What We See in the Markets: Analyzing Recent Crypto Market Trends

BTC has calmed down over the course of the past week, essentially unchanged on only 40% realized vol, down significantly from previous weeks. BTC holding near its highs is a strong sign, as we would expect some retracement after a one-month, 40% rally. There’s a typical pattern that we see in sharp rallies: BTC rallies and then calms down, ETH rallies and then calms down, blue-chip alts rally and then calm down… and then weaker coins see a rally. If we get to the end of that cycle, it usually means that the rally has run out of energy, and the next step is a BTC downtick. However, if at any point during the cycle, the energy flows up (for example, if the alts rally triggers real money flowing again into BTC), things kick back up and the cycle can resume. We saw a somewhat worrisome uptick in some longer-tail and meme coins at the end of last week, which suggested that the rally might have trouble continuing. This morning, however, the market has gotten some energy from the surprise win in Argentina’s Presidential runoff of Javier Milei over Sergio Massa. Milei has called for the dollarization of Argentina’s economy, and is known as a pro-Bitcoin candidate, and BTC has rallied about 3% on the headline. Given that most of the world is still either asleep or enjoying their Sunday, and given that BTC is just a hair under its one-year high, we could see this headline restarting the past month’s bull cycle. https://www.bloomberg.com/news/articles/2023-11-19/argentina-presidential-election-milei-beats-massa-in-runoff

Last week was Singapore Fintech Festival, and it seemed carry more energy than in past years. Some of this was likely due to the market’s rally, some of it due to the recent record attendance of Token2049 in the same city, but a lot of it was due to real headlines coming out. Avalanche in particular rolled out multiple headlines, with both JP Morgan and Citi building tokenization on top of Avalanche’s subnets. AVAX has been the market’s top performer over the past three weeks, up 102% without losing any energy on a retrace. Axelar is a key piece of the build as well, and WAXL is about 40% in the past week; LayerZero is also involved, though does not have a token at this time.

Also in Singapore, the MAS gave in-principal approval to StraitsX for its SGD stablecoin, xSGD. StraitsX has already developed partnerships with Grab (Singapore’s ride-sharing / grocery / payments app), And, and Amazon, so this represents a pretty significant step forward into bringing stablecoins closer to the mainstream. https://www.techinasia.com/straitsx-obtains-mas-license-issue-denominated-stablecoins

YFI has seen notable volatility over the past week. After its V3 was announced, it rallied 130% in about ten days; most of that gain was erased over the weekend, as some large holders were spotted onchain selling positions. A large part of the volume went through at DYDX, and gaps in liquidations have resulted in $9.5m being used from DYDX’s insurance fund, and the DYDX CEO called the YFI price action a targeted attack on DYDX. The fund still holds $13.5m; interestingly enough, there has been very little price impact on the DYDX token. https://twitter.com/AntonioMJuliano/status/1725926693440045389