October 28, 2021

The Bounce Is Here – Will It Last?

Introduction

It’s fascinating to see how small, intra-day moves in Bitcoin’s price can change sentiment in the blink of an eye. From euphoria to fear and now optimism again – we have seen it all in the last three days.

PEPE - "THE GOAT" @AdamHODL

$BTC at 60k yesterday vs $BTC at $60k today

Fundamentals-based investors with a reasonably low time preference will look through this noise and focus on what really matters: Fundamental catalysts as well as the macro on-chain and price structure, which ultimately indicates when the party is over.

So, is it time to be fearful or greedy right now? Given that we find ourselves in the middle spectrum of most on-chain and price models, it’s neither nor. Ideal entries with lower risk lie far behind us, while there is still tremendous potential upside to be had going forward… Play your cards well!

The Dog Coin Wars #2

• In the last few days, one event has caught a lot of attention in crypto land: The mind-boggling rise of Shiba Inu which keeps shocking the crypto community. Today, SHIB even managed to “flip” its dog coin rival, DOGE…

Source; CoinGecko

Mike DAOdas @mdudas

they keys must be lost, right? no lunatic holds an $8k investment to $5.7b with zero realized gains

Morning Brew ☕️ @MorningBrew

This wallet bought roughly $8,000 of $SHIB last August. It's now worth $5.7 billion. From $8,000 to $5.7 billion in roughly 400 days. We may actually be looking at the greatest individual trade of all time. https://t.co/LtdgQ83bKP

Maya Zehavi @mayazi

At a Luxembourg alternative asset event & I keep getting asked about Shib, but then someone is presenting Doge as a store of value…so go figure

• Make of it what you will but some believe that the current dog coin mania is not as problematic as it turned out to be last May…

Zhu Su 🔺 @zhusu

Hung out w @justinsuntron a couple weeks ago and he mentioned that the memecoin pump in May was a bearish signal, but that the memecoin pump in Oct will be a bullish signal, and that few can tell the difference I tend to believe him

ciniz.ftm 👁 $FTM to $10,000 @screentimes

MaRKet is ovErheAteD. dog COInS ARE PumpiNg. yOu knoW What HaPpENS nexT. I’M sELLIng, gl To YOu GUys…THiS IS nOt Going To End wEll https://t.co/5hAvUge5Fp

More Signs That Retail Is Coming

• The meme coin pumps are one obvious sign that right now there is a lot of retail activity going on in crypto land. It’s a clear “orange flag” that signals a higher risk level in the current market. On a more positive note, higher retail participation can also lead to some insane altcoin seasons, mostly not with a long-lasting effect however.

• Another sign that retail investors are flocking in is the popularity of apps like Coinbase and Robinhood, obvious entry gates for retail. On the one hand this is great since it seems like crypto is going more and more mainstream. On the other hand it also raises some alarm bells in the short term as smart money usually tends to countertrade the retail crowds…

Source: U.Today

Fred Ehrsam @FEhrsam

How it started How it's going

How to Spot the Macro Top #2

• Two days ago we pointed out several data science models and charts that can help identify macro market tops and bottoms. Today, on-chain analyst Will Clemente wrote a very insightful thread on the same topic. Since it’s quite a long thread, feel free to check it out in its entirety here.

Will Clemente @WClementeIII

We've been tracking the macro price reversal since summer using on-chain. Now what clues can it provide us in our effort to identify the macro price peak over the coming months? First we'll start with behavioral trends and then everyone's favorite, price targets. [THREAD 1/22]

Will Clemente @WClementeIII

Over the summer, we tracked the re-accumulation phase, as supply flowed to strong hands, made possible by a slew of new supply-related metrics. One of the early red flags I'll be looking for is a sharp decline in illiquid supply shock ratio and highly liquid supply shock ratio.

Will Clemente @WClementeIII

Another new metric created over summer is the LTH supply shock ratio. After reaching new highs (macro supply shock) it appears we are starting to top out in the metric, usual bull market behavior. But how can we utilize this moving forward?

Will Clemente @WClementeIII

We can apply trendlines to the LTH supply shock ratio. Note that we've generally found macro bottoms along the lower trendline of the ratio, and tops around the upper trendline. Would be looking for expansion towards that upper trendline to start getting cautious.

Will Clemente @WClementeIII

Next up we have a metric created by the bro @DylanLeClair_ that looks at the cost basis (realized price) of both LTHs and STHs. By taking the ratio of the two, we get clear accumulation and de-risking zones. (shown by green and red lines) We're currently far from overheated.

Will Clemente @WClementeIII

Another note on realized price: We can look at MVRV, a ratio of market value to realized value. Going a step further to z-score (adjust for volatility) the ratio, we have nice accumulation/derisking zones. Currently "luke-warm".

Will Clemente @WClementeIII

We can take a ratio of liveliness (coin days created/destroyed) and realized price. (h/t @dorinvesting) We can then take the ratio of those two things, divide that by price, and get the blue line below. This also gives us nice accumulation/derisking zones. Warming up.

• I encourage you to check out the rest of the indicators too!

MIM Listed on the First Centralized Exchange

• Daniele Sesta’s ecosystem has been on a tear lately – and there is no stopping insight. Today, MIM, the fast-growing decentralized stablecoin in the Abracadabra ecosystem, has been listed on Bitfinex, one of the biggest exchanges worldwide.

Paolo Ardoino @paoloardoino

$MIM is now a base currency on @bitfinex ! BTC:MIM trading.bitfinex.com/t/BTC:MIM?type… CC @danielesesta $SPELL

trading.bitfinex.comBitfinex

• By the way, the MIM pastures on Trader Joe have become even more attractive today…

Trader Joe (🎩,🔺) @traderjoe_xyz

Calling on the 🐸 nation Supply $MIM on Banker Joe and earn 37.3% Deposit APY and an additional 8.2% Reward APR 🧙‍♂️ traderjoseph.com/#/lending

The First Polkadot Crowdloan Opportunities

• After we brought you several crowdloan opportunities on Kusama recently, it’s now time to get ready for the first Polkadot crowdloans! A promising project with high-profile backing that recently opened its waitlist for the first batch of parachain auctions is Parallel Finance.

Parallel Finance @ParallelFi

The Polkadot parachain auction dates are officially announced! This is exciting news for all the DOT ecosystem projects. Parallel is thrilled to announce that we will bid in the first batch. Our mission is bring more liquidity and DeFi innovations to the Polkadot ecosystem.