Good morning. There’s a few bullish catalysts right in front of us, and the odds that at least one of them hit are high. That’s our first story. Then, we’ve got two trade setups for you, but the beauty is there’s flexibility to go long or short with either. See your Trade and DEGEN Play of the Day for the details.
All of that, plus . . .
- the prediction market narrative is heating up,
- a public company is about to buy a big bag of HYPE,
- and your Alpha Leaks.
Chart of the Day
The Bitcoin and crypto markets are still very much in recovery mode after the October 10th crash. As a reminder, October 10th was crypto’s largest liquidation event in history. And our analysis shows that historically, Bitcoin usually takes two to three months to fully recover from such crashes.
Now the Crypto Fear and Greed Index is most definitely flashing signs that this market is still licking its wounds. And that’s because the index is registering a 28 “Fear” reading right now. The last time this index’ reading was this low was in late April, just after Bitcoin touched $75,000.
One positive note about this, from my perspective, is that the index is this low, despite Bitcoin trading above $108,000. That’s the power of the psychological phenomenon called “price anchoring”.
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Trade of the Day
ETH is your Trade of the Day. And the nice thing about this one is you don’t have to force it, or bring your cognitive bias to the table. Rather, just let the price and technicals play out, and you follow it.
So we’re on the four hour here, and there’s a clear symmetrical triangle. Price is consolidating, and that’s confirmed with falling volumes, and an RSI in neutral territory. So the TLDR is prepare for a move.
Go long or short when you see price break above or below this resistance or support line. The higher the volumes on either move, the better. Now a more conservative approach is to wait for the price to break outside the triangle, and then go long or short when the price resets either line.
Want more real-time setups and trade calls? Join our Inner Circle community.
Alpha Leak
- Ethena [ENA] got its first native DEX – Ethereal – two days ago. Ethereal offers spot and perps trading with USDe as the primary base asset. And given that USDe provides yield, the plan is for Ethereal users to earn a steady APY from the DEX. Overall, if Ethereal is a success, it could provide a boost to ENA.
- Galaxy Digital [GLXY, Stock] absolutely smashed their Q3 earnings with $505M in net income, which is a record for the company. However, the stock is down 10% from ATHs earlier this week. So keep an eye on it. There might be an opportunity for cheaper fill down the road.
- Meteora’s [MET] native token – MET – launches today. Meteora is a Solana-based project that focuses on building dynamic liquidity pools.
- Rayls [RLS] is an emerging RWA play. The developers say Rayls is the “blockchain for banks”, and that they’ll be bringing $100T in banking funds on-chain. Their native token – RLS – hasn’t been released yet.
- WhiteFiber [WYFI, Stock] is an AI and high-performance computing company that IPOed in September. The stock is currently off its ATHs now by about 32%, so there might be a good buy the dip opportunity here.
News Roundup
More Hopium Please.
Things feel rough out there, and we all could use some hopium. So, let’s outline the biggest catalysts for our markets this quarter. Obviously, there’s no guarantees, but keep these tentative events on your radar, because any of them happening should help boost prices.
- US/China Trade Deal: Trump and Xi are meeting in Korea at the end of this month to try and make a deal. Prediction markets currently say there’s a 77% chance of an agreement by Nov. 10th.
- Fed. Rate Cuts: CPI data comes out tomorrow. The forecasts are YoY inflation (3.1%), MoM headline inflation (0.4%), and MoM core inflation (0.3%). CPI data that comes in below or above forecasts should increase or decrease the odds of more cuts, respectively. The CME Fedwatch thinks there’s a 98% chance of a 25 bps cut on Oct. 29th, and a 97% chance of a 25 bps cut on Dec. 10th.
- US Government Reopening: This current shutdown is the second-longest in history. Both sides still appear dug in, but realistically, this can’t go on forever. A deal and reopening should juice the system with more fiscal stimulus. Prediction markets think there’s a 56% chance of a reopening by Nov. 15th.
- Crypto Market Structure Bill: Crypto executives were in D.C. this week, meeting with both Senate Democrats and Republicans, and pushing for a bill. Lummis says a bill can get passed by the end of this year, but prediction markets think there’s a 20% chance of that happening.
Using these predictions as percentages, and assuming that all events are independent (i.e. binomial distribution), the odds that none occur is 0.2%, at least one occurring is 99%, at least two occurring is 90%, at least three occurring is 51%, and all four occurring is 8%. So basically, the math says help is most likely on the way.
Prediction Markets are Heating Up
Prediction markets are booming, with rivals Kalshi and Polymarket drawing massive investor interest amid record volumes and new partnerships. And we think these prediction markets could be the next big cross-current narrative with crypto.
First there’s CFTC-regulated Kalshi, which launched in 2018. They’re looking at valuations above $10B, just after they closed a $300M funding round co-led by Andreessen Horowitz and Sequoia. Kalshi’s CEO, Tarek Mansour, posted earlier this month that their markets just hit $50B in annualized trading volumes, and that they’re expanding to over 140 countries.
Then there’s Polymarket, which was founded in 2020. They’re negotiating fresh funding at a $12 to $15B valuation, which is up from $1.2B in June. Their most notable investor is NYSE owner Intercontinental Exchange, who is considering dropping $2B into the platform. Polymarket has recently added Bitcoin deposits, is reopening in the US, and is considering a POLY token.
Now the latest data we can find says these two companies are essentially tied when it comes to trading volumes. Expect this competitive escalation to continue, and for continued growth in the subsector.
Hyperliquid Strategies to Raise $1B to Buy More HYPE
Hyperliquid Strategies filed an S-1 with the SEC this week to raise up to $1B to buy more HYPE. The $1B will be generated primarily via a 160M stock public offering of SONN (i.e. ticker).
Now to be clear, Hyperliquid Strategies is in the middle of a SPAC merger with Nasdaq-listed biotech company Sonnet BioTherapeutics (SONN) right now. So exposure to all of this from an equity standpoint is found via SONN.
Hyperliquid Strategies is led by Chairman Bob Diamond, a former Barclays CEO. The company already holds 12.6 million HYPE in their treasury, and they’re planning to stake most of their tokens for yield.
Hyperliquid, a perps DEX, has processed over $1.5T in volume since 2023, and it’s right now back in first place in 24h perp volume, after Aster’s fall.
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Degen Play of the Day
Solana is your DEGEN Play of the Day. But similar to your Trade of the Day, it probably makes sense to be open to both longing or shorting SOL, depending on how price interacts with this line.
What’s clear is that the market both recognizes and respects this ascending support line, which has been active since April.
Now we like longs when you see prices begin to lift off this line. Alternatively, if there’s a break below it, or if price begins to use the line as resistance, there’s an opportunity for a really solid short as well.
Copium of the Day
It’s Wealth Mastery’s first ever “Copium of the Day”. And this one comes from Yours Truly. Now why am I flashing to you my severely underwater open trade? Well . . . two reasons.
First, it’s to reiterate that crypto, investing, and trading isn’t just an intellectual project on our end. Nope. Lark and his team are steeped in this stuff. We do it professionally, and we do it personally. We’re in the trenches right along with you.
And secondly, given we’re in the trenches, there’s a good chance that when you’re feeling the pleasure / pain of these markets, we’re feeling the exact same thing.
Copium loves company. Now come on Bitcoin, give me a pump above $115.9!!!
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Legal Disclaimer
Wealth Mastery (Lark Davis, and the Wealth Mastery writing team) are not providing you individually tailored investment advice. Nor is Wealth Mastery registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. Wealth Mastery is not responsible for any gains or losses that result from your cryptocurrency investments. Investing in cryptocurrency involves a high degree of risk and should be considered only by persons who can afford to sustain a loss of their entire investment. Investors should consult their financial adviser before investing in cryptocurrency.
You can find a full disclosure of all my crypto & venture investments here.
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
