SOL Finding Support, BASE Booming with Activity
Market Update
- After another evening of crypto price weakness, the market is showing some near-term resilience, bouncing in tandem with equity and bond markets. BTC has rebounded to above $26k after a momentary dip to $25.5k, and ETH is seeking stability above $1,650 following a drop to $1,580 last night. Altcoins are at the forefront of the recovery, with standout performers including SUI, up over 10% after numerous short positions were liquidated, and DYDX, up 7% following its recent testnet launch. BNB, having displayed significant weakness yesterday evening amid rumors that CZ was converting his BTC holdings to BNB to support the price, has recovered, climbing nearly 5%. Simultaneously, interest rates across the curve are receding due to disappointing PMI data from Europe and the US, causing the DXY to give back its early gains. Major equity indices are also ascending, with traders awaiting Nvidia's earnings, scheduled for release after today's closing bell.
- Despite the recent market pullback, Base, the layer 2 blockchain supported by Coinbase, has seen a surge in activity, hitting a record average of 16 transactions per second (TPS) yesterday, outpacing layer 2 rivals like Arbitrum and Optimism. This impressive performance in recent weeks is primarily due to the popularity of friend.tech, a new social market platform with over 100,000 users that allows trading in shares of public figures. More protocols, such as Synthetix, are planning to deploy on Base, and Arkham Intelligence has just added support for this newly launched L2. Since its mainnet launch a month ago, Base has accrued nearly $4 million in total fees, $2.5 million of which is retained by Coinbase, the sole sequencer of the L2. Difficult as it is to annualize from such a small sample size, should Base activity continue at the current pace, sequencer earnings would add $30 million annually to Coinbase's net revenue. This, along with the apparent larger share of interest income following Coinbase's investment in USDC issuer Circle, represents the second of two underreported tailwinds favoring the leading exchange.
- EigenLayer, an Ethereum re-staking protocol, has seen a dramatic surge in its total value locked (TVL), experiencing a threefold increase to nearly $240 million. This significant growth occurred shortly after the platform's second round of deposit caps for liquid staking assets, including Lido Staked ETH, Rocket Pool ETH, and Coinbase Wrapped Staked ETH, was quickly filled, causing a spike in TVL. The restaking limit of 100,000 ETH ($165 million) was promptly met after it was temporarily opened yesterday, reflecting the heightened interest in the protocol. EigenLayer's core functionality involves re-staking ether and the mentioned liquid staking tokens to fortify other blockchain networks, with Stage 1 having been launched on Ethereum mainnet in June. EigenLayer's multisig system will govern all future adjustments to the LST cap. Adding to the excitement, EigenLayer is unveiling a new NFT collection named EigenWorlds, scheduled for minting today, and participants in yesterday's re-staking event are expected to be whitelisted for the mint.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Solana looks to be trying to stabilize after having reached a key area of near-term technical support. Weakness in SOL since 7/14 has found support near its 61.8% Fibonacci retracement of the prior rally from June 2023. Additionally, the area near $19.36 which was briefly touched on an intra-day basis Tuesday marked an alternate 61.8% Fibonacci extension target of the most recent drawdown from 8/15 minor highs. To have conviction that a low is in place which should lead higher, a move back over 22.82 is necessary. This lines up with a 50% retracement level that also coincides with prior lows from late July. Such a development would help SOL change structurally for the better, whenever it occurs and lead to rallies back to $32 and over in the months to come. In the event that $19.36 is breached, it's hard to rule out weakness down to $16-$16.50. However, this would represent an excellent risk/reward opportunity.
Daily Important Metrics
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All metrics as of August 23, 2023 11:41 AM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $513B | $26,351 | ↑ 1.58% | ↑ 59% | |
 ETH | $199B | $1,655 | ↓ -4.99% | ↑ 38% | ↓ -21% |
 ADA | $9.2B | $0.2615 | ↓ -3.34% | ↑ 5.94% | ↓ -53% |
 SOL | $8.7B | $21.27 | ↓ -7.72% | ↑ 115% | ↑ 56% |
 DOT | $5.5B | $4.51 | ↓ -4.25% | ↑ 3.76% | ↓ -55% |
 MATIC | $5.3B | $0.5693 | ↓ -5.63% | ↓ -25% | ↓ -84% |
 LINK | $3.3B | $6.13 | ↓ -7.38% | ↑ 10% | ↓ -49% |
 NEAR | $1.1B | $1.13 | ↓ -5.58% | ↓ -11% | ↓ -70% |
 DOGE | $0.0000 | $0.0001 | ↑ 0.00% | ↓ -100% | ↓ -159% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -28% | $17.70 | ↑ 4.12% | ↑ 114% | ↑ 54% |
| BITW | ↓ -49% | $11.22 | ↑ 1.25% | ↑ 109% | ↑ 50% |
| ETHE | ↓ -35% | $10.65 | ↑ 4.82% | ↑ 124% | ↑ 65% |
| BTCC | ↑ 0.21% | $4.79 | ↑ 1.37% | ↑ 58% | ↓ -0.81% |
News
MARKET DATA
CoinDesk Ether Staking Demand Remains Unfazed as EigenLayer 100k ETH Cap Limit Filled Within Hours Seattle-based decentralized finance (DeFi) platform EigenLayer has experienced a 207% surge in total value locked (TVL) after it raised its liquid restaking cap... |
Decrypt.co SUI Jumps Overnight as Bearish Traders on Binance Get Blown Out A short-squeeze on Binance complimented by increased spot volumes on Upbit may have contributed to SUI’s latest rise. |
DOSE OF DEFI
Decrypt.co Balancer Lauded for 'Excellent Communication' of Multi-Million-Dollar Vulnerability Balancer disclosed a critical vulnerability, safely protecting user funds while also keeping the markets cool. |
CoinDesk Curve Crisis Shows Pitfalls of Decentralized Risk Management Top DeFi lenders allowed a crypto CEO to take a risky bet, raising key questions about how they manage risk. |
REGULATION
Decrypt.co Odds SEC Approves a Spot Bitcoin ETF Are 'Better Than 50/50', Says Marathon Digital CEO Fred Thiel reckons the SEC’s approval of Ethereum futures ETFs will also increase chances for a spot Bitcoin ETF approval. |
Coin Telegraph EU Data Act smart contract ‘kill switch’ brings uncertainty EU lawmakers have reached a political consensus on the Data Act that has a “kill switch” for smart contracts, causing ... |
FUNDRAISING AND M&A
Decrypt.co Binance Labs Announces Investment in Fixed-Yield Protocol Pendle Finance Binance Labs' backing of Pendle Finance is also another push for the investment group into the liquid staking sector. |
MINING
Decrypt.co It’s Now Harder Than Ever to Mine Bitcoin Mining appears to be getting more popular, but don’t look to Bitcoin’s price to understand why. |
HACKS, EXPLOITS, AND SCAMS
CoinDesk FBI Says North Korean Hackers May Try to Sell $40M of Bitcoin North Korean hackers look set to try to sell more than $40 million of stolen bitcoin (BTC), the Federal Bureau of Investigation (FBI) said. |
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