Cryptocurrencies In 2019 Seen Through Alternative Metrics

by Patrick Gon

Although much of the analysis of the cryptocurrency market is supported by the evolution of its price, its market value and the volumes traded, there are other less disclosed metrics that move a bit away from traditional analysis and prediction tools. .

In a study published on January 30, the company Santiment, which provides analytical platforms of the cryptocurrency market, presents, together with conventional financial variables, a view of the market during 2019 that takes into account, for example, the efforts of the teams development, the social presence of the main projects or their role in the news field .

At the beginning of the study, using the widely used investment return metric (ROI), Santiment states that when asked about whether 2019 was a good year, the obligatory answer is “it depends”. The research company refers to the already disclosed figures of bitcoin ROI and the cryptocurrency market as a whole, in 2019, which were respectively 56.7% and 92%, although it also indicates notoriously lower returns from other actors in the market.

Although at the present time it does not feel that way, the total capitalization of the cryptocurrency market grew a formidable 56.7% in 2019 and the main culprit of this is of course bitcoin, with 92% return, which continues to act as a direct indicator From the market. […] Not everyone in the top 20 cryptocurrencies had a good year, however. Despite a strong second quarter, Ethereum could not maintain and is currently oscillating just below the profitability threshold (-0.7%), while the prize of the losers is taken by XRP which is 47.7% for below its valuation of December 2018.

Santiment, Market Report in 2019.

Investing in BTC? Better a Saturday than a Friday

The report addresses other metrics, not as disclosed as those associated with major financial trends For example, Santiment evaluated the average daily performance of bitcoin on each day of the week.

In traditional investment, the fact that certain days of the week tend to be more profitable than others is a well-documented phenomenon. But which days proved to be the best for cryptotraders in 2019? A few months ago we created a template that allows you to calculate the average return of any cryptocurrency for each day of the week, in a given period. If we use bitcoin as a market indicator, we can appreciate that 2019 shows clear winners and losers in terms of daily returns.

Santiment, Market Report in 2019.

Average daily BTC performance in 2019

Tuesdays Thursdays and Saturdays were notoriously better than odd days, in terms of the average daily performance of BTC in 2019. Image: Santiment, Market Report in 2019.

“Bitcoin loves even days,” says Santiment. On Saturday it had the highest average daily performance for BTC last year, according to the report, with 1.02% , followed by Tuesday (0.63%) and Thursday (0.52%), while on odd days The performance is notoriously inferior. Friday, with -0.88%, was the day of the week with the worst average performance in 2019.

The graph for Ethereum is very similar to that of BTC, says Santiment, because in that case it also dominates on Saturday with a yield of 0.73%, with the difference that on Sunday it occupies the second place between the days of the week, in Average yield for ETH in 2019, with 0.62%. In the case of BTC, Sunday was the only odd day that resulted in a positive performance, but only 0.42% and lagging behind even days.

Social trends

In general, mentions of cryptocurrencies in selected social networks were lower in 2019 than in 2018, taking into account data collected by Santiment in selected media channels of the first 1,000 cryptocurrencies by market capitalization.

The following chart shows the total mentions of cryptocurrencies on Telegram, Reddit, Discord and chats of professional traders in contrast to the mentions of Ethereum between 2017 and 2019.

Mentions in selected professional social networks of the main cryptocurrencies and ETH / USD between 2017 and 2019. Image: Santiment, Market Report in 2019.

Compared to 2018, chat messages between developers and other cryptocurrency ecosystem professionals decreased in 2019, according to Santiment, with two exceptions where there was year-on-year growth: Discord and Twitter.

In correlation with their dominance position in the market, BTC and ETH occupied the first places in number of mentions in social networks, notes Santiment, who also offers figures of mentions in the social networks of the five projects that showed greater visibility increase in 2019, regarding their mentions during 2018. For this, projects with at least 10,000 messages were chosen.

These projects are: Bitcoin SV, BitTorrent, Dai and Maker, Chainlink and Gemini Dollar. The reasons for its greater prominence, according to the report, are varied, ranging from claims against bitcoiners by Craig Wright and the exclusion of BSV from Binance, to the great activity in the decentralized finance (DeFi) sector driven by Maker and Dai, along with other decentralized finance actors.

The following chart shows the percentage of increase in the volume of mentions from 2018 to 2019.

Image: Santiment, Market Report in 2019.

Santiment warns that the popularity of different projects is not always due to the growth of organic messages , that is, authentic discussion and feedback messages between the different actors in the ecosystem. There is also a volume generated by spam, says Santiment, even in channels frequented by developers.

Chainlink, Bitcoin and Ethereum are very popular targets among spammers , especially in the Bitcoin Talk and Reddit channels. Another culprit pointed out in these waves of spam is Dogecoin in Discord, as well as discussions about Ethereum Classic, BCH and XRP in the respective subreddits.

With an extensive section dedicated to the activities of the developers of the different projects, this Santiment report on the cryptocurrency market emphasizes that its objective is not to conclude if 2019 was a year of upward or downward trend, but to provide elements of analysis of different market dimensions , together with the trend of on-chain data and those related to the financial and social field to achieve a comprehensive overview of the cryptocurrency market.

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