October 22, 2021
Bitcoin Is Taking a Breather – but Some Altcoins Are Having a Great Day
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Introduction
Yesterday we witnessed how fast the crypto markets can move: Minutes after publishing this newsletter, Bitcoin decided to experience an impressive multi-thousand dollar flash crash, sending pain especially to traders who were sitting in leveraged long positions. The cooldown seems to continue into the weekend, with Bitcoin dropping below $62k today.
As we pointed out yesterday: Expect increased volatility now that the crypto markets have entered the second phase of this macro bull market cycle – especially once the mania phase in altcoins starts. Major price rises as we have witnessed in the last weeks will almost always be followed by minor or major pullbacks and shakeouts. But don’t be fooled: The fundamentals and on-chain metrics still point towards a continuation of this bull market – it’s just not a one-way street.
Market Outlook
In case you wonder what these brutal price moves like we have seen yesterday and today are good for: They shake out over-leveraged and greedy traders and reset both technical indicators and sentiment to more sustainable levels.
Now that Bitcoin is slowing down after its impressive run, we see Bitcoin dominance decrease (for three days in a row) and select altcoins explode in price again. An emotionally tricky game begins: You miss a pump and ask yourself, which altcoin could be next. On the one hand, you don’t want to risk everything in case of a brutal correction led by BTC, but you also don’t want to miss those juicy gains… Remember: The best entries come during sharp dips in bull markets, not after weeks of positive price action.
There is no right or wrong answer to what’s the perfect approach how to navigate this market. Fundamental-based investing and not chasing green numbers are the biggest cornerstones of keeping your risk-to-reward ratio in check. This implies, however, that you do your work to identify coins BEFORE they attract everyone’s attention with massive pumps.
Because of the rising risk levels in the markets, we will lay out breadcrumbs and showcase positive fundamental developments, but we will NOT give you ready-to-go buy and sell recommendations. If you want more breadcrumbs and timely updates, feel free to follow our research team on Twitter (@DecentraThought & @cryptoolii).
Here is some advice by crypto trader Michaël van de Poppe that summarizes the current outlook and risk situation quite well. You need to have a strategy in place and remain cool-headed!
Thorchain Back with Strength
We have pointed out several times recently that cross-chain trailblazer Thorchain, despite its massive setbacks this summer, has fixed most of its issues and is likely going to come back with strength. Those who had conviction and bought the dip got rewarded now!
Let’s hope that Thorchain’s mission to enable trustless cross-chain swaps (one of the “holy grails” of DeFi) will soon be materialized in its entirety. Then RUNE could likely be one of the strongest performers in the next bullish leg of the market.
Elrond Back in the Spotlight Soon?
It has been rather quiet around Elrond in recent months, with other L1s stealing most of the attention. With an important upcoming catalyst, Elrond might get to enjoy some anticipatory excitement and positive price action in the coming days and weeks.
Price-wise EGLD has been consolidating for quite some time…
Corporations and Banks Don’t Want to Miss out on Crypto
While we’re waiting for the big retail wave to come into the crypto markets (and potentially mark a cycle top), corporations and institutions are clearly “FOMOing” in.
Remember the fake Litecoin-Walmart announcement just a few weeks ago? Well, it seems like the retail giant is getting into crypto after all by installing hundreds of crypto ATMs at its shops.
This year, we have witnessed more and more banks around the world (especially in the US) starting to roll out crypto services to their clients. Those who have been on the sidelines are now asking themselves how to get involved with crypto as well – if not publicly then at least secretly.
Meanwhile, we see FTX breaking historic new ground in crypto marketing by distributing crypto and bringing NFTs to the masses at a live sports event. And FTX is only getting started leveraging its massive sponsorship deals to bring millions of new retail investors to crypto.
The WorldCoin Controversy
A few days ago, a new project started causing debate on Crypto Twitter: WorldCoin. The project has drawn a lot of attention for mainly two reasons: Firstly, it has major backers such as Sam Bankman-Fried, Coinbase, and Andreessen Horowitz. Secondly, it has a VERY unusual distribution mechanism.
In short, what is WorldCoin?
WorldCoin is new, collectively owned global currency that will be distributed fairly to as many people as possible. It runs as a “Layer 2” Ethereum-based cryptocurrency.
Not surprisingly, there is a lot of controversy going on with proponents and critics crossing swords on Crypto Twitter. Feel free to form your own opinion since we have no idea yet how this project will look once fully rolled out. We will keep an eye on it!
Sam Altman @sama
Introducing Worldcoin, a new cryptocurrency that will be distributed fairly to as many people as possible. Details about how it works: https://t.co/DLcAmUA4u3 https://t.co/xC3W2U6Xi3
🌕🔥🐱 @moonfirecat
@0xmons @jacksondame also > Blania told CoinDesk the amount each person receives depends on how early in the project’s roll-out they got involved, with the amount diminishing as more people are onboarded I’m not getting it
$MIGUEL Piedrafita @ Lisbon @m1guelpf
🔥 I scanned my iris to participate in an experiment for global currency, UBI, biometric sybil-resistance and crypto. Here’s what @worldcoin is, how it works, how it might not work, and why I’m very excited about it anyway. https://t.co/WvZHSnIWXrAavegotchi’s First Land Auction Is Coming up
If you’re a follower of the early NFT-project Aavegotchi, exciting times are ahead: In just six days the first land auction for Aavegotchi’s highly anticipated Realm Metaverse is kicking off! If you want to participate in the a(u)ction and earn some GHST (yes, for being outbid you can earn GHST tokens thanks to Aavegotchi’s revolutionary “bid-to-earn” mechanism), you can now start preparing yourself by reading the auction guide which got released today.
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