0xKyle's Weekly Market Updates #12
don't. screw. this. up. 17 - 23 April, 2023.
DISCLAIMER: The information contained in this newsletter is for informational purposes only and should not be considered financial or investment advice. Any opinions expressed in this newsletter are solely mine.
Welcome to Week 12 of my narrative newsletter! It’s sadly finals week right now, so sorry about the delayed push out.
Executive Summary
What’s better than being right? Being right AND executing it perfectly.
IMO it’s much better to wait for confirmation than to long in expectancy of a breakout in such scenarios, because the expected probability of it breaking such a strong resistance is incredibly high that it almost always makes the trade not worth to take (until it is).
How I play it is simple. Breakout, I immediately long alts because of the upside and EV that exists on such cases. Remember, be like water. The market does not CARE about your past biases, your emotions, your “oh but we were just bearish at 28k now we’re at 30k and everyone’s bullish hurr durr”.
Look at how alts are reacting; and how sustained pumps are. Look at discords and measure the sentiment of people; are they tired? Or are they invigorated? Look at the next level to clear on HTF. PLAY IT LEVEL BY LEVEL.
Anyways, we’re looking really good on the HTF, and I expect us to break 35,000 / 2500 in the coming days. Meme coins are pumping as well, with $PEPE and $WOJAK and what not - a good sign of a healthy bull.
Market Narratives
A and B
Arbitrum and Blur are the two new shiny tokens you shouldn’t fade. I expect to take profit on ARB near the $2 mark - but until then, it’s a screaming “buy every dip”. Blur will follow shortly - while I don’t know whether it’ll follow ARB to break ATHs, I do expect it to break $1 at least.
China and AI
It’s in cases like this that you have to remember what the largest narratives are - and how little of a push it’ll take for them to resurface. China coins and AI coins are the longest-standing ones and all it’ll take is one narrative threador to start tweeting about em seriously. CFXBTC also looks incredibly good, at range lows.
Level Finance, and Small Cap Projects
Level Finance has been one of those tokens you set and forget tbh. At such low TVL, they’re still one of the top revenue-generating projects - while you can argue that it’s because of reward incentives, I highly doubt that every project can achieve its level of success even if they had reward incentives.
JOE and RDNT have been doing spectacularly well as tokens with the largest mindshare on the Arbitrum ecosystem. They seem well positioned for short to mid-term trades, but betting big on them? I’d rather choose the shiny new coins, thanks.
Otherwise, I’m always on the hunt for small caps. Nothing else has really caught my eye or given me the electricity I felt back in the day. I do know that I’m missing quite a few - from Kava, to Kwenta, to Oath, to Pls, to Thena ; but none of them seem interesting enough for me to bet with conviction.
INJ
I expect INJ to break 10 - with an ecosystem fund larger than its mcap, it has become CT’s number 1 “hated rally” coin. Despite the fact that the last time it broke $10 was in 2021 when we had an actual bull market, I think that we can’t rule things out - on a technical perspective, I think we settle near the demand zone of ~8.22 before trying for another leg up
SOL, DYDX
These two coins belong in the same category in my mind because they both share similar traits - as coins I have a love-hate relation with. But this is just a me problem. I expect Solana to at some point in this cycle, catch up with Ethereum’s performance and finally break $30 - and for dYdX to maybe drop v4 and see it break past the range highs of 3.171.
Concluding Thoughts
On a HTF level, I expect this rally to sustain. We may chop around and have many fake outs, but at every level I expect it to be a “buy the dip” scenario. But make no mistake - this is an echo bubble. My targets for BTC/ETH are 35k/2500, but human emotions are like pendulum swings - they spike at the ends. As such, I’m hoping to be wrong and for my targets to be absolutely blown out of the water - when that comes, I’ll start selling.
Other than that, my strategy (so far) has to be “buy the outperforming coins”. Remember - liquidity is limited. A rising tide lifts all boats, but in this case, it lifts some boats more than others. In the 2021 bull, every alt would just go up tremendously. In this echo bubble of ours, it’s much more EV to buy the alts that go up the most, because liquidity will be concentrated there.
There’s tiers to the coins I’ve mentioned - tier 1 obviously being ARB and Blur, as the new shiny things on the block. And on the small cap / shitcoin side, I can’t give any recommendations on what to buy - but in my eyes, small caps aren’t as profitable as shit coins right now, probably because we don’t have the right set of participants to invest heavily in small cap projects.
No, what we have are a bunch of degenerates that just want to get rich quick - and shitcoins are fast, replicable and highly profitable (if you don’t get rugged). I expect small undervalued projects to continue underperforming - and as such, my strategy is trading / shitcoining 80-20%.