We Are So Back

GM anon!

The Fed just threw down with a big rate cut, and the market is ready to run. With liquidity pumping into the system and investors eyeing riskier plays, it's looking like we’re headed a lot higher from here. The energy is shifting, and cryptos, which have been lagging, are ready to catch up.

So, whether you’re locking in your gains or holding tight for the next leg up, now’s the time to stay sharp. Things are about to move fast, and it’s looking like the bulls are back in charge. Buckle up!

TL;DR

• The Fed cut interest rates by 50 bps, sparking a surge in the stock market as investors dive back into risk assets, with the Dow, Gold and S&P hitting record highs

• Cryptos, which have underperformed recently, are poised to regain momentum as the market shifts to a "risk-on" environment, potentially driving BTC and other assets higher

• SUI and FTM lead the smaller L1 blockchain rally, with SUI up 46% and FTM rising 24%, fueled by technical upgrades and strong market interest

• The memecoin sector saw explosive growth, led by NEIRO, TURBO, and BABYDOGE, while established names like POPCAT, WIF, and FLOKI maintained steady performances

• BTC is on the verge of triggering a $21.77B short liquidation at $70,476, potentially setting off a short squeeze that could drive prices even higher.

• BTC ETFs saw strong inflows this week, but ETH ETFs struggled with outflows

Essential Macro Overview

The stock market surged to record highs following the Fed’s decision to cut interest rates, signaling investor optimism and renewed confidence in risk assets.

• The Dow Jones jumped over 500 points, closing above 42,000 for the first time, while the S&P 500 hit a new all-time high at 5,713.64, as investors reacted positively to the Fed's rate cut.

• The Fed lowered its interest rate by 0.5%, bringing it to a range of 4.75% to 5.00%, the first reduction in four years, aimed at softening economic conditions.

• Weekly jobless claims dropped significantly, boosting market sentiment, with a fall of 12,000 claims to 219,000, which was much lower than expectations.

• Tech stocks, particularly Nvidia and AMD, rallied on the news, with gains of around 4-6%, as lower interest rates encouraged a risk-on environment.

• Stocks leveraged to an improved economic outlook, such as JPMorgan Chase and Caterpillar, also saw gains, with Caterpillar surging by 5.1%.

• Amongst the surge in the Dow and S&P, gold also hit new highs.

What this means for BTC and crypto:

• Cryptos have underperformed recently compared to other risk assets, but with the influx of liquidity and renewed interest in riskier investments, now may be the time for crypto to regain momentum as the market aligns with risk-on sentiment.

• Lower interest rates often lead to increased liquidity in markets, encouraging more investment in riskier assets like crypto.

• With the Fed's action promoting a "risk-on" sentiment in traditional markets, this bullish momentum could spill over into the crypto market, driving BTC and other cryptos higher.

• Institutional interest in crypto is also rising, as both traditional and digital markets become more attractive investment opportunities amidst looser monetary conditions.

Majors

BTC is up 9.7% over the last week, ETH is up 8.5%, but SOL leads the majors with a 12.4% surge. The crypto market is roaring back this week, and SAGA, SUI and FTM are leading the charge among smaller L1 blockchains. SUI is riding high on the back of technical breakthroughs, attracting waves of new investor interest. FTM, not to be outdone, smashed through key resistance levels, keeping the bulls in control and setting the stage for more gains. 

In the world of modularity, TIA and DYM are making headlines, as their innovative structures gain traction. The AI sector isn’t staying quiet either, with a dramatic recovery that’s breathing new life into the space. Meanwhile, over in the Solana ecosystem, projects like JUP are basking in the glow of Solana’s impressive momentum, capitalizing on its continued dominance in the market. With strong performances across the board, this week has been a reminder of how quickly the crypto landscape can shift—and right now, it’s all about the climb.

• SAGA (74.3%)

• SUI (54.5%)

• TAO (48.3%)

• TIA (43.5%)

• AERO (38.4%)

• SXP (37.7%)

• DYM (36.3%)

• ALT (35.6%)

• PAAL (34.7%)

• FTM (33.9%)

• OSMO (30.4%)

• IMX (27.8%)

• METIS (23.4%)

• SEI (22.0%)

• ROSE (21.4%)

• OCEAN (21.2%)

• FET (20.3%)

• APT (18.5%)

• CKB (17.9%)

• BEAM (17.6%)

• AVAX (16.5%)

• CORE (15.5%)

• RUNE (15.2%)

• JUP (14.5%)

• THETA (13.6%)

• GALA (12.1%)

• INJ (11.9%)

• PYTH (11.7%)

• ARB (10.9%)

• STX (10.0%)

• GRT (10.0%)

• ONDO (9.1%)

Memes

This week has seen explosive growth in the memecoin sector, with NEIRO, TURBO, and BABYDOGE leading the charge. While NEIRO experienced an initial spike after being listed on Binance before a sharp correction, TURBO maintained more stable growth, and BABYDOGE displayed significant volatility but strong gains.

Meanwhile, some of the more established memecoins, like MOG, POPCAT, WIF, PEPE, and FLOKI, have also performed well. POPCAT and WIF saw notable upticks in price and trading volume, while PEPE and FLOKI remained stable, holding their ground and continuing to capture attention in the market. Celebrity coin MOTHER also experienced an uptick, seemingly the only coin from the recent celebrity craze to have seen positive action this past week. 

• NEIRO (2169%)

• TCAT (292.7%)

• HEHE (254.7%)

• SPX (139.1%)

• BILLY (122.3%)

• BABYDOGE (122.2%)

• MOTHER (72.4%)

• BLUB (66.2%)

• TURBO (62.3%)

• BOBO (58.0%)

• ANDY (54.1%)

• OMIKAMI (53.0%)

• PEPECOIN (44.2%)

• POPCAT (41.7%)

• PONKE (32.6%)

• GIGA (31.4%)

• MEW (31.1%)

• MOG (21.9%)

• WIF (16.9%)

• PEPE (10.1%)

• FLOKI (9.8%)

Smart Money Accumulation

In the past week, the ETH ecosystem has seen varied movements in smart money accumulation. Leading the charge is WOJAK, which surged by 39.36%. 

• On the more modest side, ANDY and BRETT gained 3.13% and 2.08%, respectively, pointing to steady accumulation. These tokens may not be experiencing explosive growth, but they are clearly attracting interest, indicating confidence from key holders.

• However, not all tokens fared well. MIGGLES saw the largest decline, dropping 31.98%, likely as investors took profits after a period of gains. Similarly, Mog fell 11.38%, also suggesting profit-taking or a lack of near-term catalysts to drive further growth. 

• WOLF and BITCOIN faced pressure as well, both down by over 8%, which could indicate short-term uncertainty or market corrections.

Over the past 7 days, smart money accumulation in the Solana ecosystem has shown mixed trends across various tokens. Notable accumulations were seen in MEW, which gained 15.13%, and FWOG, which saw a 9.69% increase, indicating growing confidence from larger holders in these assets.

• Conversely, several tokens experienced significant sell-offs, with BILLY down by 36.21% and MICHI declining by 17.7%, suggesting profit-taking or reduced confidence in these tokens by smart money wallets. POPCAT and WIF also saw negative action, dropping by 9.81% and 6.99%, respectively.

• While a few tokens, such as MINI (up 2.87%), managed to see slight gains, the overall trend reflects selective buying focused on particular tokens, indicating that smart money is being cautious and opportunistic in its allocations within the Solana ecosystem.

Data Points

SUI & FTM

SUI and FTM have experienced impressive rallies in the past few weeks, with SUI up 46% and Fantom rising 24%. This surge is driven by technological upgrades and renewed market optimism.

• SUI surged by 46% in two weeks, primarily due to technological enhancements like the Mysticeti Consensus Protocol, which boosted investor confidence.

• Fantom gained 24%, breaking key resistance levels, supported by its upcoming Sonic Upgrade aimed at improving scalability and network performance.

• SUI’s market cap now stands at $4.12B, with a daily trading volume nearing $970M, reflecting heightened investor interest.

• Fantom's DeFi ecosystem has $101M locked, signalling increased trust and activity in decentralized applications on the network, while SUI is currently sitting at $813M. 

SUI & FTM Ecosystem Overview

SUI's DeFi ecosystem has grown rapidly, placing it in the DeFi top 10 with over $813M TVL. Several notable protocols contribute to this ecosystem, including

Aftermath Finance:

• A DEX on Sui with over $2M locked.

• Offers liquidity mining incentives and yield farming opportunities, allowing users to move assets across multiple blockchain networks and earn rewards for providing liquidity.

Turbos Finance:

• A standout DEX offering smart routing for USDC stablecoin swaps and various liquidity pools.

• Provides gamified DeFi experiences through the Grand Prix feature, where users stake TURBOS tokens and earn weekly rewards.

• Current APY: 13.58% on USDC, 10.15% on USDT, making it an attractive option for stablecoin parking and high returns.

Cetus Protocol:

• A major DEX on Sui offering 2.65% APY with over $882K locked.

• Focuses on concentrated liquidity for stablecoins and native tokens.

Sui 8192 (GameFi):

• A puzzle-based GameFi project developed by Ethos Wallet, where every move is recorded as a transaction on the blockchain, contributing to Sui’s network activity.

Stablecoin Yields:

• USDC APY: 13.58% with $119.9M locked.

• USDT APY: 10.15% with $19.8M locked.

• Both USDC and USDT offer competitive yields, making Sui a solid option for stablecoin parking and passive income generation.

NAVX and vSUI:

• NAVX: Yielding 4.42% APY with $6.2M locked.

• vSUI: Provides 7.04% APY, with over $55M locked, offering staking and liquidity opportunities for advanced DeFi users.

Why This Matters:

• The high stablecoin yields (10-13% for USDC/USDT) on Turbos Finance and Cetus Protocol are great options for users looking to park their stablecoins and generate passive income while minimizing exposure to volatile tokens.

• Sui’s growth in DeFi, supported by its low fees and fast transaction speeds, makes it a competitive environment for both new and experienced DeFi users.

• The wide range of protocols, from yield farming to GameFi projects like Sui 8192, shows that Sui is becoming an all-around ecosystem, attracting users from different sectors of the blockchain space.

On the FTM side, Beethoven X a multi-strategy DEX, and SpookySwap, a popular yield farming and liquidity provisioning platform, lead the charge in offering users competitive yields. These protocols provide a range of staking and liquidity mining opportunities, with some pools offering double-digit APRs. The upcoming Sonic Upgrade is expected to improve network scalability and further drive DeFi participation across the platform​.

Put your SUI and FTM to work. Check out yields for SUI here, and FTM here.

$21B Of Shorts

BTC is on the verge of triggering a massive liquidation event, with over $21.77B in shorts set to be liquidated if the price hits $70,476 on Binance’s perpetual market.

• The liquidation heatmap highlights a significant concentration of short positions poised for liquidation at this key price level, which could fuel a substantial price rally if reached.

• BTC needs to rise by roughly 11% to hit this critical threshold, potentially setting off a short squeeze that may drive prices even higher.

BTC & ETH ETF Flows

Over the past week, BTC ETFs have shown positive inflows, while ETH ETFs have experienced mixed results.

• BTC ETFs saw an inflow of $158.30M on September 19, 2024, driving the total BTC ETF holdings to $17.61B.

• ETH ETFs have experienced a significant slowdown in inflows, with cumulative flows turning negative due to recent outflows. On September 19, 2024, the total outflow across ETH ETFs stood at $610.50M, highlighting a downturn in investor sentiment.

That wraps up today's insights! We hope you enjoyed today’s issue! Till next time anon.