EllioTrades

Share this post
December 10, 2021
www.elliotrades.xyz
EllioTrades Daily Roundups

December 10, 2021

Fear Holds the Market in Its Grip

Oliver Grah
Dec 10, 2021
15
3
Share this post
December 10, 2021
www.elliotrades.xyz

Introduction

As inflation and tapering fears keep the equity markets from coming to rest, we see the expected choppy and negative price action in the crypto markets as bear market vibes spread like wildfire. Are things really looking that bad?

Twitter avatar for @Tradermayne
Mayne @Tradermayne
@WClementeIII Number go up bull market number go down bear market.
4:28 AM ∙ Dec 10, 2021
93Likes2Retweets

While the risk of a prolonged bearish period is undoubtedly rising given that we have experienced a 2+ bull market, we – and other reputable market analysts – are still of the belief that this bull cycle is not over... Of course, we could be wrong, and it’s certainly wise to hedge your bets.

Twitter avatar for @WClementeIII
Will Clemente @WClementeIII
I'm always going to keep it real with you guys. We have spent almost a week now below STH cost basis. Still not a bull until $53K is reclaimed. I'm not a giga bear, just cautious until shown otherwise. Bear confirmation would be a failed underside retest.
Image
3:29 PM ∙ Dec 10, 2021
415Likes28Retweets

While crypto prices are dropping, it’s essential not to let short-term uncertainty affect the conviction in your long-term investment thesis. It’s advisable for most people to mentally separate long-term holds from short- to mid-term “swing positions.” This way, you can sleep well regardless of where the markets are heading in the short term.

Twitter avatar for @zhusu
Zhu Su 🔺 @zhusu
Fear is weakness leaving the market
Twitter avatar for @mattigags
Matti @mattigags
Some people actually thought this is going to be easy.
8:24 AM ∙ Dec 10, 2021
541Likes49Retweets
Twitter avatar for @ThetaTendies
Tendies @ThetaTendies
Instead of guessing bull or bear every 4 hours have you tried exercise and video games until price goes up?
4:36 AM ∙ Dec 10, 2021
240Likes6Retweets

Inflation… Again

  • As we prepared you yesterday, a highly anticipated CPI date release came out today… and it’s not looking good.

Twitter avatar for @APompliano
Pomp 🌪 @APompliano
BREAKING: Inflation has officially hit 6.8%. This is the highest inflation in 40 years.
1:31 PM ∙ Dec 10, 2021
7,220Likes1,505Retweets
  • While intuitively, one could believe that such high inflation numbers are good for stocks and crypto, but in reality this is not the case:

Twitter avatar for @0xSisyphus
Sisyphus @0xSisyphus
CPI (and really inflation) only matter for us in the context of tapering discussions, which are a death sentence for the levered stocks we trade
1:34 PM ∙ Dec 10, 2021
Twitter avatar for @LizAnnSonders
Liz Ann Sonders @LizAnnSonders
"Inflation is just like alcoholism. The good effects come first." - Milton Friedman h/t @bespokeinvest
1:36 PM ∙ Dec 10, 2021
448Likes85Retweets
  • What makes things a bit more complicated is the fact that stock markets often “price in” news before the fact. In this case, we already saw a stock market pullback last week and yesterday. The question is now: Will the stock markets “look through” this already expected, nevertheless still massive inflation number? Or will panic spread and the sell-off continue?

Twitter avatar for @blknoiz06
Ansem🃏💎 @blknoiz06
seems this is the widespread consensus
Twitter avatar for @ACiD_L25
ACiD @ACiD_L25
@blknoiz06 next week taper talk, wonder if market get crushed leading up to it, or after.
3:30 PM ∙ Dec 10, 2021
  • We’re certainly not out of the woods yet: Next Wednesday’s FOMC meeting will mark another critical test for the markets.

Twitter avatar for @0xSisyphus
Sisyphus @0xSisyphus
-Fed signals they think inflation (i.e. CPI) is gonna be high -market adjusts to prepare for high CPI print -CPI prints "in-line", but at nearly 7% -market is happy for a moment -market realizes Fed thinks inflation is gonna be high
2:59 PM ∙ Dec 10, 2021
72Likes5Retweets
  • With Crypto Twitter realizing how material the impact of inflation and the stock markets are on crypto prices, it’s no surprise that more and more self-proclaimed “macro experts” appear on the interweb. It’s best to take everything you read with a grain of salt.

Bild
  • With all this (tiring) talk about inflation and the stock markets, it’s essential not to neglect how strongly the crypto space is fundamentally moving ahead… Thus, at some point, prices should – in theory – catch up again.

Twitter avatar for @Blockworks_
Blockworks @Blockworks_
Today: - Whatsapp pilots crypto payments - MicroStrategy buys +1400 BTC - Pepsi releases NFT collection - Microsoft's arm invests in NFT firm - Congresswoman bought Grayscale BTC - Grammys to release NFTs - Bitcoin above $48k; ETH above $4k - Florida governor open to crypto
10:33 PM ∙ Dec 9, 2021
750Likes186Retweets

The L2 Ecosystem Is On a Roll

  • While crypto prices have not been particularly interesting recently (unless you like choppy price action), there is no lack of exciting developments in the L2 ecosystem:

  • Starting with Polygon doubling down on its ZK-Rollup strategy and incorporating yet another project, the popular Ethereum scaling project is definitely well-positioned to expand its strong position in the L2 ecosystem.

Twitter avatar for @0xPolygon
Polygon | $MATIC - We're hiring! @0xPolygon
1/8 It's official: #Polygon welcomes @mirprotocol, a groundbreaking ZK startup in a $400M deal! Mir's amazing team developed the world’s fastest ZK scaling tech; we are joining hands to utilize it and build Polygon Zero - a highly-scalable, Ethereum-compatible ZK Rollup. 🦄💫
4:41 PM ∙ Dec 9, 2021
1,597Likes454Retweets
  • In contrast to most other L2 networks (e.g., Arbitrum, Optimism, zk-Sync, StarkNet), Polygon already has its MATIC token. While MATIC has already performed very well this year and is not immune to a possible market downturn, MATIC’s fundamentals are certainly among the best in the crypto space.

  • However, MATIC has yet to break its old all-time high at $2.62 to enter price discovery mode… So there is certainly some risk in the short to mid term.

  • A critical aspect for L2 adoption are on-ramps. So far, there have only been two options to get tokens to an L2: 1. Bridge tokens from Ethereum (or another L1), which often includes high gas fees, or 2. Send Tokens directly from a CEX like Binance or Coinbase. Unfortunately, CEXes have been relatively slow to adopt L2 transfers so far, but things are improving on that front.

  • Thanks to Ramp Network, there is now a third option: A direct fiat on-ramp to L2s. Starting with Loopring and soon expanding to other networks, this marks a significant step to fostering L2 adoption.

Twitter avatar for @macro_diary
byron.loopring ( B.👾 ) @macro_diary
Fiat direct <> L2 is a game changer for Decentralized Exchanges DEX’s now become real competitors for CEX’s 🔥 Users get the CEX experience (fast, cheap trading) without the custody risk 💙 (Testing on Loopring L2 now, live soon!)✨
Image
7:27 PM ∙ Dec 9, 2021
1,849Likes352Retweets
  • Another favorite project of ours at the L2 front, StarkNet, is making great progress after its recent launch. Keep your eyes peeled for more news on the evolution of this promising ZK-Rollup solution.

Twitter avatar for @EliBenSasson
Eli Ben-Sasson | ZK-STARK Maximalist @EliBenSasson
10 days since #StarkNet α launch 20+ dApps we know building there Probably nothing.
8:28 AM ∙ Dec 10, 2021
97Likes5Retweets
  • Another Ethereum L2 solution gaining traction is Aztec, a ZK-Rollup-powered protocol focused on private token transfers. Since the project doesn’t have a token (yet) – just like many other L2s – it might be worth opening and funding an Aztec account (which you can do here). The brief time investment might be rewarded with a juicy airdrop…

Twitter avatar for @aztecnetwork
Aztec @aztecnetwork
Aztec Connect, the first private bridge for Ethereum DeFi, is live on testnet. Up to 100x gas savings with fully private transactions by default. Private DeFi is here.
Image
1:45 AM ∙ Dec 10, 2021
824Likes167Retweets
Twitter avatar for @aztecnetwork
Aztec @aztecnetwork
$ETH TVL on Aztec. Probably nothing.
Image
2:00 PM ∙ Dec 10, 2021
69Likes8Retweets

The Next Airdrop For L2 Early Birds!

  • If you have been reading this newsletter for a couple of weeks and you share our excitement for L2s, then you will most likely have tried out Hop Protocol – an excellent bridging protocol that allows for quick token transfers between various L1s and L2s. If you did give it a shot, guess what? You’re eligible for another airdrop! 🎉 (thanks to @darshanbaba for giving a hint!)

  • While it’s not Hop Protocol itself launching a token, cross-chain DeFi protocol Instrumental Finance is distributing a percentage of its token supply to users of various bridging protocols. Besides Hop Protocol, this includes Composable’s Mosaic (which we repeatedly covered!), Celer’s cBridge, and Connext’s bridge!

  • Here you can check if you’re eligible for the airdrop. All relevant information on the token distribution is shared in this article.

  • By the way: History has shown that dumping airdrops in s often a viable short-term but a terrible long-term strategy. Just look at Uniswap’s UNI token: After the initial airdrop dump, UNI became one of the largest DeFi tokens, yielding insane gains for people who held the token long enough.

  • When it comes to Instrumental Finance, I could definitely see the project do very well in the mid- to long-term as it’s perfectly positioned in the L2 narrative:

Leveraging several key features of the Composable technology stack, Instrumental aims to enable seamless chain- and layer-agnostic transfer, swapping, and liquidity provider APY maximization capabilities in order to provide novel yield generating opportunities on various L2s and L1s for its users.

3
Share this post
December 10, 2021
www.elliotrades.xyz
3 Comments
ybRUBIN
Dec 11, 2021Liked by Oliver Grah

Many thanks!

Expand full comment
ReplyCollapse
Michael John Scott
Dec 11, 2021Liked by Oliver Grah

Knowledge crushes Fear

Expand full comment
ReplyCollapse
1 more comment…
TopNewCommunity

No posts

Ready for more?

© 2023 EllioTrades
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing