Pudgy Penguins Fly High While BTC and ETH Take a Dive 🐧💸

It’s been a rough week, hasn’t it?

Yeah.. it hasn’t been pretty, has it? This past Friday, we shared some of the reasons why the market is dumping, mainly:

• German government dumping their bags

• Mt Gox repayments.

So, how has it affected the markets? Let’s take a closer look.

Market Movements

Bitcoin (BTC)

After four relentless bearish days, BTC finally caught a breather on July 6, finding much-needed support at the lower Bollinger Band. It was a tough stretch, with the bears flipping the 200-day SMA from a trusty support to a pesky resistance, causing the price to nosedive from $62.9k to $53k, before a recovery to $57k.

But hey, there's a silver lining! There's a solid support zone around $56k, where about 797.5k addresses snagged up a hefty 55.31k bitcoins. It's the last bastion for the bulls, and they better hold it tight!

However, IntoTheBlock’s address indicator also shows that the number of new addresses entering BTC has been steadily declining since September 2023. 

Fewer new folks interested in BTC? Not the greatest news.

Ethereum (ETH)

Ethereum had a bit of a rough patch, facing resistance at the 20-day SMA and tumbling from $3,450 to $2,970. It crashed through the 200-day SMA and slipped past the $3,000 psychological level, with the relative strength index (RSI) nosediving into the oversold zone.

However, the buyers gained momentum and pushed the price back above the $3,000 psychological level. Currently, the immediate resistance is at the 200-day SMA.

ETH fell as low as $2,800 before the buyers took over and pushed the price up. Currently, the bulls have a strong support cushion at around $2,900.

As per IntoTheBlock, a staggering 2.82M addresses had purchased 1.71M ETH here. That's a lot of ETH in some strong hands!

MultiversX (EGLD)

MultiversX (EGLD) has been a star performer this week, soaring by 21.3%.

Let’s take a look at the charts. Bouncing off the $28 support line, EGLD is currently sitting pretty at $34.60, flipping the 200-day SMA from resistance to support.

The moving average convergence/divergence (MACD) indicates growing bullish momentum, so brace yourselves for more upward action. A key driver behind this bullish run is MultiversX’s integration with SafePal, a crypto wallet boasting over 13 million users. Daniel Serb, head of business development at MultiversX, highlighted that this integration offers three layers of value exchange using EGLD and enhances mobile access for users. 🚀

Correlation Between Global M2 Money Supply and Crypto

Messari dropped a very interesting report about the correlation between M2 and cryptocurrency markets.

What’s M2? M2 is a type of money supply that includes M1 (cash outside banks and checking account deposits) plus savings accounts, money market accounts, retail mutual funds, and time deposits under $100k.

Historically, the global M2 money supply, which covers cash in circulation, deposit currency, time deposits, and household savings, has been a solid predictor for crypto markets. The year-on-year change in Global M2 usually predicts the same change in the total crypto market cap. We saw this trend during the 2017 and 2021 bull runs.

The link here is that M2 measures global liquidity. When liquidity is up, both big-time and small-time investors have extra cash to throw around, letting them take more risks and jump into assets like crypto. More liquidity means more investment into crypto, pumping up market caps.

But recently, this trend’s gone a bit haywire. Since October 2023, the year-on-year change in Global M2 has been dipping, but crypto’s still climbing. This discrepancy is likely because of all the hype around ETFs in the crypto space, which is driving up interest and activity even though overall liquidity is down.

Looking ahead, we gotta see if this break from the norm can stick or if crypto’s just jumping the gun, expecting new money without the global liquidity backing it up. This will tell us if current crypto prices make sense or if they’re banking too much on new capital coming in without the actual liquidity to support it.

The Pudgy Penguins Are Learning To Fly

The NFT scene is getting wild again. After months of crazy floor price swings and liquidity headaches, Pudgy Penguins just flipped the script, jumping nearly 400% in trading sales volume today.

Launched in July 2021 by some college kids and now run by Lucas Netz, these 8,888 penguins on the Ethereum blockchain have seen a meteoric rise.

They even passed the Bored Ape Yacht Club’s floor price last week. One Pudgy Penguin is now worth 1.22 Bored Apes. The penguins are dominating the market like never before.

In fact, even tradifi giants like VanEck are also getting in on the action. 

Have Pudgy Penguins taken over the NFT throne? Let us know what you think.

Anyway, that’s it for today folks!

We will be back this Friday.

Till then, hold on to your bags!