Bitcoin pulled back ~19% from its peak on 1/9, and is down slightly from a week ago but up over 75% from a month ago. Meanwhile, Difficulty reset to an all-time high of 20.6T as expected (+10.8%), taking the target Hashrate to 147EH/s. Total BTC earnings per PH/s are now ~7.18mBTC / PH/s, down from 7.55mBTC last week. (1mBTC or milliBTC = 1/1000 BTC.)

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Market volatility drove Transaction Fees (Tx fees) up 460bps week-on-week (WoW) to 15% of miner rewards. Large on-chain volumes have driven the Mempool to 76,000 Tx awaiting confirmation, equivalent to 130 blocks or almost 22-hour confirmation times. …

BTC finally experienced a significant correction.

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The market is still in the overbought territory and away from the sharply rising trendlines. Price would have to break the rising trendline that is now in the 21,000–22,000 region to break the bull market. This leaves a lot of room for difference of opinions and “fear and greed” bouts which resulted in heightened volatility. Our suspicion is we are still in the bull market, but the craziness of the last 4 weeks should moderate.

The 15-day realized vol is up to 137.5% from 105% on the massive selloff over the weekend. The traders are taking a breather though and are starting to look toward normalization of movement, with March IV decreasing and January staying…

One thing we learned this year is that BTC does not take a break for the holidays! Prices have doubled in the 23 days since our last report.

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The rising wedge that allowed us to call for imminent new all-time highs has been broken to the upside and the trend has gone hyper-exponential. Such a rapid ascend is intrinsically unstable. We do not know however, the point from which it retraces its progress.

The 15-day realized vol is up from 59% to 105%. The traders are projecting the chaos to continue with IVs outpacing the progress of realized movement:

What an end to the year on the regulatory front! A frantic pace of activity on multiple fronts created an exciting end of 2020 for those of us who closely follow digital asset regulation. While we believe much of the action indicates the continuation of the trend we have previously written about — namely, the acceleration of regulatory activism by U.S. agencies — we also assess some of these policy statements, issuances and reports also reflect the upcoming administration transition and efforts by the incumbents to complete ongoing efforts.

Here is a roundup of the major regulatory highlights from the past few…

Happy New Year from BitOoda! What a holiday season it has been! Bitcoin peaked at over $34,0000, doubling in the past 5 weeks before giving back some of the gains today. BTC closed yesterday at $33,278, a 26% gain from the prior week. Meanwhile, Hashrate expanded just 6.4%, although the target Hashrate is on track for a 10% or higher reset on January 9th. Total BTC earnings per PH/s are now ~7.14mBTC / PH/s, down slightly from 7.21mBTC last week. (1mBTC or milliBTC = 1/1000 BTC.)

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Transaction Fees (Tx fees) dipped 91bps week-on-week (WoW) to 7.9% of miner rewards, which makes sense since the number of blocks mined daily increased 6.8% WoW to 158. Since the halving on May 12, the correlation between daily blocks mined and Tx fees as a % of total mining rewards has been negative 69%, strongly supporting the view that rising network congestion, largely driven by falling aggregate block space when block count falls, is a strong predictor of rising Tx fees. …

Bitcoin’s price gained 23% last week to $23,529 from $19,156 the previous week, while network Hashrate dipped 5.5% to 140EH/s. The next Difficulty reset, expected on December 27, is currently on track for a modest increase. Total BTC earnings per PH/s are now ~7.27mBTC / PH/s, up slightly from 7.01mBTC last week. (1mBTC or milliBTC = 1/1000 BTC.)

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Transaction Fees (Tx fees) climbed 343bps week-on-week (WoW) to 7.2% of miner rewards. Since the halving on May 12, the correlation between daily blocks mined and Tx fees as a % of total mining rewards has been negative 69%, strongly supporting the view that rising network congestion, largely driven by falling aggregate block space when block count falls, is a strong predictor of rising Tx fees. …

We at BitOoda were thrilled to see yesterday’s announcement by CME that the regulated exchange will list an Ethereum futures product next year. This is a huge step forward for the entire digital asset ecosystem and represents yet another indication of the migration of market activity toward regulated and registered platforms and players. The introduction of the financially-settled contract (50 ETH per contract, pricing based on the CME’s regulated reference rate) follows the explosion of interest this year in the platform’s Bitcoin futures and options and new all-time price highs for BTC.

· With the acceleration of regulatory enforcement against unregulated platforms (such as BitMEX), the expansion of the regulated derivatives market in the U.S. signals the continued advancement and maturation of the U.S. market landscape. CME ETH futures will enable BitOoda to offer a broader array of opportunities for our clients to gain exposure to digital assets in a risk-managed approach that will allow us to structure even more sophisticated strategies. …

BTC is unchanged week over week and up about $1000 since our last commentary. The recent uptrend got tested and held again.

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We continue to maintain a bullish bias until the uptrend is broken decisively. This means we are close to retesting and possibly breaking the all-time highs yet again.
The weekly range is under $2000 and is unimpressive by recent standards. Thus, the 15-day realized volatility is down to 59% from 77%, putting pressure on December option prices.

Bitcoin’s price consolidated last week, dipping 1% to $19,156, while network Hashrate climbed 14.5% to 148.3EH/s. Difficulty reset down 2.6% to 18.67T, resulting in a target Hashrate of 133.5EH/s. Total BTC earnings per PH/s are now ~7.01mBTC / PH/s, up slightly from 6.92mBTC last week. (1mBTC or milliBTC = 1/1000 BTC.)

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Transaction Fees (Tx fees) fell 136bps week-on-week (WoW) to 3.8% of miner rewards. Since the halving on 5/12/2020, the correlation between daily blocks mined and Tx fees as a % of total mining rewards has been -69%, strongly supporting the view that rising network congestion, largely driven by falling aggregate block space when block count falls, is a strong predictor of rising Tx fees. …

One step forward, two steps back — the familiar pattern of the U.S. digital asset regulatory journey continues.

The SEC this week escalated the organizational position of its Strategic Hub for Innovation and Financial Technology (FinHub) and last month issued a no-action letter (only its third such letter to date) to the developers of Ethereum-based token VCOIN — positive indications of the Commission’s intent to prioritize and continue to bring clarity to the digital asset space.

· We agree with the views of other regulatory followers that making FinHub a standalone SEC office reporting directly to the Chair reflects the agency’s belief in the significance of digital assets to the evolution of the country’s financial regulatory system. …

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