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The fundamentals and price trends on the chain indicate that Bitcoin is already in a longer-period ascending channel. However, Bitcoin’s rapid growth needs to be decoupled from the relevance of traditional financial markets.
Original title: “Glassnode 丨 The starting point of the cryptocurrency bull market is to decouple from the relevance of the traditional financial market? 》
Written by: Liesl Eichholz
Bitcoin saw a slight increase in the 42nd week, closing at $11,450, an increase of 0.8% from the initial $11,360. BTC reached a high of $11,660 on Monday night, then fell back and continued to show a slow downward trend at the end of the week.
In week 42, the fundamentals on the Bitcoin chain declined slightly. GNI fell back to 61 points, a drop of 2 points from last week. This decline was triggered by the decline in liquidity and network health index, but the sentiment index remained strong.
The Internet Health Index dropped by 2 points from last week and closed at 67 points in week 42. Although the network growth sub-category increased slightly, the network activity experienced a 6-point decline due to the decrease in active entities and on-chain transaction volume.
In terms of liquidity, the market closed at 51 points this week, down 5 points. This is due to a small decrease in the transaction liquidity sub-category, and the small decrease in the transaction liquidity sub-category is due to the decline in the number of transactions and transfers on the Bitcoin chain.
The sentiment index was the only sub-index that rose this week, closing at 70 points. The investor sentiment sub-category rose by 5 points. This phenomenon was due to the slight increase in the price of Bitcoin, which brought more profits and fewer investors who sold at a loss.
The guide has been in a bull market for 21 consecutive weeks-which means that it has been in this area for half of 2020.
The fundamentals and price movements on the Bitcoin bullish chain indicate that its continued support above $11,000 is stable. However, the correlation between BTC and the stock market trend is still very high, and appropriate attention should be paid to risks.
Decoupling from traditional financial markets is still a necessary condition for Bitcoin to experience another period of extremely rapid growth.
Relative to BTC performance
In the 42nd week, the performance of mainstream altcoins against Bitcoin was once again uneven. ETH and BTC were the same, BCH gained 3.5%, and BNB gained 6.3%.
DOT depreciated against BTC for the second consecutive week, with a drop of 4.4%, and maintained its position as the 8th highest cryptocurrency in market value.
Relative to USD performance
At the same time, the dollar value of most mainstream altcoins rose slightly this week, with BNB rising by 7.1%. The price of BTC also rose slightly by 0.8%.
The exchange rate of XRP against the U.S. dollar fell by 4.9% in a week, but started to rebound on Monday morning.
The launch of Filecoin-but mining incentives may be biased
On October 15, Filecoin launched its main network after more than 3 years of development. Its pre-sold FIL tokens began to cash out, and at the same time miners began to provide their storage services on the network.
Despite the technical success, it turns out that the Token economic model of the network hinders the development of mining. In order to provide storage services, FIL miners must purchase and stake FIL tokens; the more storage they hope to provide, the more FIL they need to stake.
However, the market price of FIL is ridiculously high compared to the return obtained by miners for providing storage services. Not only that, the release time of mining rewards is 180 days, which means that miners have to wait a long time before they are expected to provide services for profit.
In a tweet, Nico Deva outlined the issue in more detail:
In these “misplaced” token economic models, can miners achieve long-term profitability? If not, can the Filecoin network survive? How does this affect the price of tokens?