In this week's Glassnode Clips, we take a closer look at the Bitcoin options market, providing insights into last week's flash crash:

- Implied volatility was historically low before the crash, leaving the market unprepared for sudden price movements.
- Despite the chaos, options open interest remained stable, showing no mass panic and minimal forced deleveraging. This contrasts sharply with the $2.5B mass deleveraging observed in the futures market.
- The options market wasn't the primary catalyst for the sell-off, but it did adjust quickly, with volatility and delta skew rising significantly.

Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=9gqEuv96H2k

With hindsight and lessons learned from FTX, the monitoring of exchange related risks is a critical component of digital asset risk management.

In our latest report, we develop three indicators which help highlight periods of heightened counter party risk. We analyse the top four assets BTC, ETH, USDC and USDT, across four case study exchanges; Binance, Coinbase, Huobi and FTX.

Read more in The Week On-chain

The latest Week On-Chain Video is live! This session focuses on assessing risk in centralized crypto exchanges:

- Exchanges remain the centrepiece of the digital asset industry, where the vast majority of trade takes place.
- Our assessment, based on entity-adjusted data, indicates that 54% of the economical on-chain volume for Bitcoin is related to either exchange deposits or withdrawals.
- Drawing insights from the lessons of the FTX collapse, we introduce three metrics to pinpoint unusual exchange activity: the Reshuffling Ratio, the Reliance Ratio, and the Whale Withdrawal Ratio."
- Using this exchange risk framework, we assess Binance, Coinbase, Huobi and FTX to provide an overview of various exchange on-chain behaviors.

Find out more in the latest Week On-Chain 👇
https://www.youtube.com/watch?v=B2aWvbiwOTo

In this week's Glassnode Clips, we focus on evaluating risk in centralized cryptocurrency exchanges:
- The Measure of Liquidity Reliance ratio aims to gauge an exchange's level of dependency by looking at 30-day flows to/from another exchange relative to its balance.
- A higher Exchange Reliance Ratio may suggest increased counterparty risk, a consideration that could be especially relevant for smaller exchanges.
- Sudden shifts in the ratio might act as early warning signs, as likely indicated by Alameda's influence on FTX's outflows in June 2022.
Discover more in the latest Glassnode Clips below 👇
https://youtu.be/Z62l6dtB5rQ

🚀 Glassnode's Chart of the Week is here! Dive into the aftermath of the Grayscale legal victory against the SEC and discover the Realized Loss Momentum tool to spot market inflection points. Why has the market given up all its gains? Should investors brace for more downside? Equip yourself with the latest on-chain insights and stay ahead of the curve.
https://www.youtube.com/watch?v=8LiMcMcEMR0

The latest edition of The Week On-chain newsletter is live.

We introduce and establish a set of tools we can use to assess sentiment and market positioning in Uniswap Liquidity Pools.

Executive Summary
- Event driven volatility has re-entered digital assets markets in recent weeks, with notable indicators of aggregate capital outflows flagged leading into it.
- Derivative markets show a continual outflow of liquidity, particularly across ETH futures suggesting capital continues to move higher up the risk curve to relative safety.
- We deep dive into how Uniswap liquidity pools have many similarities to options markets, with Liquidity Providers expressing a view on both volatility, and price levels.

Read more in the latest edition of The Week On-chain newsletter.

Capital tends to flow into the digital asset market primarily via three assets; #Bitcoin, #Ethereum, and #Stablecoins. With stablecoins proliferating in recent years, and becoming a dominant quote pair, we can use the relative flow of funds between these assets to gauge aggregate market demand.

In our latest video report, we cover the shifting tides of capital flows:
- Review the Recovering from a Bitcoin Bear dashboard.
- Use aggregate capital flow metrics to assess macro demand.
- Assess the relative balance between stablecoins and the majors.
- Shifting dominance that helps establish a view over the risk curve.

Visit our Capital Rotation dashboard for a full set of charts covered in this weeks video report.

In this week's Glassnode Clips, we focus on BTC vs ETH Exchange Flow Dominance:

- This metric gauges the proportion of USD funds flowing in and out of exchanges attributed to Bitcoin and Ethereum. A higher value signals Bitcoin dominance, while a lower value suggests Ethereum dominance.
- Throughout 2023, Bitcoin's dominance has noticeably increased, moving from around 50% to between 65-75%. This rise in BTC exchange flow dominance indicates capital moving down the risk curve, suggesting a weakening of risk appetite.
- Despite the increase in Bitcoin's dominance, net capital outflows persist across the digital asset space, highlighting that caution remains the dominant sentiment.

Discover more in the latest Glassnode Clips below 👇
https://www.youtube.com/watch?v=o_Htt6cKYIY

Chart of the Week is Live! This week, we're focusing on the Spent Output Profit Ratio (SOPR). Grasp the practical implications of SOPR for your trading and investment decisions. Dive deep into this metric and stay ahead in the current uncertain environment.
https://www.youtube.com/watch?v=KEPRMS-ifBY

Glassnode Co-Founder Rafael Schultze-Kraft is going to be on a panel at token2049 tomorrow to discuss how to best navigate blockchain and web3 data. If you're attending, make sure to check it out and connect with us at our booth on level 5!

Liquidity across the digital asset market continues to dry up, with both on-chain and off-chain volumes reaching historical lows. Whilst HODLing remains the market preference, a significant proportion of the supply is teetering on the edge of falling into a significant unrealized loss.

Executive Summary
- Liquidity, volatility, and volumes continue to compress across the digital asset market, with many metrics falling back to 2020 pre-bull levels.

- Stablecoins are experiencing a persistent decline in supply as redemptions are made across all major stablecoin assets with the exception of Tether (USDT).

- The Long-Term Holder cohort are steadfast in their holdings, spending remarkably little of it.

- Short-Term holders on the other hand are teetering on the edge of profitability, with a large majority of their supply acquired above the current price range.

Read more in The Week On-chain Newsletter and our latest Video Report.

🔍 Finance Bridge by Glassnode is our go-to resource for traditional finance entities looking to integrate on-chain insights into their trading and investments. In the September edition, we delve into Bitcoin's momentum shifts as seen through on-chain profitability metrics, explore how macroeconomic dynamics impact the crypto markets, and explain how to use the Realized Cap to inform you trading and investment strategies. Discover all these insights here: https://insights.glassnode.com/finance-bridge-edition-4/