Markets entered their first all-positive week since September. Bitcoin and Ethereum are up by 3% and 9%, respectively, over the past week. Having March as a date for Ethereum’s Shanghai Upgrade, where staked ETH withdrawals are slated to begin, has boosted market sentiment, especially with protocols like Lido, which increased in returns by over a whopping 60%, as seen in Figure 1. Other outliers in last week’s rally include Optimism, which is up by nearly 32%, and Cardano, up by 25%.

Figure 1: Weekly TVL and Price Performance of Major Crypto Categories

Source: CoinGecko, DeFi Llama. data as of January 9 (close price).

Key takeaways

• Coinbase, Huobi and Genesis lay off at least 20% of staff, Wyre scales back and limits withdrawals.

• ETH core developers hoping to launch Shanghai testnet by February

• With $6.6 billion in assets, Lido Finance surpasses MakerDAO to become the largest DeFi app

• Solana NFT trading volume soars, despite adverse market conditions.

PSA: Attend our bi-weekly analyst call hosted by our research team, where they provide insights into current affairs. Our next session is on Jan 18, 2023, at 16:00 (GMT+1:00)

Spot and Derivatives Markets

Figure 2: Bitcoin Futures Open Interest Perpetual

Source: Glassnode

The current open interest perpetual futures, – is almost at levels equivalent to two years ago, right after a sharp dip before the peak of the 2021 bull market. Bitcoin was almost $40K on January 9, 2021 when the open interest was $6.3B, with the same level today, BTC trades at circa $17K. This trend may indicate that momentum behind the movement is slowing and the direction of prices could reverse.

On-chain Indicators

Figure 3: Total Value of Staked ETH

Source: Glassnode

The amount of ETH that has been deposited to the ETH2 deposit contract has increased by 2% month-over-month to total almost $16M. Later in this report, we delve deeper into what that means to many protocols in DeFi, namely those working on liquid staking solutions.

Next Week’s Calendar

Read our full report here

Research Newsletter

Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com

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