Crypto Market on Edge

GM anon!

Crazy how fast things change, right? Just last week, the market felt like it was stuck in a rut, with traders feeling the pullback blues and skepticism creeping in. But here we are, and the sentiment has flipped on its head! Bitcoin’s bounced back over $58k, and even the macro scene is looking brighter with inflation cooling off a bit.

It’s like we’ve all been reminded that in crypto, a week can change everything. Optimism is creeping back in, and it feels like the market’s got its swagger back. Let’s dive in!

TLDR 

• Trump’s World Liberty Financial crypto project launches September 16, with predictions that a Trump victory could push Bitcoin to $80-90k

• The September CPI report shows a 2.5% annual inflation rate, helping boost Bitcoin by 3%, pushing it over $58k

• Analysts expect a 25 basis point rate cut, increasing confidence in riskier assets like crypto as inflation shows signs of easing

• A new bill proposes a joint SEC-CFTC committee to shape US crypto regulations, while eToro US halts most crypto trading after an SEC settlement

• SUI led top performers this week with a 27.3% surge, driven by the launch of the Grayscale SUI Trust and a boost in TVL

• Meme tokens like BULL (121%) and NEIRO (67.8%) posted significant gains, as activity in the meme market recovered from August lows

Week In Review 

Next week marks an important moment for the crypto market as Donald Trump is set to launch his World Liberty Financial crypto project on September 16. Furthermore, experts like Bernstein, predict that a Trump presidential win could push Bitcoin to $80-90k, while a Kamala Harris victory would lower it to $30-40k. Currently, Polymarket data suggests a close race between Trump and Harris, with Trump leading in swing states, while Harris’ betting odds surged after a debate performance that, notably, avoided any mention of crypto.

On the macro front, the September CPI report showed a 2.5% annual inflation rate, slightly below the anticipated 2.6%, while core inflation (excluding food and energy costs) saw a 0.3% month-over-month rise. This modest cooling of inflation has positively impacted markets, including crypto. Bitcoin surged by 3%, crossing the $58K mark, as investors now expect the Fed might consider reducing interest rates in upcoming meetings.

With inflation showing signs of easing, the likelihood of a 25 basis point rate cut has increased, and some analysts believe the Fed could continue cutting rates later in the year. This is boosting confidence in the crypto market, as lower interest rates generally make riskier assets, like crypto, more appealing to investors.

In the legislative space, a new bill proposes the creation of a joint SEC-CFTC committee aimed at structuring US crypto regulations, reflecting the ongoing effort to clarify the rules governing digital assets. Meanwhile, eToro US will cease nearly all crypto trading following a settlement with the SEC, further highlighting the regulatory pressures facing the industry. Kraken, embroiled in its own SEC lawsuit, seeks a jury trial and has begun presenting its defense. Internationally, India continues to tighten its grip on the crypto sector, aiming to recover $345 million in unpaid taxes from offshore exchanges like Kraken and Huobi. 

In corporate news, Block Inc. has surpassed Coinbase in market capitalization, as Barclays revised its price target, adding to the growing competition among crypto platforms. Meanwhile, Tether made an unconventional move by investing $100M in an agriculture firm, signaling diversification amidst rising stablecoin competition. Lastly, the crypto world is closely watching Caroline Ellison, the former CEO of Alameda Research, who is set to face sentencing on September 24 in connection to the FTX fallout. 

Major Coins

Over the past week, BTC saw a modest increase of 2.2%, while ETH declined by 1.7%, and SOL dropped by 1.1%. Despite these mixed results, other areas of the market experienced surprising gains, catching many users off guard. This comes amid broader market conditions and ongoing investor scepticism following last week’s pullback, which had dented overall confidence.

The top performers over the last week have been mostly L1s and AI-related tokens. Leading the way is SUI, which surged 27.3%, driven by the launch of the Grayscale SUI Trust and resulted in a substantial increase in TVL. FTM also posted strong gains of 22.7%, boosted by strategic updates and the launch of a high-performance testnet for the Sonic upgrade. 

Meanwhile, FET saw a 24.8% rise, as increased interest in AI technologies continues to fuel its growth and other AI related tokens. Other noteworthy developments include TON (15.2%) bouncing back after its recent decline, and the renewed interest in ICP (16.2%).

• SUI (27.3%)

• FET (24.8%)

• FTM (22.7%)

• QNT (18.8%)

• APE (17.9%)

• OM (18.5%)

• ICP (16.2%)

• TAO (16.0%)

• TON (15.2%)

• STX (13.5%)

• OP (13.0%)

• AAVE (12.7%)

• KAS (11.3%)

• JASMY (10.8%)

• INJ (10.5%)

• NEAR (8.6%)

• SEI (8.5%)

• AVAX (8.4%)

• ALGO (8.0%)

• BCH (7.9%0

• BTT (7.9%()

• BNB (7.6%)

• ADA (7.6%)

• RENDER (7.4%)

• UNI (7.2%)

• RUNE (7.1%)

• GT (6.7%)

• EOS (6.6%)

• THETA (6.6%)

Memes

The trading volume of the top bots appears to be recovering after the August lows, but it remains well below the peaks seen in May and July. Despite this, there is still considerable activity in the meme market, with many tokens experiencing substantial gains.

The meme market has seen some impressive gains over the last week, with BULL leading the pack, surging by a remarkable 121.0%. Other strong performers include NEIRO (+67.8%), KOIN (+64.8%), and POX (+53.8%). Tokens like WZRD (+52.9%), BILLY (+52.5%), and CAT (+48.4%) have also posted solid returns. While smaller cap tokens such as MUNCAT (+43.9%) and KENDU (+43.6%) also saw double digit increases.

• BULL (121.0%)

• NEIRO (67.8%)

• KOIN (64.8%)

• POX (53.8%)

• WZRD (52.9%0

• BILLY (52.5%)

• CAT (48.4%)

• SUNDOG (45.8%)

• WOLF (45.0%)

• MUNCAT (43.9%)

• KENDU (43.6%)

• KOKO (41.1%)

• GME (41.0%)

• FWOG (39.1%)

• BOBO (34.1%)

• MIGGLES (29.4%)

• MOG (29.2%)

• BRETT (12.3%)

• MOG (17.6%)

Smart Money Accumulation

In the Ethereum ecosystem, over the past week smart money has shown significant accumulation in CAT (+351.98%), NEIRO (+29.55%), and WOLF (+8.5%). A notable newcomer, CATE, has quickly climbed the ranks in the last few days. Meanwhile, the hype around VISTA appears to have faded. There has also been a sharp sell-off in HUSBY, with positions down by 25.89%.

The Solana ecosystem saw notable accumulations in MICHI (+5.18%), POPCAT (+10.03%), BILLY (+2.49%), FWOG (+14.39%), MUMU (+11.28%), and AURA (+16.75%). On the other hand, SCF experienced a significant sell-off, with positions declining by 22.32%.

A newly released feature on ChainEDGE measures the mindshare a token holds in the market. PNDC, SCF, CATE, and FWOG have recently dominated this metric. While high mindshare typically correlates with positive price appreciation, in the case of SCF, it led to smart money taking profits.

Data Points

SUI Surge

SUI has outperformed the crypto market with a 27% weekly gain, becoming the top gainer among the 100 largest cryptos.

• This surge is largely due to the launch of the Grayscale SUI Trust, which has attracted institutional investors and increased demand for the token.

• SUI's TVL has surged to over $714M, driven by key protocols such as Cetus, Navi Protocol, Scallop Lend, DeepBook, and FlowX Finance.

Stable Flows

A sharp increase in stablecoin balances in early August suggests investors were positioning for potential market moves.

• The marked drop in stablecoin balances in September could imply that investors are taking profits or withdrawing funds in response to market volatility or uncertainty.

• The fluctuations in stablecoin flows highlight changing liquidity in the market, with periods of high accumulation potentially fueling trading activity, while declining balances suggest reduced buying power or a cautious market approach.

Coupled with the volatility seen in stablecoin flows, the declining balance of ETH on exchanges, mainly through July and August, suggests that ETH is being withdrawn from exchanges at a significant rate. This could imply that investors are moving ETH to cold storage or DeFi platforms, reducing sell pressure and potentially signalling a bullish turnaround for ETH going into the end of the year.

BTC OGs Accumulating

Long-term BTC holders are known for weathering market volatility and timing their moves strategically.

• Pre-Halving Activity: Historically, many long-term holders sell before a BTC halving, locking in profits during periods of high liquidity​.

• Accumulation Resumes: As global liquidity increases, long-term holders are back to accumulating, positioning themselves for potential price surges going into Q4.

That’s all for today! Hope you found this issue insightful. Catch you next time, anon!