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Over the past weekend, and in spite of the light trading volume caused by the fact that most Asian markets are heading into a week-long Lunar New Year holiday season, BTC experienced a 2.5% downside correction. In a similar vein, ETH is also down 2.5% from 24 hours ago, and is currently stabilizing just above the $2,500 level (as of the time of writing). Most major altcoins have also flipped red, and are, on average, down 3-5% over the same time period. With that being said, however, on-chain metrics do still suggest that BTC remains in the oversold territory. The Network Value to Transaction (NVT) ratio, an estimation of market value based on on-chain volumes, projects that BTC is currently lying in-between the 28-day and 90-day "fair value" zones. The 90-day NVT premium, however, is trapped within the zone of historical macro undervaluation, and suggests that a relief rally may very well be on the cards in the near-term. This, when viewed in tandem with the fact that an increasing percentage of circulating BTC supply has been turning illiquid in recent times, bodes well for the number one cryptocurrency by market cap indeed. On an even brighter note, the monthly NFT trading volume has also reached a record high of $6.13 billion, as new marketplaces like LooksRare seem to be rising to the occasion to challenge OpenSea’s dominance.
BTC's funding rates are continuing to head southward as the perpetual contract trading volume across major exchanges has hit yearly lows. The prolonged periods of brutal long liquidations seem to have come to a temporary halt as the futures liquidation dominance has crossed over to the "shorts" territory. This is not, by any means, a definitive end of the bearish sentiments plaguing the crypto market, but it does signal the potential for a relief BTC rally in the near-term.
The Wonderland (TIME) drama doesn't seem to be wrapping up anytime soon. Over the weekend, Michael Patryn (Sifu), CFO of Frog Nation (a collective of multichain DeFi projects including Abracadabra and Wonderland), was voted out of the Wonderland management team, just two days after being outed as a serial financial criminal. Currently, a new poll is being held to decide if Wonderland will wind down or not, and can be viewed of as a battle between the whales (who are likely in this for the huge arbitrage opportunity) and the retail Frog Nation believers. In another twist to the story, however, Wonderland's founder Daniele Sestagalli came out on Sunday to openly declare that he is in favor of winding down the embattled DeFi 2.0 project, enraging many of his loyal supporters in the process. How this will play out in the end remains to be seen, and it will definitely be prudent to keep a keen eye on developments surrounding this story.