Traders may have missed these unusual spikes in WBTC, WETH
With the larger crypto market facing the erratic bitcoin price movements, Wrapped Bitcoin (WBTC) and Wrapped Ethereum (WETH) are no better.
However, while both reflect more or less the same price action as Bitcoin and ETH, some of their indicators point with unusual spikes of investor action and notable patterns in this carnage.
New address models
A rather unusual spike in the WETH New Address Charts was recorded on July 18, with the total number of new addresses rising to an incredible 3,596. This is almost double the previous high on May 1, 2021. While there are many reasons, the drop in gas prices stands out and may be the biggest contributor to it.
In fact, the following graphic clearly shows the relationship between low gas prices and new WETH address gains.
Number of new addresses of WBTC (blue), WETH (pink), ETH (green) | Source: Glass knot
Additionally, the number of new WBTC addresses has decreased since June 15, testing the October 2020 level at the time of going to press. While the total number of addresses doesn’t necessarily indicate an upward or downward trend, they do indicate a potentially increasing liquidity in the DeFi space.
One Contributions Consensys recently pointed out that an increase in the number of decentralized exchanges (DEXs) and their trading volume is due to WETH, making it easier to swap ETH for other ERC-20 tokens.
Maker DAO events: job Liquidation, loan new debts and debt settlement
The increase in the number of new WETH addresses could also be due to the debt being paid back to DAOs. A recent report by Santiment highlighted that ETH’s recent halving saw a sharp surge in debt repayments (backed by WETH) as participants worried about liquidating their assets.
Monitoring general market sentiment using this metric also shows that this is a sign of falling confidence. Pay attention to the point where the payback occurs on the chart, it usually marks the bottom of a bull run.
WETH price (green) and HDAILY REFUND Multiple mortgage (pink) | Source: Sanbase
In addition, a report Another recently highlighted that no new debt was created, showing that traders do not have the confidence to coin new DAI. In terms of liquidations, the sharp rise shows how dire the situation is, and a look at historical liquidations revealed a “tendency to define a bottom”. Which means we could see the price recover.
WETH price (green) and DAO liquidation amount (red) | Source: Sanbase
On the other hand, an increase in new loans signals the possibility of further price declines. The long period of six months shows that more debt will push prices down again, and certainly more to come.
WETH price (green) and generated DAI quantity (blue) | Source: Sanbase
What about WBTC?
Compared to WETH, WBTC has fewer new addresses. However, a look at the 1-day chart shows that the number of active WBTC addresses has reached a current monthly high. In addition, the token’s social dominance also peaked, last seen in January of this year. This shows an increased interest in WBTC.
However, the rise in social dominance did not last long and collapsed shortly afterwards.
Social domination rate (purple) and 24h active addresses (orange) | Source: Sanbase
According to AMBCrypto