šWhere are we in the cycle?
šWhere are we in the cycle?
weekly valuable insights
In todayās newsletter:
šWhere are we in the cycle?
šOn-chain alpha
šCrypto meme of the week
šļøThe latest DeFi news
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šWhere are we in the cycle?
If you saw my recent X posts, you already know Iām bullish on crypto for Q4.
But in this issue, Iāll cover where exactly I believe that we are in this crypto cycle and explain why I remain optimistic about the near future.
TL;DR: There are lots of reasons to be excited.
Letās start with a few crypto charts that I consider to be relevantš
1/ BTC Cycle ROI is exactly where it usually is at this stage in the cycle
This market cycle has been very similar to the 2016 and 2020 bull markets in terms of BTC performance so far.
Financial markets tend to be cyclical as human nature never changes. This is why it seems unlikely that BTC has already topped.
The past 2 bull markets had 2 things in common:
the real BTC uptrend started ~170-180 days after Bitcoin Halving
the BTC cycle top was hit ~480 days after Bitcoin Halving
Since the 2024 BTC Halving Event, only 160 days have passed.
Given what happened in the past, thereās a good chance that weāre now only a few weeks away from the moment when BTC resumes the uptrend.
Obviously, this assumes that history will repeat itself, but I donāt see any major reason why this time would be different.
2/ BTC Exchange Reserve is dropping at a record pace
Since January 2024, over 500k BTC has been withdrawn from exchanges.
When whales withdraw their tokens from an exchange, this usually signals that they plan to hold them for a while rather than sell them in the near future.
The chart from the image above seems to show that whales have been heavily accumulating BTC over the past few months.
If this accumulation continues, a supply squeeze is imminent.
3/ Bitcoin Season is historically the first phase of every new cycle
The infographic from the image above was made many years ago but sums up pretty well what has happened both in 2016 and 2020 cycles.
Firstly, BTC rallies and its dominance goes up
Then attention starts shifting to large caps (ETH, SOL, etc.)
In the end, almost every altcoin starts pumping regardless of its market cap or fundamentals
Recently, BTC dominance hit a new multi-year high.
This might indicate that weāre now still in phase 1. Historically, altseasons begin only after BTC dominance starts going down. And I think that weāre getting close to this 2nd phase.
All the above charts and the historical data from the previous bull cycles make me think that BTC is very likely to hit new all-time highs in Q4.
What could go wrong?
Letās also briefly talk about the bear case.
Thereās still a of macro uncertainty right now.
If a global recession starts, crypto is going to be highly affected.
However, the reason why I believe that a recession is unlikely to happen in the near future is that 2024 is an election year for the US.
In order for Kamala Harris to have a shot to win the US presidential elections, the democrats will do everything in their power to postpone it.
While I think that a US recession could start at some point in the next 3-4 years, I definitely donāt see it happening in 2024.
Thus, Iām bullish on crypto for Q4.
Hopefully, conviction and patience will soon start paying off.
Cheersš„
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On-chain Alphaš
Sui surpassed Polygon in TVL for the first time
One of the fastest-growing blockchains is Sui, an L1 blockchain leveraging parallel transaction execution to achieve a high transaction throughput.
Two key reasons for its recent surge across most metrics seem to be its very strong community and its recent growth in popularity on X.
On top of this, its team has also announced some big partnerships with several web2 and web3 giants including Circle and Tiktokās parent company.
Crypto Memeš
The latest developments in DeFi
The SEC approved options for BlackRockās Spot Bitcoin ETF
Solana's Firedancer validator client went live on the mainnet in non-voting mode. Firedancer will significantly increase Solanaās scalability
Trader Joe DEX has rebranded to LFJ
Ethena has introduced UStb, a new stablecoin backed by Blackrockās BUIDL fund
Zero1 Labs partnered with Ocean Protocol to allow Cypher builders to leverage Oceanās data tokenization & marketplace tech
LayerZero reallocated unclaimed $ZRO to a new airdrop
Pendle has released the SolvBTC.BBN (Corn) pool, which enables farming Corn, Solv Protocol, & Babylon airdrops at once. Liquidity providers are currently earning 27% APY on their BTC
Jupiter announced Perps V2 and Jupiter Mobile app. Jupiter Mobile aims to offer a frictionless and intuitive user experience for mobile users
Celestia raised $100M in a new fundraising round
pSTAKE Finance has integrated Leather to enable its users to access BTC yields
Sky (formerly MakerDAO) is considering to expand to Solana
Phantom introduces embedded wallets, which will enable seedless sign-in
Drift Protocol announced a $25M Series B funding round
Eigenpie released its token EGP and the claiming portal for its airdrop
Rumpel, a protocol that enables turning points into profit, has launched
Thatās all for this week!
Until next time,
The DeFi Investor
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