0xKyle's Market Color #30
The one-day bear market of 2024
GM everyone! Sorry for missing a week… last weekend I went to DC for a day trip. I liked the Lincoln Memorial - the whole time I was there, I kept thinking about that one scene from Transformers where Megatron sat in the chair LMAO. Anyways, have a good week ahead!
Executive Summary 📝
This past week we saw people talk about how this cycle was over, how the VC/ high FDV scams were not pumping, and literal talks about how crypto was doomed as an industry. I posted a response that went semi-viral, you can read it here
These have been my thoughts on the general 2024 cycle for a while. Cycle-long holds seem to be an extremely -EV way to play the game; just a few months ago, the “cycle long hold” of 2024 were UNIBOT and ROLLBIT. Then it was TAO and PRIME.
As for the markets themselves, we had a one day bear market where price went down to 57k and then today we find ourselves at 64k! Truly incredible lmfao. I wrote this tweet a week ago, that when visited in hindsight, looks amazing.
But anyways, some thoughts on the general market - at first, I thought that this would be a relief rally with no continuation, but the signs to flip bullish are there:
Emotional sentiment bottom
Prices going incredibly high with low funding / very healthy market uptrend
ETFs are actually buying again! Positive Grayscale inflow day. The -500m outflow day (first day of outflows for IBIT) marked the bottom ; and something has to be said about how at 72k, 1 billion in inflows couldn’t push past it; at 57k, 500m of outflows couldn’t knock it lower
Macro fears are allayed - the move lower could have been said to be caused by the market’s overly bearish pricing of a rate hike - and in FOMC minutes this week, Powell clearly re-iterated that hikes were off the table ; which prompted a rally of risk assets
Deviation of the 60k range breakdown - BTC on technicals look extremely good
The case for being bullish does seem to be extremely enticing. Now is the case for being bearish:
ETF flows will have to be monitored closely; one day of positive inflows doesn’t mean anything
The move getting resolved in one day is kindaaa sus. this is a shitty argument, but I can understad where it comes from - people were expecting some chopsolidation and then we go higher but it was just an impulse straight to 64k
The case for being bearish does seem (to me) to be way weaker than being bullish. Of course, when the trend first shifts, you should be risk-on all the way and then protect capital as time goes by - as such, I myself am positioned max long… but with the caution in mind to cut if things go south.
I expect 65k to act as a major level of resistance - and it’ll be a good point to buy alts on a slow down. But if we break right through it… then I think a bull market on par with Jan / Feb will be ripe for the taking.
Market Narratives 🎙️
Everything’s up. What did you expect?
Eigenlayer
While Eigen’s whitepaper being released on Github stirred much unhappiness in the community regarding its tokenomics, it could see a revival of the ETHBTC narrative especially with how ETH ETF is expected to either be approved (or denied) in May.
CEX Coins: ETH / LSDs / ENA / OP
SocialFi
Friendtech’s horrendous airdrop caused quite the show on CT the past few days, but perhaps the underlying current no one is talking about is how Social Fi may be the narrative of the future. Why?
Well, my logic is simple - memes are what makes this cycle, and memes are basically powered by community/socials - making socialfi meme beta in a way. I believe that TON is an excellent bet because of this, and I look to build a position in it.
CEX Coins: TON / KLAY
On-chain: FRIEND / DEGEN
AI
Apple’s WWDC, alongside expectations of GPT-5 in the summer, is creating quite a buzz in the AI community. AI tokens are experiencing outperformance because of this
CEX Coins: RNDR / NEAR / TAO / WLD / AR
On-chain: No idea what’s good these days for AI on-chain… many of them (or maybe all of em) are vaporware projects
Memes
Of course, memes take the crown for being the best performer on this rally upwards.
CEX: WIF / PEPE
On-chain: POPCAT / SHARKCAT / Boden / so many I don’t even know…
I’m eager to see if this time brings anything different, but I doubt it - it’s probably more of the same. That’s all from me this week; I do hope that this rally is sustained, but we’ll see. It’ll be pretty amazing if we got back to 72k, though I doubt that we achieve that this week. My base case would be a sustained alt rally as we range between 60k - 65k, and then maybe given a few weeks we can break 65k and target 72k.
TLDR; bullish, higher for longer (hopefully!)
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