Uncertainty Hits The Market

GM anon!

We were so close! Many believed this was the moment, and Uptober seemed to be off to a fantastic start—until it all came crashing down within a few days. But remember, October isn’t over yet, and in crypto, it's always unpredictable—one day it's the apocalypse, and the next you’re racing to the gates of Valhalla!

VirtualBacon summed up the recent events perfectly on X, and he regularly shares his insights in The Coiners community. To read his full insights, follow the source link provided below the screenshot.

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TLDR

• Recent geopolitical tensions between Israel and Iran have introduced new uncertainty, affecting market stability despite the recent FED rate cut

• Despite market corrections, SUI and TAO remained top performers, with SUI reaching a 6-month high due to its bridge launch on the mainnet

• EigenLayer's EIGEN token debuted with a $7.1B market cap, gaining liquidity and visibility after being listed on Binance 

• SOL demonstrated strength by surpassing ETH in weekly DEX volume, while Firedancer testnet showcased impressive transaction speeds

• Bithumb announced plans for a NASDAQ listing, and Matrixport is expanding into Europe, indicating increased institutional involvement in crypto

• Despite these advancements, spot trading volumes on major exchanges are still near yearly lows 

• BTC ETFs saw significant outflows, and ETH gas fees increased by 500% in just two weeks, signaling investor caution and scalability issues

• Pochita quickly reached a $20M market cap. Multiple versions emerged, but the Solana version with the highest volume is considered the "real" one

• Despite short-term challenges, major indicators suggest a parabolic move for crypto could be on the horizon. Patience is key as market dynamics continue to evolve

Market Overview

If there's one thing markets dislike, it's uncertainty, and the recent geopolitical tensions have brought exactly that. After a prolonged period of market stagnation, it seemed like certainty had returned following the recent FED rate cut—until the conflict between Israel and Iran added new uncertainty. While war is undeniably a negative event, it is important to consider the potential macroeconomic impacts. Historically, geopolitical conflicts often lead to increased government spending and money printing, which can eventually drive up asset prices, including crypto, over the long term. However, it is likely that the situation will be contained in some way, and only time will tell how it unfolds.

Amid these market jitters SUI and TAO continued to lead the pack as top performers, even during the broader market correction. SUI hit a 6-month high with the launch of its bridge on the mainnet, drawing more attention to this emerging blockchain. Meanwhile, SOL showed its potential by surpassing ETH in weekly DEX volume, suggesting a growing shift of users to the Solana ecosystem for decentralized trading.

EigenLayer also made headlines, with its EIGEN token becoming tradable after restrictions were lifted, debuting with a market cap of $7.1B. Binance's addition of new trading pairs for EIGEN has further enhanced its liquidity and visibility. EigenLayer's innovative restaking protocol aims to bolster Ethereum’s security while providing additional yield opportunities, which makes it a significant development in the DeFi space.

On the infrastructure side, Firedancer achieved impressive transaction speeds on the Solana testnet, indicating that scalability remains a top focus for blockchain platforms. Meanwhile, Bithumb announced plans for a NASDAQ listing, and Matrixport confirmed its expansion into Europe, signaling that institutional involvement in the crypto space is still growing.

Despite these advancements spot trading volumes on major exchanges remain near yearly lows, reflecting ongoing caution among investors. BTC ETFs saw their largest outflows in a month, and ETH gas fees spiked by 500% in just two weeks, highlighting persistent issues with cost and scalability on Ethereum. Nonetheless, the crypto sector continues to expand and innovate. Grayscale launched a decentralized AI fund, and Robinhood enabled crypto transfers in the EU—both signaling growing adoption and evolving use cases. 

As we close out the week, remember while the uncertainty remains, it's crucial not to panic sell. Major indicators suggest that a parabolic move for crypto is on the horizon. It may take some time for this to materialize, but patience WILL pay off in the long run. 

Stay focused and lock in, anon.

Majors

This week has been challenging for major tokens. After several weeks of impressive gains, the recent market pullback has hit the majors hard in the short term. BTC dropped by 7.0%, ETH by 10.9%, SOL by 12.7%, while SUI, the new favorite L1, showed resilience with only a 1.3% drop, making it clearly the strongest coin over the last 7 days. Below is a short list of some interesting outliers (not meme coins) that showed strength, but overall, it wasn't a good week for the majors.

• GEMS (61.9%)

• CWEB (33.2%)

• UMA (19.8%)

• CETUS (19.7%)

• ULTIMA (15.5%)

• ALEO (13.8%)

• W (10.7%)

• FTN (8.1%)

• CET (7.0%)

• RLB (2.8%)

• FLR (2.3%)

• TRX (1.3%)

• APT (0.1%)

Memes

The Next Bonk?

Pochita, inspired by the owner of Bonk's new dog, became a quick-hit meme coin on Solana, capturing significant market interest and reaching a $20M market cap within 9 hours of launch.

• Pochita was named after the owner of Bonk's new dog, which sparked the creation of the coin and led to what is being called the "Pochita Wars", seeing multiple versions of the coin being launched.

• There are at least three versions of Pochita coins on both Solana and Ethereum, but the highest volume Solana version is considered the "real" one.

Sui Szn

It seems that as an ecosystem pumps, the first thing to surge is its meme coins, and Sui is a perfect example of this. Over the past week, meme coins in the Sui ecosystem saw significant gains, although some have retraced as the broader market dipped. Here are the major meme coins that pumped, and if Sui memes interest you, keep an eye out on the following:

• HIPPO: -26.6%

• BLUB: -5.7%

• FUD: +82.0%

• SCA: -22.8%

• AAA: +21.6%

• AXOL: -13.0%

• PLOP: -32.3%

• SUICUNE: -25.5%

• SCB: -27.1%

Moving on to the best-performing meme coins this week, it's important to watch how the top performers behave during a pullback, like the one we just experienced. This can be a strong indicator of future strength—if a coin's pullback is shallow compared to others, and its bounce is strong, it’s likely to be a top contender as we head into the next phase of the bull market.

• GIKO (304.4%)

• JOE (238.9%)

• SPX (199.2%)

• FWOG (83.1%)

• MOODENG (33.5%)

• DADDY (25.6%)

• SCF (25.3%)

• MAGA (21.4%)

• TRUMP (17.5%)

• GIGA (14.0%)

• NPC (11.4%)

• OSAK (4.4%)

Smart Money Accumulation

Smart money accumulation shows mixed trends for the Ethereum ecosystem:

• Increased Accumulation: DOGE (+32.15%) and Mog (+18.2%) saw significant interest, with balances of $247.96K and $749.26K, respectively.

• Decreased Accumulation: Wolf (-17.71%), Bitcoin (-13.86%), and Miggles (-12.3%) faced notable declines, indicating reduced interest or profit-taking.

• Stable Holdings: 3AC and Pochita remained stable, while BRETT and PEPE showed minor declines, suggesting minimal adjustment by smart money.

Smart money accumulation for the Solana ecosystem was more bullish:

• Increased Accumulation: $WIF (+26.48%), Manyu (+521.84%), and FWOG (+4.49%) saw strong interest, with significant accumulation, particularly in Manyu, which experienced a large percentage increase.

• Decreased Accumulation: MOODENG (-20.52%), SCF (-11.76%), and $michi (-2.43%) faced notable declines, suggesting reduced interest or profit-taking by smart money.

• Stable Holdings: Pochita remained stable, while mini showed a minor increase (+1.0%), indicating relatively steady holding levels in these tokens.

Data Points

AI Moves

Here's another insight into what has been covered on the Coiners this week. Lucrative trades like this are shared daily.

Major Takeaway: Virtual Bacon is currently focused on trading AI-related altcoins, specifically identifying key support/resistance levels, strategic entry points, and setting stop-losses and take-profit targets for managing risk effectively.

AI Altcoin Sector Upside: Virtual Bacon sees continued strength in AI altcoins over the past 30 days and believes the sector still has huge potential for profitable trades.

Some Trade Setups and Key Levels:

• FET: Entry in the $1.25 - $1.4 range, with a stop-loss at $0.98 and profit targets at $1.96 and $2.43.

• AR: Entry in the $16 - $20 range, stop-loss at $14 (waiting for daily close confirmation), with a profit target at $45.

• NEAR: Entry in the $4.2 - $4.9 range, stop-loss at $3.3, with profit targets at $6.35 and $8.4.

• AGI: Entry in the $0.136 - $0.164 range, stop-loss at $0.10, and take-profit at $0.28, with potential to DCA out between $0.5 - $0.7.

Buying Opportunities

With the STH-SOPR currently at 1.0, the market presents a favorable buying opportunity, as short-term holders are neither in profit nor facing significant losses, indicating reduced selling pressure.

• Buying Opportunity During Dips: When STH-SOPR is at or slightly below 1.0, it signals a potential entry point, as short-term holders are breaking even, often preceding an upward move in a bull market.

• Sell Pressure Insight: High STH-SOPR above 1.0 typically suggests elevated sell pressure, as short-term holders sell at a profit, which is less ideal for buyers. Currently, at 1.0, this pressure is neutral, making it a more attractive time to buy.

Checkmate, one of the leading experts in BTC on-chain analysis, dives into this topic in detail. Check it out below:

BTC Dominance & Key Ratios

Before the recent Iran-Israel conflict, BTC dominance was declining, with altcoins gaining strength. However, after the missile strike, investors sought BTC as a safer asset, causing a rise in BTC dominance. Gold also gained amid uncertainty, reinforcing its traditional safe-haven role.

The ETH/BTC chart shows a consistent downtrend since mid-April, with ETH steadily losing value relative to BTC. Currently, it is trading near support around 0.038, indicating continued weakness. 

The price action suggests that BTC has been outperforming ETH for several months, which aligns with the recent rise in BTC dominance amidst global uncertainty. This trend could continue unless a reversal pattern or significant catalyst appears to boost ETH’s strength.

SOL showed impressive strength throughout September against BTC but has slightly softened going into October. For those who rotated from ETH to SOL in 2024, the move has paid off handsomely. But as we head into Q4, the question remains: will SOL continue to shine, and will ETH keep spiraling down into the abyss of pain? Only time will tell if this trend will shift or if ETH's woes will persist.

That’s a wrap for today’s insights! We hope you found this issue valuable. Until next time, stay sharp, anon!