The Bear Market

On June 2022, the largest token by market cap ($BTC) approached a price level not seen since 2020, while important companies in the sector registered potential insolvencies.

Concerns around a sharp monetary policy tightening were weighing on financial markets and filtering into crypto through its influence on large institutional investors.

The US Consumer Price Index (CPI) report for May showed that inflation in the world's largest economy reached 8.6% year-on-year, 0.3 percentage points higher than the expected level of 8.3 %.

The data led global markets lower earlier on June, as investors priced in interest rate hikes as the Federal Reserve (Fed) attempted to rein in prices. The drop in share prices came as traders expected companies to report lower income and consumer spending. Additionally, some observers estimated that the central bank's actions would further affect $BTC’s price.

Overview

This dashboard analyzes how Optimism was affected by the bear market back in June - July 2022. To dive deep into the subject and cover as many topics as possible, this dashboard is divided into five sections:

1. When was the market the most bearish?
2. Swap Activity
3. Transaction Level Data
4. Bridge Activity
5. NFT Space

Key Findings

• When was the market the most bearish?
  • The biggest market crash that signaled an incoming bear market, happened on June, when $BTC went from 30k USD to 20k USD in a matter of days, while $ETH decreased from 1.8k USD to 1k USD. However, $OP’s price started dropping a couple days earlier than $BTC and $ETH. Thus, this dashboard will use the following timespan to analyze what the bear market situation looked like on Optimism: June 13th to July 13th.
• Swap Activity
  • Despite Uniswap holding most of the trade volume and number of swappers on Optimism, Velodrome was the platform where most swaps took place.
  • The largest DEXs by TVL (Uniswap and Velodrome) did not go up in activity during the market. On the other hand, the DEX that did (Sushiswap), did not directly impact Optimism as its volume was too small.
  • The pool with the most activity and volume during the bear market was the WETH-USDC pool.
• Transaction Level Data
  • The number of transactions on Optimism decreased day after day as the bear market started.
  • However, this was due to the number of transactions/user decreasing, as the total transactions actually increased until it reached a peak on June 27th.
  • The total volume transacted was very volatile, where not a clear trend was developed. Nevertheless, the volume per transaction grew slightly during the first two weeks after the crash.
  • The bear markets usually make investors fearful, as there is a lot of uncertainty. That is reflected on the maximum ETH transacted/day, which decreased massively after the bear market started.
  • Less transactions mean less fees in total. Surprisingly, the amount of ETH paid in fees per transaction also decreased inmensely.
• Bridge Activity
  • The amount bridged over time was very inconsistent during the month after the bear market started. The peak was of 1.8k ETH while the bottom had 64 ETH bridged per day. On the other hand, the number of bridge transactions and bridgers increased during the first weeks, but went down suddenly after.
  • The top 3 bridged tokens by volume and number of bridge transactions were: 🥇USDC🥈WBTC 🥉USDT.
  • The most common bridger profile had a bridge size that ranged between 0 and 1k USD.
  • The most common destination over the first transaction after bridging was Hop Protocol. Synthetix, Uniswap, and Velodrome Finance followed as the other top destinations after bridging.
  • The daily events and destinations charts show some volatility in the number of transactions over time, with high spikes mainly forming at 3/4 day intervals.
  • The most common events for wallets that bridged from Ethereum to Optimism are Transfer, Approval and Deposit.
• NFT Space
  • The number of NFTs sold per day was impacted negatively, as this number decreased almost immediately after the bear market started.
  • However, the number of NFT collections sold remained fairly constant. This means that despite the overall NFT space being on a bear market, most collections were still sold but just not in the amounts previously sold.
  • Moreover, the number of NFTs sold per wallet (2.058 NFTs/seller) decreased compared to number of NFTs bought per wallet (1.69 NFTs/buyers) over time. That is because the potential growth of Optimism has caused NFT owners to hold their assets with the expectancy of them being worth more in the future.
  • Against all odds and not taking into account some specific days, the volume in NFT sales and the average sales price did not decrease during the bear market.

When was the market the most bearish?

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• The charts above compare the price trends of $BTC and $ETH with $OP. The first two tokens were selected as they are the top 2 tokens by market cap. Thus, the tendency of the rest of the altcoins usually follows these tokens tendencies.

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• The biggest market crash that signaled an incoming bear market, happened on June, when $BTC went from 30k USD to 20k USD in a matter of days, while $ETH decreased from 1.8k USD to 1k USD.

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• However, $OP’s price started dropping a couple days earlier than $BTC and $ETH. Thus, this dashboard will use the following timespan to analyze what the bear market situation looked like on Optimism: June 13th to July 13th.

Swap Activity

The exchanges used to obtain these metrics are the two leading Optimism exchanges by TVL (Uniswap and Velodrome), as well as Sushiswap.

• Despite Uniswap holding most of the trade volume and number of swappers on Optimism, Velodrome was the platform where most swaps took place.

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• The fact that Sushiswap gained popularity during the bear market did not directly impact Optimism, as the volume was very small compared to the other two platforms (which were on a downtrend during the bear market).

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• The pool with the most activity and volume during the bear market was the WETH-USDC pool.

NFT Activity

Transaction Level Data

• The transaction success rate went up slightly, and eventually held around a 92%. The number of transactions on Optimism decreased day after day as the bear market started.

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• However, this was due to the number of transactions/user decreasing, as the total transactions actually increased until it reached a peak on June 27th.

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• The total volume transacted was very volatile, where not a clear trend was developed. Nevertheless, the volume per transaction grew slightly during the first two weeks after the crash.

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• The bear markets usually make investors fearful, as there is a lot of uncertainty. That is reflected on the maximum ETH transacted/day, which decreased massively after the bear market started.

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• Less transactions mean less fees in total. Surprisingly, the amount of ETH paid in fees per transaction also decreased inmensely.

Bridge Activity

• The amount bridged over time was very inconsistent during the month after the bear market started. The peak was of 1.8k ETH while the bottom had 64 ETH bridged per day.

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• On the other hand, the number of bridge transactions and bridgers increased during the first weeks, but went down suddenly after.

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• The top 3 bridged tokens by volume and number of bridge transactions were: 🥇USDC🥈WBTC 🥉USDT.

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• The wallet 0x5c134a50c9cad0531caea982cb4426a632a2c528 bridged 11.33M USD during that month. That represented 44.2% of all bridge volume. That wallet was actually the user that performed more bridge transactions (30 bridges).

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• The most common bridger profile had a bridge size that ranged between 0 and 1k USD.

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• The most common destination over the first transaction after bridging was Hop Protocol. Synthetix, Uniswap, and Velodrome Finance followed as the other top destinations after bridging.

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• The daily events and destinations charts show some volatility in the number of transactions over time, with high spikes mainly forming at 3/4 day intervals.

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• The most common events for wallets that bridged from Ethereum to Optimism are Transfer, Approval and Deposit.

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• We confirm that the majority of users went to Hop after bridging, as the most common activity type is Layer 2. Moreover, we know these were token transfers as the contract used in 84.5% of the transactions was the token contract type.

• The number of NFTs sold per day was impacted negatively, as this number decreased almost immediately after the bear market started.

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• However, the number of NFT collections sold remained fairly constant. This means that despite the overall NFT space being on a bear market, most collections were still sold but just not in the amounts previously sold.

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• The majority of buyers and sellers lost interest, as these numbers decreased massively.

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• Moreover, the number of NFTs sold per wallet (2.058 NFTs/seller) decreased compared to number of NFTs bought per wallet (1.69 NFTs/buyers) over time. That is because the potential growth of Optimism has caused NFT owners to hold their assets with the expectancy of them being worth more in the future.

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• Against all odds and not taking into account some specific days, the volume in NFT sales and the average sales price did not decrease during the bear market.

Conclusions

• When was the market the most bearish?
  • The biggest market crash that signaled an incoming bear market, happened on June, when $BTC went from 30k USD to 20k USD in a matter of days, while $ETH decreased from 1.8k USD to 1k USD. However, $OP’s price started dropping a couple days earlier than $BTC and $ETH. Thus, this dashboard will use the following timespan to analyze what the bear market situation looked like on Optimism: June 13th to July 13th.
• Swap Activity
  • Despite Uniswap holding most of the trade volume and number of swappers on Optimism, Velodrome was the platform where most swaps took place.
  • The largest DEXs by TVL (Uniswap and Velodrome) did not go up in activity during the market. On the other hand, the DEX that did (Sushiswap), did not directly impact Optimism as its volume was too small.
  • The pool with the most activity and volume during the bear market was the WETH-USDC pool.
• Transaction Level Data
  • The number of transactions on Optimism decreased day after day as the bear market started.
  • However, this was due to the number of transactions/user decreasing, as the total transactions actually increased until it reached a peak on June 27th.
  • The total volume transacted was very volatile, where not a clear trend was developed. Nevertheless, the volume per transaction grew slightly during the first two weeks after the crash.
  • The bear markets usually make investors fearful, as there is a lot of uncertainty. That is reflected on the maximum ETH transacted/day, which decreased massively after the bear market started.
  • Less transactions mean less fees in total. Surprisingly, the amount of ETH paid in fees per transaction also decreased inmensely.
• Bridge Activity
  • The amount bridged over time was very inconsistent during the month after the bear market started. The peak was of 1.8k ETH while the bottom had 64 ETH bridged per day. On the other hand, the number of bridge transactions and bridgers increased during the first weeks, but went down suddenly after.
  • The top 3 bridged tokens by volume and number of bridge transactions were: 🥇USDC🥈WBTC 🥉USDT.
  • The most common bridger profile had a bridge size that ranged between 0 and 1k USD.
  • The most common destination over the first transaction after bridging was Hop Protocol. Synthetix, Uniswap, and Velodrome Finance followed as the other top destinations after bridging.
  • The daily events and destinations charts show some volatility in the number of transactions over time, with high spikes mainly forming at 3/4 day intervals.
  • The most common events for wallets that bridged from Ethereum to Optimism are Transfer, Approval and Deposit.
• NFT Space
  • The number of NFTs sold per day was impacted negatively, as this number decreased almost immediately after the bear market started.
  • However, the number of NFT collections sold remained fairly constant. This means that despite the overall NFT space being on a bear market, most collections were still sold but just not in the amounts previously sold.
  • Moreover, the number of NFTs sold per wallet (2.058 NFTs/seller) decreased compared to number of NFTs bought per wallet (1.69 NFTs/buyers) over time. That is because the potential growth of Optimism has caused NFT owners to hold their assets with the expectancy of them being worth more in the future.
  • Against all odds and not taking into account some specific days, the volume in NFT sales and the average sales price did not decrease during the bear market.

Methodology

• The data used in this analysis was collected by combining the information on the fact_transactions, ez_nft_sales, ez_token_transfers, dim_labels, fact_event_logs, fact_token_transfers, fact_hourly_token_prices, sushi.ez_swaps and velodrome.ez_swaps tables of the core schema of the Optimism, Arbitrum and Polygon databases.

• The first two tables were used for the three following scenarios analyzed in this dashboard: Transaction Level Data and NFT Data.

• To query the charts on Bridge Activity, the third table provided information about the bridge: volume, transactions, users and tokens transferred.

• The following two tables were required to display the most common events, destinations, activities and contract types of the wallets that bridged from Ethereum to Optimism.

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Optimism Gateway Contract: 0x99c9fc46f92e8a1c0dec1b1747d010903e884be1

• The remaining tables were used to obtain the Optimism Swap Activity.