BitMEX Research

BitMEX Research has been a quality source for all topics regarding blockchain and cryptocurrencies, with the new one going into detail on how ICOs stand financially with Ethereum’s sharp fall from the top. The analysis has been made with the help of TokenAnalyst, a Cryptoasset intelligence website.

The research follows the fundraising of 222 major projects and followed their outgoing ETH transactions and relevant ETH/USD market prices. To be able to give a conclusion an assumption had to be made, namely that ICOs will mostly transfer ETH when they are planning to sell them. Additionally some numbers were rough estimates and a lot of ICOs may have been missed through the analyses period.

The most interesting numbers feature EOS, which in itself raised just as much Ethereum as every other ICO monitored during the period. EOS reaised ~7.2 million ETH ($3.8 billion at the time) with every other ICO raising ~7.9 million ETH ($1.6 billion at the time). EOS has sold most of its ETH stash, while the rest of the ICOs had a remaining ~3.9 million ETH ($830 million) to sell.

The paper also concluded that compared to the original ETH price during fundraisers, most projects sold ETH at a profit, netting altogether $727 million in realized gains and another $93 million in unrealized gains. These numbers conclude that many ICOs must have already sold most of their stash when Ethereum was higher in price.

ICO balances vs ETH price from BitMEX Research

Of course the paper can’t account for the reinvestment of ICO funds into other projects, which could delay the inevitable outcome of the market sell of funds.

The point of the research was to try and argue against or for the ‘death spiral’ theory behind the ICO sell-offs. The argument was basically revolving around an ever faster ETH sell-off occurring between ICOs as they try and lock-in profits before other projects dump their holdings first. Even if this theory is valid, the critical point should already be over considering most of the original funding amounts in USD have been locked in during the cyclical movements (uptrend later followed by the downtrend in price). As these are mostly estimates there could still be some projects that are in a huge loss, while some projects locked in high profits.

Our Charts

Our charts indicate a similar conclusion. Even though ETH ICOs might have been racing against each other, we have several reasons to believe that we arrived at the bottom prices, so we checked out Ethereum.

The ETH/BTC chart shows us that the price has broken out from a multi-month downtrend right after bouncing from the top of the last historical bottom’s range. The overall average rising volumes also indicate a bullish momentum coupled with a growing MACD indicator, a bullish cross here could mean we break the first major resistance that has held on the previous break-out attempt. These all show us a that the bottom could be in or that there is a huge suppoert at the current bottom at least.

Breaking above the first resistance could show the beginning of a new trend, while getting rejected again could mean that we will re-test the support again before continuing in either direction.

Our ETH/USD charts show a similar conclusion with the price breaking out from the multi-month falling trend and bouncing from the historical bottom’s range coupled with rising volumes.

Conclusion

Our conclusion is that the sell-off from investors and ICOs alike might have slowed down and finally resulted in a bottom for Ethereum. No one knows for sure if this will be the final bottom or if it will be just another checkpoint like back in May, when the price rebounded from around 360 USD to 830 USD, but the volumes are definitely showing something positive.