Tactical Trade Update
Following our recommendation on Thursday afternoon for a short-term tactical trade on $AVAX, the asset experienced a promising rally to nearly $12, marking a robust 30% rebound from its recent lows. However, in the overnight hours, a critical development emerged: Stars Arena, the SocialFi app that catalyzed recent AVAX activity, appears to have been compromised. The price of AVAX has since returned to just above our initial entry point. It's crucial to clarify that the vulnerability lies within the app itself, not the Avalanche blockchain, so your funds remain secure. Despite the vulnerability being patched and some remaining upside potential, the risk/reward calculation for AVAX has fundamentally shifted. In light of these overnight developments, we believe the most prudent and proactive course of action is to exit this trade at this time.
Reports you may have missed
CORE STRATEGY: FOCUS ON MAJORS, KEEP HEAD ON SWIVEL UNTIL BONDS/DXY RELENT We think it's right to expect a bounce into year-end, potentially starting tomorrow if PCE data comes in soft. In our view, this cycle is far from over, but until bonds find a bottom and the USD tops, it’s likely best for the more tactical investor to stay nimble and prepared for opportunities upon confirmation of this trend...
CORE STRATEGY Our base case assumes that the macro environment will remain accommodative for crypto through year-end. However, in light of recent market action, we remain alert for signs of a local top (not a cycle top). That said, it is difficult to justify a risk-averse stance at this stage and think it is right to lean into this altcoin rally. Source: TradingView, Fundstrat Source: TradingView, Fundstrat STRONG DOLLAR +...
Today's employment numbers broadly met investor expectations, placating a nervous market. Risk assets rallied, aligning with our view that yesterday's de-risking would not persist through today. Yields continued their downward trajectory, and Fed funds futures also declined, reflecting the market's adherence to the Fed's dovish messaging. Yields Falling: Source: TradingView Fed Funds Futures Showing More Cuts: Source: TradingView Oil prices nearing YTD lows likely assisted in alleviating near-term concerns about...
INDICATIONS OF FROTH Given the violent nature of the past month’s rally, we have been vigilant for signs of a local top. It would be disingenuous to claim that some qualitative "top signals" are not flashing right now. XRP—which we noted as a possible election trade back in October—with only 1–2k daily active addresses (vs ETH's over 400k, source: Artemis), is ripping toward new highs while influencers take to TikTok...