted the open source code of mature projects such as Uniswap and Curve, and then quickly put them on BSC with minor modifications before gaining a deeper understanding of the original projects. This hasty behavior introduced new risks to the projects and became a primary target of hackers.
In May, 12 projects were hacked, costing more than $250 million. As a result of the hacking incidents, BSC has had some of its locked-in funds flow back to Ethereum. This brought the total locked-in volume back down to $2 billion.
TitanSwap Delivery
First of all, a warm welcome to all the newcomers to the Titan community. We’ve grown exponentially in May with over 7000 new users on Telegram and over 5000 new followers on Twitter.
During this month we’ve discussed a lot of things about Layer2 and looked at projects like Optimism, Synthetix, Idex, zkSync and others. We’ve made the decision it was time to migrate TitanSwap to Layer2, and have submitted a request to deploy on Arbitrum. We will complete the migration as soon as it’s approved.
Regarding the deployment of Titan on BSC, as you know, Titan is an aggregator exchange and we were planning to partner with some of the project owners on BSC and start mining while deploying to BSC. As a result of the many hacks in May on some of our favourite projects we have decided to put this on hold until the storm passes. As soon as we are confident it’s safe to do so, Titanswap will deploy on Binance Smart Chain.
