The Rollercoaster Ride Continues
Weekly Recap
The global crypto market continues to exhibit a range-bound choppiness, waxing and waning on the latest headlines. We saw $ETH and $BTC start the week above the $43k level after benefitting immensely from Russian sanctions and the narratives surrounding them.
Since then, markets have retreated as commodity prices skyrocket – oil hit $130 per barrel, wheat prices reached a 14-year high, and a metal exchange had to roll back transactions and limit trading because nickel prices were getting out of hand.
Such price action had many in traditional markets beating the “stagflation” drum, thus causing equities and cryptoassets to flounder.
Bitcoin caught a bid briefly on Tuesday evening following the leak of President Biden’s Executive Order on crypto, which had a surprisingly optimistic tone (more on this below) but is once again finding it to be a challenge to remain above the $40k level.
This choppiness is directly in line with what we had forecasted for the first half of this year in our Annual Outlook, and presently, few signs are pointing to any imminent breakout from this pattern.
Reports you may have missed
BTC ETFS SEE MASSIVE INFLOWS: IS CRYPTO NATIVE CAPITAL SIDELINED? BTC ETFs saw over $2.2 billion in net inflows across all spot ETFs from Monday through Wednesday of this week—the largest three-day sum of inflows since the products launched in January—bringing the five-day moving average to north of $500 million. This is certainly impressive and speaks to the explosive breakout we have seen this week. Source: Farside Investors, Fundstrat We've...
SOL OUTPERFORMANCE Last week, we highlighted the explosive activity on Solana as DEX volumes surpassed those on Ethereum, leading us to increase SOL's weighting in our Core Strategy. These elevated DEX volumes have persisted through this week, and SOL has dramatically outperformed, breaking out against ETH and gaining ground against BTC—all amid a sharp bond selloff and a rally in the DXY. Source: Artemis Source: TradingView A significant portion of...
SMALL CAP BREAKOUT A POSITIVE INDICATOR FOR BTC It is a common refrain among passive industry observers that BTC is strongly correlated with large-cap tech stocks, leading some to view BTC as a quasi-leveraged version of QQQ. However, we think this perspective is limiting. If you were to rely on QQQ as a barometer for crypto market conditions, you would experience several periods of underperformance over the course of a...
Storm-Driven Claims, Political Shifts, and Seasonality Point to Bullish Crypto Setup for Late October
MARKET INCREASES PROBABILITY OF 'NO LANDING' Over the past week, a series of stronger-than-expected economic data releases have significantly impacted market sentiment:ROBUST ISM SERVICES PMI: The ISM Services Purchasing Managers' Index came in at 54.9, significantly above the forecasted 51.7.STRONG NON-FARM PAYROLLS (NFP): The economy added 254,000 jobs, surpassing the expected 140,000.FOMC MINUTES INDICATE DIVERGENCE: The FOMC minutes revealed non-consensus at the September meeting regarding whether to cut rates by...
