Crab Season
Weekly Recap
This week’s price action left much to be desired by those trading in either direction as most major cryptoassets continued to exhibit sideways price action. After briefly falling below $38k on Tuesday, $BTC found a bid and has since recovered, sitting around $40k at the time of writing. Similarly, $ETH is below $3.8k but recovered alongside bitcoin and is once again challenging the $3k level. The rest of the crypto market followed this pattern, but its recovery has lagged. It is clear we are in the midst of a full-fledged crab market[1].
Bitcoin did outperform more speculative alts this week, as web3 and DeFi sectors dipped more than 6%, while currencies fell a mere 1.8%. As discussed, this environment is challenging for altcoins and will continue to be until the macro clouds start to clear.
Catalyst Check – Adoption in Central Africa & Central America
In recent weeks, we have become slightly more risk-averse than usual, primarily due to the impending actions of the Federal Reserve and the near-term uncertainty that it brings risk assets. Thus far, this choppy price action is in line with our expectations for this calendar year, so we are not overly concerned.
This week, several events beyon...Reports you may have missed
TURNING CAUTIOUSLY OPTIMISTIC There is a lot of pain in the ETHBTC chart. It peaked in December 2021 and, save for several brief rallies, has been on a downwards slope ever since. It peaked at just under 0.09 and currently trades around 0.038. Source: TradingView Fortunately, we have anchored most of our attention on BTC and SOL this cycle, as BTC has continued to lead the market in a generally...
BTC DECOUPLING FROM EQUITIES Over the past two weeks, BTC has begun to decouple from other risk assets. While the broader macro environment experienced choppy conditions from November 12th through yesterday, BTC has appeared indifferent to fluctuations in risk appetite, continuing its upward momentum and approaching the $100K milestone. A chart of BTC correlations highlights this decoupling, with sharp declines in its correlation to the QQQ, SPX, and IWM. The...
Market Lacks Convincing Signs of Market Froth, Major Demand Side Catalyst for CORE (Core Strategy Rebalance)
FROTH OR REPRICING? A heated debate is unfolding among crypto investors: have we just hit a local top, or will the breakout after eight months of consolidation continue higher through year-end? The crypto market has surged rapidly, as we anticipated, but the key question remains—can this rally sustain itself, or is it nearing exhaustion? Anecdotally, we are seeing renewed interest in crypto from casual observers. Friends and family are once...
TRUMP MAINTAINS A SLIGHT EDGE, BUT IT’S ESSENTIALLY A TOSSUP Well, it's here, folks – the moment that markets have been building up towards since January—the general election to decide the next President of the United States. As our clients know, we have been closely tracking polling and prediction market trends over the past several months, and these have served as a key input in our recommendations. Odds for both...
