Market Insight: Decoupling
Crypto markets continue to chug along while the stock market struggles. The S&P 500 is down -5.06% since hitting new highs on Nov 22nd. Stocks have been hit hard with news of monetary policy change and Omnicron, the newest Covid variant. A 5% decrease in stocks is considered a significant drop. Volume is increasing significantly during the selloff which adds to the intensity of the drop. The volatility index (VIX) is up to 31.13 in a 9-month high.
In the same period TOTAL (Total crypto market) has remained flat. Some major Altcoins have been strong in the past week. (LUNA +50%, ALGO +5.6, ETH +5.4%, MATIC +12.6%).
Breaking from historic fashion, the crypto market is continuing to show strength despite stock market lulls. It may be too early to talk about decoupling of the stock market and crypto, but the past week has added a lot of promise to the proposition. There is growing evidence that some investors are seeking alternate investment vehicles due to stock market fears and other markets such as real estate are reaching extreme valuations. It’s early but the signs are promising. If more investors start entering the space, prices and volatility could increase quickly. Below is the SPY vs TOTAL chart (total crypto market), which will be an interesting chart to keep an eye on for the upcoming weeks. The downtrend on this chart began in Mar 2020, showing crypto as a better investment since that point. A break in this trend could help signal when a crypto bull market is over.
Market Update
- · Bitcoin (BTC) continues to fluctuate between the 59k resistance and a well-tested trendline that currently sits around the 56k area. BTC currently at 56.8k
- · Ethereum (ETH) is showing signs of being oversold on the daily charts after a 15% run-up in 5 days. A lot of news has been coming out of ETH recently and volume seems to be increasing. ETH has high potential of reaching new highs if the strong market continues. Expect a possible retest of the trendline at 4.2k in the short term
- · Solana (SOL) is up 27% since Friday and is testing the $220 resistance. Stochastics is in the oversold area on the 4H charts. Just like ETH, a retest of the trendline could be in its short-term future
- · Total Market Cap (TOTAL) is down -.69% to $2.56T. TOTAL has tested 2.63T three times in the past three weeks.
- · TOTAL3 (TOTAL – ETH/BTC) is flat today showing more funds are moving into altcoins vs BTC
- · Elrond (EGLD) is showing a strong breakout of a downtrend on the 4H charts but the stochastic is reaching oversold area. EGLD has gone down 31% since Nov 22nd after a large runup due to the release of the Maiar Exchange. This could create an entry opportunity.
- · Notable Gainers/Losers from watchlist:
- o LUNA +7.4%
- o SOL +6.6%
- o ALGO +6.1%
- o QRDO +8%
- o AIOZ +8%
- o RADIX -9%
- o RNDR -10%
- o ILL -7%
- o IMX -10%
Major Market News
· Ethereum devs are calling on the community for help in testing the merge to Ethereum 2.0. The program is seeking individuals in all skill ranges. Click here for my info on participation. The merge is slated for completion by Q2 2022.
· Crypto.com (CRO) is acquiring two US-Based derivatives platforms for $216M. Expect CRO to begin trading futures and derivatives in the coming months. Bullish news for CRO
· Fidelity Canada is launching a spot Bitcoin ETF.
· 1Inch network has completed a $175M Series Boffering to increase liquidity and increase protocol utility. Big names include VanEck, Fenbushi Capital, Alameda Researchm Celsius and Gemini Frontier. 1Inch, a decentralized exchange aggregator, had recently reached $85 billion in trade volume. This is a large sum of funding. Keep a close eye on 1INCH price and expect liquidity provider rewards to increase in the coming weeks.
· Certik (CTK) a crypto security auditing firm, raises $80M nearing CTK to a $1 billion valuation. CTK is up 38% on the news.
· South Korean venture firm Hashed has created a $200 million fund to invest into Web3 startups that focus on metaverse, gaming, NFTs and Defi. Add them on Twitter to get an idea where these funds end up.
· FTX.US (FTT) is adding support for Ethereum-based NFTs on their platform. It’s the first NFT exchange to offer both Solana and FTX NFTs.
Notable Events
- · Coin Bureau releases a video on Crypto Stocks
- · Astar Network has won a Parachain on Polkadot
- · Crypto.com (CRO) will begin a 70 million token burn today
- · Kash on Terra, will open swaps from ETH, USDT to UST
NOOBIES: Dr. Gavin Wood
Dr. Gavin James Wood is a British computer engineer and the co-founder of Ethereum alongside Vitalik Buterin. He laid the first stone in smart contracts through the creation of Solidity, which to this day, is the most widely used language in crypto. He described Ethereum as “one computer for the entire planet.” It was rumored he engineered Ethereum in a matter of weeks.
His recent work in crypto includes the creation of Polkadot and founding the Web3 Foundation. Polkadot, which has recently gone live, is described as an interconnected internet of blockchains which will facilitate the exchange of information in a trustless manner. Wood designed Polkadot after seeing the flaws in Ethereum. This past report goes deeper into Polkadot.
Web3 was created to redefine the structure between blockchain and the web. It aims to work towards decentralizing web architecture and returning the internet back to the users. Grants are awarded to projects that facilitate the grounds to a decentralized web through the Web3 foundation. Web3 foundation with the aid of Polkadot is positioned to bring on a new future with the integration of blockchain technology and the web.
Wood remains of the most influential personas in crypto and one that I recommend our community follows. If you would like to learn more about Dr. Wood, check out his self-written Zoolander-like webpage. After a good laugh, check out his some of his insightful speeches on Youtube.
I want to remind everyone that I am not here to shill any coins or projects. I wish they paid me good money to shill legit projects but that is not the case. I am going to have preferences but this in no way means these projects will outperform others, I merely mention them to bring them to your attention in hopes that you do deeper research.
Don’t forget to share what you find and help add value to our community.
Thanks for reading Fam!
TraderGabi
Follow me on Twitter and Medium under the same name!
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