#19 Weekly Market Update - Liquidations Liquidations…
The closer we get to halving, the more probable are volatile wicks akin to 2020, was it the one?
Welcome fellow investooors! It’s crypto time so let’s dive right in. To access more content find us here on Twitter. Enjoy!
Today, in Weekly Market Update:
Monad getting closer to Mainnet
Base overthrowing Solana
Tether profits exceed those of Goldman Sachs
GCR is back
and much more…
“The stock market is filled with individuals who know the price of everything, but the value of nothing.” - Phillip Fisher
Liquidations Liquidations…
Hong Kong announces the introduction of a BTC Spot ETF this Monday—from your perspective today—and the market reacts to this news with a wave of declines and liquidations, which on Friday cleared over $210 million from the crypto market in just 60 minutes and over $855 million within 24 hours. Why did such a retracement suddenly appear in the market when there were no extremely negative news?
This is indeed a great question, and there may be many more factors at play than it seems. However, there is something that always occurs during such drops, namely waves of selling that significantly increase the supply of these assets—which does not happen during market stagnation. Assuming we are a major player and want to soon provide our clients with crypto assets, we need to accumulate them from the market while hiding our orders and not moving the price. It is during these aggressive falls that we see whales who can gather the supply of tokens without causing price spikes, if they wanted to do this during a market lull. However, one of the most likely reasons for market retracement are liquidity fluctuations caused by the tax season in the USA, and the tense geopolitical situation in the Middle East also does not help the inflow of capital into higher-risk assets.
Adding to all this, from Saturday night to Sunday, the market experienced incredible drops—especially in altcoins—when Iran attacked Israel. This unusual event caused massive liquidations, but it also awakened the sleeping giant—GCR, who calmed the market and prices immediately began to bounce back. The power of individual actors is immeasurable.
However, the other side of the coin of such price retracements are the wonderful buying opportunities that become more attractive the closer it is to the next bull run stage, which begins after the halving and several weeks of what's called the "crab market," i.e., Bitcoin prices moving in a narrow price range without a clear upward trend that would lead us to new ATHs.
Yes, I know, I have written a lot here recently about Price Action in relation to the upcoming weeks and events, but it is precisely the behavior of prices that shows us the strength or weakness of the current market. And looking at Friday's retrace, it is enough to see how much Altcoins lost when Bitcoin held quite strong—which could suggest someone's purchases. However, abstracting from purchasing theories, it is worth looking at which projects lose the most on such drops and which show relative strength and defend previously set price levels—which you will most easily see on the 4H chart. ;)
So how did you use this dip? Happily buying up your top projects on sale or worrying about temporary drops? ;)
Monad is Approaching
In a new funding round led by Paradigm, Monad—a project competing with Solana—raises $225 million. Monad has enormous potential, as not only do they have most of the influential figures in the crypto market on board, but they have also secured support from major funds. Moreover, we are beginning to see the start of a marketing hype reminiscent of the memecoin culture, suggesting that community members can expect a substantial airdrop. A similar situation occurred with the Wormhole airdrop, where leading community figures received airdrops worth 8000 W tokens, equivalent to about $10,000 based on the opening prices of token W.
SocialFi - Round Two
When Smiley wrote about acquiring keys on Friendtech a few weeks ago, few people were interested. Since then, the value of the most interesting keys has soared, showing multiple or even tens of times increases, and the hype around FriendTech is likely just beginning. In addition, an upcoming airdrop of the already confirmed FRIEND token, rising prices of FT Points on WhalesMarket which are now close to $5 per point, and the largest capital inflow since September 2023, should be noted.
Ethena Development
The project offering high yield on its stablecoin—Ethena—adds staking of its ENA token, which will allow us to increase our rewards for holding the USDe stablecoin, e.g., if we lock 50% of our USDe value in ENA token, we get +50% staking rewards. An interesting mechanism, but the coming weeks will show whether it will enjoy long-term interest—which will also reflect how the project is perceived by investors.
Base vs Solana
Hearing arguments about how much Solana is ahead of Layer 2 projects in terms of transaction speed and costs, recent days suggest reevaluating this assumption. The Base season is just beginning, and already we see Base processing 300-400 transactions per second without any issues, while recent days have been quite challenging for Solana as many transactions are being rejected. Thus, Base is currently matching Solana in terms of transaction processing, amazing!
https://x.com/wazzcrypto/status/1777772823408234816 https://x.com/jessepollak/status/1777771094516392435
Eigen Layer Mainnet
After months of anticipation, Eigen Layer officially announces its entry into the Mainnet, yet EigenLayer's approach turns out to be quite unconventional, as despite entering the Mainnet, they have not yet released their token—perhaps waiting for better market sentiments?
News from China
The beginning of last week brought us news of massive capital flight from Chinese assets, causing huge - over 30% premiums on gold ETF prices. Additionally, capital started moving to BTC and ETH, and more entities are talking about establishing a BTC ETF in Hong Kong. Who could have expected such positive crypto news just before the halving?
https://x.com/RadarHits/status/1777288238979228088 https://x.com/EricBalchunas/status/1777317832079921165
Tether Profits
In 2023, Tether earned close to $6.2 billion, matching the profits of giants like Goldman Sachs or Morgan Stanley. However, considering that these banks have tens of thousands of employees while Tether has only about 100, this presents an interesting case that may serve as a model for future institutions, which will undoubtedly want to participate in the rapidly developing stablecoin market to gain influence and financial gains.
When is ETH Season Coming?
Recent weeks have brought very negative sentiment regarding ETH, which seemed to underperform almost the entire market and lose interest, as clearly seen in the extremely low Gas prices - which even fell below 10 (!). However, just around the corner awaits the EigenLayer mainnet, the return of SocialFi narratives, acceptance of the ETH ETF, development of Coinbase and their Base ecosystem… Are the recent weeks a typical price and sentiment trough for the asset before its rally?
Always Be Planting
A great comparison by Bob Lukas, who likens investing to caring for our own garden, which takes a lot of time and requires vast reserves of patience. However, as the old rule teaches us - Impatient in action, patient in waiting, we should always strive to plant seeds that will bear fruit in the future - not only financially. Always be planting.
Center of Best Projects?
Over the past few years, Singapore has become one of the global centers of technology. Following this trend, Arthur draws our attention to the fact that some of the more interesting projects of this cycle - such as Jupiter, Altlayer, Pendle, or Aevo, also originated in Singapore. Perhaps it's worth paying more attention during research to whether a project comes from Singapore? ;)
Summary of Eigen Layer
Together with the entry of EigenLayer into the Mainnet - as we wrote above, the next stage of the restaking era begins, which is worth preparing for. If you don’t know exactly what EigenLayer is and what its ecosystem looks like, below you will find a tweet summarizing the changes and the ecosystem.
Explosive Growth of TON
The Telegram ecosystem is gathering more and more market attention - the best part is that it gathers extremely positive attention and a lot of hype. The price of TON is soaring, tokens in the ecosystem are making almost multiples daily, and soon - on 20.04, the listing of Notcoin will take place. It is also worth mentioning the person behind the TON ecosystem, Pavel Durov, who also creates very positive vibes around himself and is slowly becoming one of CT's favorites with his “chad energy”. It will be interesting to see how the TON ecosystem develops after the release of the NOT token from Notcoin.
A thing about life
Definitely one of the better tweets this week, and since it is not strictly related to the market but rather to our life mindset, I decided to post it here. Our life mindset affects everything around us, including our market results, definitely recommend reading in your spare time and thinking about our small habits.
That’s all for today, thank you all for reading this week’s edition and see you in the next one! May the profits be with you!
To access more content find us here on Twitter. See you there!
~ Crypto o’Clock Team
This newsletter is provided for educational purposes only and does not constitute investment advice. It is not intended as a solicitation to buy or sell any assets, and readers are strongly advised to conduct their own research and seek independent financial advice before making any investment decisions. The authors and publishers disclaim any liability for any direct or consequential loss arising from any use of the information contained herein.