🧘♂️WARNING: BTC Breaking Records?
Market Meditations | October 19, 2021
Key BTC, DeFi and Altcoin Updates
With Bitcoin looking set for ATHs, we bring you a special letter.
☄️ Today’s Market Meditations will take a look at Bitcoin on lower time frames to begin with.
? Next, we will venture into opportunities in the world of DeFi.
? Finally, we will rejoice in the success of a recent altcoin that we flagged to our readership last Wednesday.
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⏰ In A Rush?
⚡️ French central bank pilots blockchain-based CBDC for debt market
? Lending platform Sublime, which lets users stake their ‘digital reputations,’ raises $2.5 million
Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool.
? BTC, DeFi and Mystery Altcoins
There is a lot of green in the markets at the moment and Bitcoin is struggling at the $62k level.
On the lower time frames, we see a strong uptrend on the 4 hour. Key level to watch on a lower time frame is $60k. Above there, there is more reason to believe in further upside.
From a fundamental perspective, we have two strong indicators:
1) ProShares bitcoin futures ETF to launch on the NYSE tomorrow.
The hope is that similar products will win regulatory approval and accelerate the flow of investments into crypto.
2) Square is considering building a Bitcoin Mining System.
We’ve heard the news from Jack Dorsey and of course, this is another positive development for BTC.
DOT has done quite well recently, with a strong uptrend since around mid-July.
Recent explosive pump from $36 to just above $40.
Key psychological level to hold is $40. That being said, above $36 we look bullish and expect further upside. $44 looks like a breakout level with potential price discovery thereafter.
Of course, there are important developments happening in the ecosystem:
The Polkadot Auctions are due to commence on November 11. This is where the Polkadot community can support projects that wish to deploy to the Polkadot network.
What you’ll need to do is loan your DOT in favour of the project you want to support.
Although it is described as loaning, it is worth noting that your DOT will actually be locked for 2 years. Albeit, this is never touched by the team you are contributing to.
After 2 years, the DOT is returned to its rightful owner.
If your project you contributed to does win a parachain slot, you are typically rewarded with native tokens from the project.
For more on participating in these auctions, check out this guide from Moonbeam.
Binance has announced that they will be supporting the auctions.
Polkadot has also recently announced that they have secured a $777 million development fund.
Remember, Kusama is a public pre-production environment for Polkadot, one that allows any developer to experiment and test new blockchains or applications before releasing them on Polkadot. So the fate of the tokens are intertwined.
Hasn’t quite matched DOT’s recent performance but perhaps it is currently lagging behind.
Key psychological level at $400. Further upside likely thereafter.
Last week we flagged Fantom on our newsletter. We provided a step by step guide on how to identify profitable altcoins using Nansen on-chain analytics. We managed to spot that Fantom was gaining a lot of traction.
Since we wrote the letter (13th October), the price has increased 20% in just 6 days. We are hoping some of our readers were able to capitalise on this opportunity.
How do the technicals look now? Good pump but struggling with the breakout.
As long as we are above $2, we are looking relatively strong.
Data compiled by DeFi Llama shows that more than 40 projects have been built using Fantom. Their total value locked (TVL) has skyrocketed to more than $5.28 billion, which is a strong number considering that Fantom is a relatively new platform.
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? What’s the Meta With You?
The Metaverse hasn’t arrived just yet BUT we are getting closer and closer to it as shown with the statements below. But can you catch which one of them is a lie?
Last year, a concert in Fortnite gathered over 12.3 million viewers to watch a 10-minute Travis Scott performance.
Snoop Dogg recently entered The Sandbox and is offering a variety of social events and concerts on the decentralized platform.
Olivia Rodrigo performed her song “Good For You” on Decentraland this year in a virtual concert.
? On-Chain Melody
On-chain analysis has got a funny old reputation – equally admired and despised by opposing parties, it is accused by some as only of use with hindsight.
So is the Wizard Willy Woo just dancing to Soothsayer Saylor’s tune, or is there anything worth noting?
At a pivotal point in Bitcoin’s price journey, let’s review some metrics using Glassnode’s Week On-Chain review:
Long-Term Holders: defined as holders whose Bitcoin has not moved in more than 155 days, and who typically accumulate in a bear market and sell into bullish strength (smart money). Glassnode monitors the change in net position of these wallets and concludes that the last week has seen the start of the profit taking cycle.
Exchange Net Position: defined at the sum of inflows minus outflows to centralised exchanges. The last three months have seen significantly more outflows, suggesting an unwillingness to sell, but recently the net change has returned to neutral. There is currently sufficient demand to meet the selling pressure, but holders are starting to re-enter the market, in a similar pattern to last year’s approach to ATH.
Futures Open Interest: defined here as the value of the futures contracts that have not been settled. A rising trend shows more people are longing or shorting the asset and thus the leveraged (borrowed) funds are growing with it. The current value is relatively high, and in combination with a relatively low trading volume increases the chances of a cascade liquidation as stop losses trigger.
So a combination of nervousness and excitement!
Recognise that these metrics are most insightful over weeks and months rather than days and minutes, and are therefore potentially more useful to longer-term investors.
For more information on on-chain analytics, check out our free guide.
3. Olivia Rodrigo performed her song “Good For You” on Decentraland this year in a virtual concert.
Although it’s worth stating that this hasn’t happened yet. As with all things, good things come to those who wait. So who’s to say what will happen in the future.
Currently the level of metaverse we have is contained in individual ecosystems. For example Fortnite players can’t leave a concert to return to their virtual homes on a plot of land in The Sandbox. The skin you bought for your League of Legends character can’t be applied to your undead Priest in World of Warcraft. The metaverse could change all that.
To find out more about the metaverse and what to expect in the future check out our Introduction to the Metaverse Guide.
??♂️✍️ Stories in this newsletter were written by Isambard FA, Nick T., Max P., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Gerasimos P.
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