Crypto, Distilled #58
Market Overview, Key Trends, Crisp Insights
Welcome to the 58th edition of "Crypto, Distilled," your 5-minute biweekly edge in the crypto market.
Please note that all content is for informational purposes only and should not be considered financial advice. For full details, see the disclaimer.
Market Overview:
Over the past week, BTC underperformed following its ETF approval, while ETH significantly outperformed, rising 14.5% respectively.
Altcoin Market Resembles Wall Street Cheat Sheet Pattern:
Crypto trader Resdegen observes a striking resemblance between the Wall Street Cheat Sheet pattern and the altcoin market, excluding BTC.
This parallel, while speculative, aligns with the disbelief phase seen in recent sell-the-news events like the BTC ETF:
Is The BTC ‘Sell The News Event” A Potential Higher Low?
Analyst Crypto El Presidente suggests that BTC might be establishing a new higher low in its uptrend, in the aftermath of the BTC ETF launch.
He highlights that the BTC 4-hour chart is nearing oversold conditions.
Notably, since September, every oversold 4-hour period has resulted in a higher low without breaking the previous low, which currently stands at $40.8K.
Rapid ETH/BTC Reversal Post-BTC ETF Approval:
The ETH/BTC price action has swiftly erased over 100 days of gradual decline in just three days following the approval of the first ETF.
Crypto analyst Pentoshi points out that this kind of price movement is common across most cryptocurrencies, irrespective of the trading pair.
In this highly volatile market, it's possible to undo a year's worth of downtrend within a single week on occasion.
Possible Multi-Month Top for SOL/ETH Pair?
As attention shifts towards ETH as the potential next ETF candidate, ETH has been outperforming SOL heavily.
This could potentially confirm the multi-week and possibly multi-month top for the SOL/ETH valuation, as hinted at late last year in past editions.
News Highlights:
BlackRock CEO Larry Fink Endorses BTC As A Protective Asset Class:
In a significant development, Larry Fink, the CEO of BlackRock, voiced a supportive stance on BTC in a recent CNBC interview.
Fink stated, "I believe it goes up if the world is frightened, if the people have fearful geopolitical risks, they're fearful of their own risks.”
“It's no different than what gold represented over thousands of years. It is an asset class that protects you."
First Day Of U.S. Spot Bitcoin ETFs: Over $4.5 Billion In Trading Volume
U.S. debut of spot bitcoin ETFs witnessed an impressive $4.5 billion in trading volumes on their first day, per Yahoo Finance.
The Grayscale Bitcoin Trust (GBTC), recently approved for ETF conversion, contributed about half of this volume.
BlackRock CEO Larry Fink Endorses ETH ETF:
Following the launch of the BTC ETF, Larry Fink, CEO of BlackRock, expressed support for an ETH-based ETF in a CNBC interview on Friday.
Fink stated, "I see value in having an Ethereum ETF. These are just stepping stones towards tokenization, and I really do believe this is where we're going to be going."
An ETH ETF Approval Could Come As Soon As May:
Eric.eth, a notable figure in the crypto community, suggests that an Ethereum ETF might receive approval as early as May.
This prediction is grounded in the first final deadline observed among the current batch of ETH ETF applications.
Key Market Trends:
Bitcoin's 365-Day Running ROI Nears 3x:
The latest chart shows BTC’s substantial 365-day running return on investment (ROI), approaching an impressive 3x for those who invested a year ago.
Interestingly, the chart reveals a downward trend in the peaks of running ROI across various timeframes, indicating diminishing returns.
This trend suggests that as the market capitalization increases, expected returns decrease after a certain period.
2024 Rankings: Top Chains By DeFi Velocity
DeFi Velocity, a metric that tracks how frequently a dollar is transacted on a chain, serves as an effective indicator of chain activity.
A higher DeFi Velocity implies more activity on the chain.
In both 24-hour and 7-day volume metrics, Solana, Injective, and zkSync Era emerge as the top three.
Both Solana and Injective have seen a surge in activity recently, which is reflected in their high volumes.
Additionally, there's growing anticipation for the zkSync Era airdrop.
The influx of airdrop farmers and bots, engaging in daily transactions, significantly contributes to the chain's elevated volume.
Arbitrum Hits ATH, Fuelling Layer 2 Resurgence:
According to The DeFi Edge, the Arbitrum token (ARB) has gained significant traction among smart money.
Smart money = a term subjectively used by The DeFi Edge to describe well-informed market participants.
While ARB's price has seen notable increases, the emphasis is more on its growing prominence in the market, reflecting broader interest in Layer 2 (L2) solutions.
The Total Value Locked (TVL) in L2 solutions has risen by 7% in the last week alone, setting a new high at $22.5 billion.
Additionally, speculation about Ethereum ($ETH) potentially receiving ETF approval is boosting interest in Ethereum and its associated L2 tokens.
MakerDAO's Revival: Revenue Approaching Record Highs
MakerDAO (MKR) has made a notable comeback after a period of sustained sell-offs.
According to data from Blockwork Research, MKR is on track to achieve an impressive $200M in annualised revenue.
Weekly Insight - The Rise Of Ethereum:
The 'Path To Altseason' theory by SecretsOfCrypto is renowned for its insightful analysis of crypto market cycles.
Following the landmark approval of the BTC Spot ET, it appears we could be transitioning from Phase 1 to Phase 2 of this cycle.
Ethereum is at the forefront of significant developments, each acting as a catalyst for its potential growth:
Ethereum ETF Aplications
The anticipated EIP-4884 Proto Danksharding Upgrade, aimed at reducing Layer 2 fees.
The emergence of Eigen Layer and the accompanying increase in yield within the liquid staking ecosystem.
The abundance of catalysts for ETH, contrasted with the fewer speculative drivers for BTC post-ETF, suggests that ETH may outshine BTC in the medium term.
This perspective is insightfully encapsulated by Pentoshi:
Explore My Ethereum Strategies in My Premium Newsletter:
Explore exclusive strategies for capitalizing on the Ethereum trend by subscribing to my premium newsletter.
One of my significant ETH-related investments has surged over 30% in the past week, outperforming BTC. It has also tripled in price over the past three months.
This project leads in an emerging Ethereum niche, supported by consistently improving fundamentals over the past year.
My Crypto Portfolio:
Here’s my core crypto investments, listed in order of largest to smallest holdings, reflecting their weight in my portfolio.
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