LOCK IN... ATHs Incoming

GM Anon!

Last week's Friday edition titled "A Year In A Week" might have been more apt for this week's issue! The meme below perfectly encapsulates this week's events. Trump appears to have this in the bag, barring any black swan events. 

The crypto community generally views Trump as the more pro-crypto candidate. However, some, like Arthur Hayes, believe he might backtrack on his promises to the crypto community. Time will tell, but crypto often rides on the momentum of optimism. In the meantime, it’s likely we’ll hit new all-time highs as significant metrics have started flipping positive. Let’s break it down.

Bitcoin On The Move

One of the key drivers that can send risk-on assets like crypto to the moon is ticking up again. Increased liquidity usually leads to higher asset prices. If Global Monetary Liquidity (GML) continues to rise, especially towards the 4% YoY change mark, we could see significant bullish momentum across various markets, including crypto.

More liquidity means more funds available for investing in riskier assets like crypto. As traditional markets benefit from this increased liquidity, some of that capital often flows into the crypto market, driving up prices.

And now the Bitcoin chart

Bitcoin reacted very positively to the attempted assassination of Trump, as the survival of the more pro-crypto candidate bolstered market sentiment. The iconic photos of Trump after the incident had a significant positive impact on his public image. Additionally, it's worth noting that several millionaires were made from Trump-themed memecoins that launched, such as Ear and Fight.

Let's first break down the major metrics that have started flipping positive. Bitcoin, often seen as the tide that raises all boats, is showing the beginnings of what could be considered bullish signals as its key metrics turn positive.

Firstly, sentiment has flipped back to greed. This is a strong short-term indicator that reflects traders' current views on the market. When sentiment shifts to greed, it typically indicates increased buying pressure and optimism, suggesting a bullish outlook for Bitcoin and the broader crypto market.

An interesting indicator to see how early one is in the trend when viewing crypto is Google Trends. We can see that the popularity of crypto has barely turned up, signifying that those currently allocating or who have allocated in the last few weeks are extremely early for the next run-up. 

This is why retail investors are often left holding the bags; when they should be paying attention, they’re not, and by the time they do, it’s too late.

The "Term Holder Net Position Change - 30D Sum" chart shows that long-term Bitcoin holders are starting to accumulate BTC again after a period of significant distribution. This change indicates a shift in market sentiment towards a more bullish outlook.

• When long-term holders start accumulating Bitcoin, it signals their confidence in future price increases. 

• This behavior often precedes significant price rallies as these holders are typically more informed and strategic in their investments.

• Historically, periods of accumulation by long-term holders have been followed by substantial price increases, suggesting that the current accumulation phase could precede new all-time highs for Bitcoin.

While these crypto OGs have started accumulating, sentiment data indicates that retail has yet to fully join the party. Again, this is why they often get rekt. For the OGs in this game, there are no days off or periods of checking out of crypto—they’re always LOCKED IN! There’s a lesson in that, anon.

Two other crucial metrics which are worth noting include the Short-Term Holder MVRV indicator which has flipped positive, meaning short-term holders are now in profit, signaling increased confidence among investors.

Similarly, the SOPR turning positive indicates that coins being sold are generating profits, aligning with a bullish market sentiment. These trends suggest a healthier market outlook with reduced selling pressure, supporting potential continued upward movement in Bitcoin's price.

We’re not completely out of the woods yet, as quite a number of indicators are still neutral or even negative, but this is likely the beginning of a new trend.

Lastly any FUD surrounding the Mt Gox sale, is more FUD than anything based on solid metrics, Ki Young Ju of Cryptoquant recently shared this interesting graphic.

In summary, the titan is on the move again after a long period of chop. It's time to get ready for the next major leg up if momentum continues as it is.

Other Coin Movements

Let’s take a look at some of the biggest winners this week and then break it down.

Majors this week such as XRP saw a roughly 60% surge this week while WLD also saw a similar run up. Other notable mentions include 

• TAO (37%)

• UP (32%)

• AR (38%)

Love them or hate them, memecoins have captured the spotlight in the crypto world. Why do traders love them? One key reason is that organic memecoins typically don't have venture capital backing, which means no token unlocks or massive dumps on traders. 

This cycle might see memes being viewed as bluechip coins due to their ability to capture cultural movements and phenomena. If this doesn't make sense to you yet, it might be time to get familiar with this side of the market—memecoins aren't going anywhere.

Over the last seven days, cat tokens have been heating up with new ATHs being set. Michi is up 118% and Popcat is up 70%, with many speculating that Binance listings for these coins are imminent. Could we see Popcat crack a market cap of $1B soon? Which is currently at $770M.

Popcat also flipped the cat darling of Ethereum, Mog, to become the largest cat coin by market cap.

Other memes, such as Ponke and WIF, saw gains of 64% and 54%, respectively. The new smart money favorite, Lockin, also posted impressive gains of 61%. 

Other coins that saw notable movements around the 20% range include 

• GIGA

• Retardio

• Billy

• Harambe

• The bluechip meme token PEPE saw an increase of 36%.

• Additionally, noteworthy smart money accumulations were also seen in WIF and Aura on Solana this week.

Ethereum coins that saw smart money accumulations include:

• Miggles

• Banana

• Mog

• Telang

• SWAG

All saw a notable increase in holders, but overall the majority of action has remained on Solana. Interestingly, Trump-themed tokens have seen a sell-off despite recent events. Maybe the Trump alpha is now on Solana? It will be curious to see how this plays out leading up to the elections.

China Hopium

Amid fresh reports suggesting that China might lift its long-standing ban on Bitcoin, the crypto community remains largely skeptical. Galaxy Digital CEO Mike Novogratz recently shared on social media that he's heard rumors of China potentially "unbanning" Bitcoin by late 2024. 

• While this has stirred excitement, most responses have questioned the validity of these claims, pointing out China's history of repeatedly "banning" and regulating Bitcoin without significant long-term impact.

• If China were to truly lift its ban, it could have massive implications for the global crypto market, potentially driving significant investment and adoption. However, given China's stringent control over financial activities and its previous stance on crypto, many believe such a U-turn is unlikely. 

The potential for increased liquidity and market growth is tantalizing, but as of now, it remains speculative. Until more concrete evidence emerges, the community remains cautiously optimistic, aware that this could just be another fleeting rumor.

ETF Developments & Closing Off

The introduction of a Bitcoin spot ETF had a profound impact on the price of Bitcoin, and a similar outcome could be expected for Ethereum with the launch of its spot ETF on July 23rd. After the Bitcoin spot ETF began trading, Bitcoin's price surged by approximately 40% within the first month, reaching an all-time high of around $67K. 

This significant price increase was driven by a surge in demand as institutional investors, who previously hesitated due to regulatory concerns, found a regulated and accessible way to invest in Bitcoin. The increased buying pressure from these large investors played a crucial role in pushing Bitcoin's price to new heights.

Applying this scenario to Ethereum, the imminent launch of the Ethereum spot ETF could lead to a substantial inflow of institutional capital, driving up the price similarly to Bitcoin's experience. The ETF would provide a secure and regulated investment vehicle for institutions, potentially leading to increased market liquidity and depth. 

Historically, greater liquidity and market depth have contributed to reduced volatility and increased price stability. If Ethereum's market responds similarly, the trading of an Ethereum spot ETF could result in a more stable and mature market, fostering greater investor confidence and attracting even more capital into the Ethereum ecosystem, ultimately supporting its long-term growth and adoption.

That wraps up today's insights! We hope you enjoyed today’s issue! Till next time anon.