Slow Grind Up To Valhalla

GM Anon!

If there’s one word to describe the current state of the crypto market, it’s frustration—deep, unrelenting frustration. After the Jackson Hole meeting last week, there was a sense that things were on the brink of a significant breakout. However, the market has simply returned to where it was, with considerable volatility around the $60K mark.

Compounding this frustration, we witnessed major incidents like the hacking of the Polygon Discord, the arrest of Telegram founder and CEO Pavel Durov, and the SEC issuing a Wells Notice to OpenSea. This wasn't the action or direction many were expecting to see going into this past week.

TLDR

• Despite expectations of a breakout following the Jackson Hole meeting, the market remains volatile around the $60K mark with no clear direction.

•  Starting September 1st, Russia will use stablecoins for international trade to bypass Western sanctions, marking a major geopolitical shift in crypto adoption.

• Key projects like Fantom and Maker are rebranding to Sonic Labs and Sky, respectively, to enhance blockchain capabilities and expand DeFi access.

• Tron memecoins continue gaining traction, while activity on Solana and Ethereum remains subdued, with selective interest from smart money investors.

• Decline in ETH's market dominance and lower BTC exchange holdings indicate potential bullish setups, as investors prepare for possible market surges.

Moving Chess Pieces: Bullish Checkmate

When uncertain about the market's direction, observe the actions and strategies of major industry players and actors.

One notable development that flew under the radar this past week is Russia's decision to start using crypto, specifically stablecoins, for international trade beginning September 1st. This move, aimed at circumventing Western sanctions, was authorized by legislation signed by President Putin and will be overseen by the Central Bank of Russia. The transition will involve Russia's National Payment Card System, with stablecoins likely pegged to major fiat currencies like the US dollar or Chinese yuan. This marks a significant step as a major global power integrates crypto into its financial system—an event that will go down in the history books.

In addition, several major rebrands have taken place. Fantom has rebranded to Sonic Labs, focusing on launching a new high-speed blockchain called Sonic to tackle congestion issues and improve user experience. Sonic Labs plans to introduce the S token and launch various incentive programs to attract users and developers, facilitating a smooth transition for existing Fantom users with a token conversion option. 

Similarly, Maker has rebranded to Sky to expand DeFi accessibility. The rebranding includes an upgrade of its decentralized stablecoin, Dai, to USDS, and the introduction of a new governance token, Sky (SKY), which enhances its original Maker (MKR) token. 

Lastly, Aave Labs is considering a strategic partnership with BlackRock to integrate its $509M BUIDL tokenized fund into Aave’s GHO Stability Module (GSM). This partnership aims to optimize the GHO stablecoin’s performance by incorporating real-world assets like cash and U.S. Treasury bills from the BUIDL fund, ensuring stability and liquidity through a 1:1 convertibility with USDC.

These highlights suggest that the market is gearing up for a significant bull run. Global powers are adopting crypto infrastructure, and key players are strategically rebranding and forming partnerships, positioning themselves for what will be one of the most memorable bull runs. 

Now is the time to stay invested and not sell your holdings at a discount to BlackRock.

Other Major Developments

• Binance and Bybit set to launch Solana liquid staking tokens as major players enter the LST market

• Nvidia posts Q2 revenue of $30B, beating forecasts by 3.8%

• Donald Trump vows to make the U.S. the "Crypto Capital of the World" if elected

• Elon Musk wins dismissal of lawsuit accusing him of Dogecoin manipulation and insider trading

• Apple reportedly in discussions to invest in OpenAI, alongside Thrive Capital, Microsoft and Nvidia

• Telegram CEO Pavel Durov released on €5M bail, placed under judicial supervision

• Trump's NFTs surpass $2M in sales with only 5% of the collection sold

• SEC to implement new rules requiring monthly portfolio reports from ETF holdings

• Sony to launch the first public testnet for its Optimism-based Soneium blockchain

• Nasdaq files with SEC for approval to list and trade bitcoin index options

• Celsius bankruptcy distributions total over $2.5B to 251,000 creditors

• Petition to "Set Telegram CEO Durov Free" reaches over 300K signatures

• French President Macron states that Pavel Durov's arrest had no political motives

• Justin Sun pledges $1M to a DAO supporting Telegram CEO Pavel Durov

• Stablecoin market cap reaches a new all-time high of $168B, surpassing the early 2022 record

• Polymarket bettors predict Pavel Durov could be free by October, while Vitalik Buterin praises the platform for breaking growth records

Major Coins

Over the past week, the crypto market has experienced mixed movements. BTC has declined by 2.3%, while ETH has seen a sharper drop of 5.9%. Solana SOL also faced a downturn, falling by 2.8%.

Meanwhile, the AI sector experienced a minor uptick, likely buoyed by positive earnings from NVIDIA, signaling renewed investor interest in AI-related crypto assets. Additionally, gaming tokens like BEAM and IMX saw notable price gains. In contrast, TON faced a pullback following the arrest of Pavel Durov, while TRX has moved into the top 10 cryptos, driven by its active ecosystem and recent positive price performance.

• NOS (70.4%)

• PEOPLE (22.8%)

• ABT (21.1%)

• MPLX (21.0%)

• ALPH (17.7%)

• ZRO (16.0%)

• PENDLE (14.2%)

• PRIME (14.2%)

• RLB (7.8%)

• AGIX (7.6%)

• IMX (7.6%)

• AKT (6.8%)

• HNT (5.0%)

• FLR (5.0%)

• KAS (4.9%)

• FET (4.5%)

• FTN (3.5%)

• EGLD (2.4%)

• TRX (2.0%)

• KCS (2.0%)

• RENDER (0.4%)

Memes

The memecoin market has been relatively quiet, but there’s been notable action from new entrants in the Tron ecosystem. Noteworthy newcomers include KOKO, FWOG, APES, REDO, and HOPPY. Meanwhile, some memecoins that recently experienced pullbacks, such as GIGA, DADDY, WEN, and BRAINLET, appear to have reached a bottom.

• KOKO (198.6%)

• FWOG (141.7%)

• APES (119.4%)

• PORK (95.0%)

• REDO (83.1%)

• HOPPY (80.8%0

• SUN (36.1%)

• HTM (32.4%)

• SUNDOG (31.7%)

• MANEKI (30.0%)

• OSAK (24.4%)

• BRAINLET (20.7%)

• NEIRO (13.2%)

• WEN (12.3%)

• DADDY (10.3%)

• POPCAT (6.4%)

• ANDY (6.3%)

• GME (4.3%)

• PEIPEI (3.9%)

• GIGA (1.9%)

Smart Money Accumulation

Many experienced traders rely on bots to manage their favorite memecoins and high-risk, high-reward trades. Bot trading volumes have been declining throughout August, indicating reduced market activity and lower volatility. However, there have still been notable accumulations by smart money, signaling strategic positioning despite the quieter market conditions.

Despite the positive news around NVIDIA's earnings and the anticipation leading up to it, there was surprisingly little trading activity in smaller, high-risk AI coins compared to the start of the year.

On Ethereum, there were notable accumulations this week in Neiro (24%), HQ (14.99%), KOIN (40.25%), and YIELD (21.24%). Conversely, smart money saw significant sell-offs in WOLF (-20.17%) and MIGGLES (-15.4%), indicating a mixed sentiment among traders for these more recent memecoins.

The Solana memecoin ecosystem remains relatively quiet compared to a few weeks ago, pobably due to the recent surge in activity surrounding Tron memes. 

Smart money has been trending down across most major Solana memecoins, with significant sell-offs in FWOG (-22.42%), MUMU (-18.12%), and WIF (-19.32%). The only notable accumulation has been in r/snoofi, which saw a substantial increase of 103%, indicating selective interest in specific assets despite the overall market cooldown.

Data Points

BTC Exchange Holdings Hit 2024 Lows

BTC held on exchanges has hit its lowest level for 2024, signaling that investors are increasingly anticipating a significant price run-up and are moving their holdings to private wallets in preparation for a potential market surge.

• With a decreasing amount of BTC held on exchanges, market liquidity is lower, which could lead to more volatile price swings as supply becomes more constrained and large trades impact the market more significantly.

• The move of BTC from exchanges to private wallets suggests a shift towards a "hold" mentality, indicating stronger confidence among investors in the long-term value of BTC and a potential anticipation of future price gains.

Max ETH Pain 

One of the most unexpected developments in the current crypto cycle has been the significant underperformance of ETH. Despite being the catalyst for the DeFi summer and central to the massive gains and high yields of the last cycle, as well as a key player in the NFT boom, 

Ethereum now appears to be one of the least favored chains. Recent comments from Vitalik on DeFi, and recent decisions by the Ethereum Foundation to sell substantial amounts of ETH have only added to the negative sentiment. 

Focusing on the ETH/BTC ratio, the decline has been steep, though there was a slight recovery this week. 

Coupled with this, ETH's market dominance has hit a significant low, dropping by over 50%, which is its lowest level in 1,230 days.

The current trend raises questions about  ETH’s ability to maintain its leadership in the crypto space, especially as other cryptos and networks gain traction. We might be approaching the absolute bottom for ETH, or this could be the onset of more severe challenges for the network. However, we lean toward the former, believing this period will be remembered as one of ETH’s most difficult phases.

Tron Boom

Tron activity remains high, with daily active addresses averaging around 3M. Roughly 63K coins have been created on Sunpump to date.

Trading volumes on Sunpump have been generating significant revenues for the protocol, with daily revenues averaging around $340K.

That’s all for today’s insights! We hope you found it valuable. Until next time, take care, anon!