In This Issue

• I share my thoughts on I share my thoughts on the state of the market, Credit Suisse, bonds in bad shape, QE infinity, Solana goes down again, Ethereum layer twos & the big picture.
• Rebecca breaks down the latest news.
• REKT has a TA report on Bitcoin dominance, the altcoin index, Chiliz, Ethereum Classic, Chainlink & Elrond.

[Last Chance] Crypto Alpha Report

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• 📉 A macro overlook of the crypto markets
• 🎈 The top airdrops of the month
• 👀 The Top altcoins to watch
• 🧑‍🌾 The best DeFi farms
• 🙊 The most exciting NFT mints

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Premium Subscription highlights this week:

• The SEC vs Ripple lawsuit, a lawsuit which could significantly impact the crypto industry as a whole, depending on its outcome.
• Jesse’s altcoin report: DeFiChain is a Proof of Stake network specializing in Wrapped Tokens, but is it a good project to add to your portfolio?
• Portfolio moves. Lark had some big moves this week, as well as some buy and sell orders set for what’s to come.

What’s On My Mind by Lark

The State of the Market 

The equity markets had a nice bounce at the start of the week this week.

Everyone is whispering about the potential for a FED pivot. That would be a change in policy at the Federal Reserve. In particular stopping interest rate hikes or at least starting to taper them off.

The next inflation data release is on the 13th of October, the next FED meeting is on the 2nd of November. These are the key market moving events moving into October. These are the events that will determine IF we get a pivot from the FED or not. To be clear, a FED pivot would be bullish for markets. 

Also, to be clear, the markets have many headwinds and there are many factors which can derail the markets still. Some of which we will discuss in a moment. 

IF, potentially BIG IF, we do not get a total meltdown as a result of all of the market dysfunction then that provides a window for a “hated rally” when much of the market is on the sidelines in cash and basically a massive squeeze pushes prices higher. Remember, bear markets also put in some of the biggest rallies in markets. 

The S&P 500 has just had a very nice start to the month. And while we did trigger the “kiss of death” pattern on the S&P 500, there is no guarantee that this will result in a catastrophic collapse. However, we should be very skeptical of any rallies and always be ready to book in profits when we have them.

This is a bear market until otherwise stated. 

Bitcoin has also broken above the downtrend line on the linear chart. Volume is super convincing, so that makes the likelihood of a fakeout higher. 

Bitcoin has hit its highest correlation with gold in more than a year. Which is noteworthy. Perhaps we are seeing more interest in gold as a store of value at these prices from long term value investors. 

Credit Suisse 

Major international bank Credit Suisse is rumored to be in dire straits. The bank has 1.5 trillion in assets under management. The knock-on effects from this could be catastrophic. The bank says they have “a strong capital base and liquidity”… I feel like I have heard that story before… 

The CFO of Lehman Brothers literally said “Our Capital position is strong” a week before they went under. 

The bad news here is that many other banks are also taking huge hits including Deutsche Bank which has 1.3 trillion assets under management. Remember many of these banks are deeply interconnected and a crisis at one can spread like wildfire.

The surging dollar, stock crash, and bond market chaos are all indicating that something is about to seriously break and a major bank, possibly two, going under could be the straw that breaks the camel’s back. For reference, Deutsche and Suisse are 3-4X bigger than Lehman Brothers. 

The question about these banks becomes whether they are too big to fail? Or even whether they are too big to bail out? 

Bonds In Bad Shape 

Bonds have seen their biggest ever loss in market value. The current market crash is now worse than 2008. These are the kinds of losses that break things.

Remember last week when the UK was forced to intervene in bond markets to prevent pension funds from going bankrupt… yeah, that is the kind of bad we are talking about here.

This kind of dysfunction will likely be weighing heavy on markets for a while. We are still deep in the bear market, and things may get worse before they get better.

Be ready. And remember, crypto is not going to be doing anything exciting until we see all of the macro crazy resolve itself. 

QE Infinity 

The one thing that is becoming increasingly apparent in all of this crazy is the willingness of central banks to print truck tons of money!

Recent announcements out of the UK and China that they are once again intervening in markets is a big deal.

The UK has said it will do whatever it takes to protect the bond markets, and China is telling state banks to dump dollars and buy Yuan to prop up the currency.

In the end the only option is always the same one, print more. Now we just need the FED to hop on board the printing party. 

Solana Goes Down… Again…

Once again Solana has gone down.

Last Friday, Solana suffered yet another outage. This time due to a misconfigured node. This is the 4th outage this year.

No matter which way you put it, this is not awesome for Solana. While Solana’s massive scalability is impressive, it obviously comes at a price.

Meanwhile fast competitors like Polygon can keep the lights on… most of the time. Layer twos on Ethereum are also bringing in big scalability. 

Avalanche subnets will bring in big scalability. And, I suspect the next generation of new blockchains is being built. 

Ethereum Layer Twos Going Crazy 

Both Optimism and Arbitrum have flipped Avalanche in terms of the total number of transactions in September.

This is not necessarily an indictment against Avalanche, nor does it account for Avalanche’s subnet activity. But I found this chart shared by James Ho on Twitter very interesting because it really underlines how much Ethereum layer twos are starting to gain adoption. If you’re not sure which blockchain projects to invest in, take a look at the Blockchain section in my portfolio for some ideas!

This is how Ethereum scales, at least until sharding comes online. 

The Big Picture

Last week Facebook and Instagram announced that they are expanding access to NFTs on the platforms.

While markets may be rough. The truth is that big moves in terms of adoption continue to happen. While NFT volumes are down 97%, the tech is not going anywhere. Nor will the desire for people to buy them… in the future anyway.

The macro bear market has not been kind to NFTs, but adoption continues moving forward. Look where we are going, not where we are. 

In Case You Missed It by Rebecca

Crypto market news

Bitcoin difficulty drops for the first time in 2 months as miners sell 8,000 bitcoins. Source

MicroStrategy is recruiting a software engineer to help build a Bitcoin Lightning Network software-as-a-service (SaaS) platform. Source

Kim Kardashian is fined $1.26M by the US SEC for failing to disclose a $250K payment to promote EthereumMax. Source

Macro investor, Stanley Druckenmiller, sees a possible crypto “renaissance” as the global economy continues to struggle. Source

Mastercard will launch a new service, Crypto Secure, to help banks prevent fraud on crypto merchant platforms. Source

Cathie Wood’s ARK Investment has partnered with Eaglebrook to provide investment advisors with exposure to crypto assets. Source

Spain’s largest telecoms company, Telefonica, enables crypto payments via a partnership with crypto exchange, Bit2Me. Source

FTX is reportedly considering bailing out Celsius by bidding on its assets, just like they did with Voyager Digital. Source

FTX has listed an FTX Dollar Spot Index featuring a basket of four currencies against the US dollar, including the Euro, Japanese Yen, Canadian Dollar, and the British Pound. Source

NYDIG intends to raise $720M as revealed in an SEC filing, whilst its Bitcoin balance hits a new all-time high – up almost 100% year on year. Source

United Arab Emirates (UAE) Ministry of Economy has announced a new headquarters – in the Metaverse. Source

Crypto payments firm, Strike, raises $80M in a Series B funding round led by Ten31. Source

BlackRock launches a European ETF with exposure to 35 blockchain and crypto companies. Source

Google Web3 lead describes Google Cloud as a “Layer Zero” for crypto and believes in a decentralized, multi-chain future. Source

Facebook and Instagram enable its NFT integration feature for all US users. Source

Fidelity expands its crypto offering with a new Ethereum Index Fund. Source

Coinbase temporarily halted deposits and withdrawals from US bank accounts. Source

The Latin Grammy Awards has signed a three-year contract with Web3 platform, OneOf, to create award show-related NFTs. Source

Coins and Projects

Lightning Labs has announced its initial code for the new Taro protocol, which will allow users to issue and transfer assets on the Bitcoin blockchain. Source

Tether has cut down its commercial paper holdings to less than $50M with plans to eventually reduce it to zero. Source

Binance registers as a financial service provider in New Zealand and opens a local office. Source

BNB Chain has announced 27 Web3 start-ups as winners from its accelerator program. Source

Vilalik Buterin in a blog post proposes ways to reduce Ethereum’s centralization but explains a “third party” is necessary. Source

T-Mobile parent company, Deutsche Telekom, has announced plans to launch an Ethereum validator to support ETH staking. Source

Ethereum wallet, MetaMask, launches a beta portfolio dApp for users to access assets from multiple accounts and networks. Source

Solana is back online after its latest outage which saw a misconfigured node stopping the blockchain from processing transactions. Source

Chainlink has partnered with Coinbase Cloud to launch pricing feeds for NFT floor prices. Source

Chainlink has partnered with the international messaging system, SWIFT, on a proof-of-concept project, allowing traditional finance to transact via the blockchain. Source

Nexo wallet address withdraws $153M in Wrapped BTC from MakerDAO. Source

Polkadot is set to increase its transaction speeds by 10x with new updates that will be ready for deployment on Kusama by the end of 2022. Source

Uniswap is looking to put together a fundraising round to raise between $100M and $200M. Source

Celsius is facing action from the US Department of Justice (DoJ) as they object to a motion to reopen withdrawals for customers. Source

Celsius Founder and CEO, Alex Mashinsky, allegedly withdrew $10M from the platform just weeks before the company froze customer withdrawals. Source

Juno raises $18M in a Series A funding round including Coinbase, Messari, and Polygon, with aims to launch its loyalty coin, JCOIN. Source

Theta’s v3.4.0 upgrade goes live to introduce a wrapped version of the Theta token, wTHETA. Source

Wintermute’s hack has been replicated on a standard MacBook laptop in under 48 hours by exploiting Profanity flaw. Source

Gnosis Safe has announced the launch of SafeDAO and Safe token, with a 50M token airdrop to decentralize the community. Source

OpenSea has added support for Optimism and has listed four NFT collections from the network. Source

OpenSea has partnered with US record label Warner Music Group to help engage music fans with NFT collections. Source

Hugo Boss is to launch a metaverse experience in collaboration with the NFT collection, Imaginary Ones. Source

Macro news

The Bank of England steps in to save pension funds from collapsing, raising hopes a Fed pivot will come sooner rather than later. Source

Trouble could be brewing for European banks such as Credit Suisse and Deutsche Bank, as they show signs of weakness amid the liquidity crisis. Source

US Fed confirms its potential USDC would not be anonymous but would provide a balance between privacy protection and user identity. Source

US Commodity Futures Trading Commission (CFTC) Chairman, Rostin Behnam, says Bitcoin could double in price with its regulation. Source

US legislation aims to expand the crypto assets that 401k’s can hold and is backed by three Republicans. Source

Russia plans to let any industry in the country accept bitcoin and crypto as payment for international trade without restrictions. Source

The European Central Bank (ECB) says a Euro CBDC will not be used for commercial purposes, in a statement from Christine Lagarde. Source

The Bank of International Settlements (BIS) calls its CBDC pilot a success with $22M transacted in Hong Kong, the UAE, and China. Source

Central Banks of Israel, Norway, and Sweden are to work together to explore a retail CBDC in a project run by the Bank for International Settlements. Source

Argentina’s state-owned energy company ventures into crypto mining by supplying power to an undisclosed international crypto mining company. SourceFollow Rebecca on Twitter and Instagram.

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Market Analysis by Rekt Capital

In today’s newsletter, we’ll discuss:

• Bitcoin Dominance
• The Altcoin Index
• Chiliz (CHZ)
• Ethereum Classic (ETC)
• Chainlink (LINK)
• Elrond (EGLD)

Bitcoin Dominance Update

Here’s the Weekly chart for Bitcoin Dominance.

If BTC.D is able to Weekly Close above the blue level and reclaim it as support, then BTC.D has a good a chance of climbing towards the red resistance above.

In the event that this occurs, Altcoins will underperform.

However, it’s not clear whether BTC will over- or underperform; this metric simply shows that Bitcoin as an asset will become more dominant compared to other assets in the space.

So in the case that BTC breaks out, investors may buy into BTC to chase the uptrend, but conversely if BTC breaks down then investors will panic sell their Altcoins into BTC.

These are two scenarios that would attract a dominance from market participants.

Bitcoin Dominance is generally useful in timing exposure to Altcoins; with BTC.D this low in terms of %, there are seldom moments/windows where Altcoins could outperform the market, unless there is a decline in BTC.D.

In any case, if BTC.D isn’t able to reclaim the blue level as support, then BTC.D would more likely follow the purple pathway towards the downside.

Let’s take a look at the Monthly timeframe for Bitcoin Dominance:

The Monthly showcases that if BTC.D were to Monthly Close above blu, just like it did in early 2022, then BTC.D could retest blue next month before enjoying further upside.

So if BTC.D experiences a small lift this month, only insofar to secure a Monthly Close this October, then in November there’d be a small dip in BTC.D before trend acceleration to the upside.

In this scenario, I would keep Altcoin exposure to a minimum as only the dip into the blue level would open up a possibility for some Altcoin movement.

So this sort of analysis informs Altcoin strategy to short-term, scalp trading if anything.

But it also showcases the following:

If BTC.D isn’t going to make much of a gain this month, then this month may not be very interesting in terms of Bitcoin’s overall price.

Next month however, if BTC.D successfully retests the blue level as support, BTC.D would launch into an uptrend, in which case we’d probably see a lot of volatility in BTC’s price.

Monthly Close below blue however and there’s probably be a rejection.

What could this rejection enable on ALTPERP?

In the event that BTC.D rejects, ALTPERP could be able to climb above the green level; if a reclaim of green as support occurs then ALTPERP would be set for a move towards the red circle.

Watching a declining BTC.D in tandem with this ALTPERP chart would give insight into how likely a move up in ALTPERP is.

If a dip in BTC.D is small, then ALTPERP may not be able to break the green resistance, for example, in which case ALTPERP would be sentenced to this current orange-green range where not much is going on.

But when BTC.D climbs higher, then ALTPERP could actually drop into the orange level.

Ethereum Classic and Chiliz (ETC and CHZ)

ETC was one of the top performers a few months back and I suggested that it wouldn’t break its macro downtrend.

ETC indeed failed to break it and has retraced over -20% since.

ETC will soon retest the green level as support and if successful, would be able to challenge the red diagonal once again.

On the monthly timeframe, downside wicks below the green level would be fine, as long as the close occurs above green. Weekly Closes above green would be fine also.

Lose green as support however and ETC would breakdown into the green-green range.

But the reason I mention ETC is that it acts well as a potentially leading indicator for other coins, specifically CHZ.

CHZ also hasn’t been able to break its downtrend, something I’d also discussed earlier, just by simply inferring such bearish consequences from a similar-looking ETC.

On this rejection, CHZ may now revisit the orange level for a retest; successful retest there and a revisit of the red diagonal could be on the cards.

Breakdown from orange however and CHZ could revisit the green-orange range for further consolidation.

Again, ETC could be useful in informing CHZ going forward; with ETC near its green support now and CHZ lagging behind and not yet at its orange support, chances are CHZ could dip more from here as a result so that the differences between ETC and CHZ resynchronise.

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Final Notes

Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.

If you are reading this it means you are on the free version of the Wealth Mastery Investor Report, which is great for news and tips on the crypto markets.

If you really want to take advantage of fastest growing asset class EVER, I highly recommend you join us in the Premium Investor Report.

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• Deep dive Altcoin report & The Trending Coin Report
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See you next time!

Lark and the Wealth Mastery Team

Legal Disclaimer

TCL Publishing ltd (director Lark Davis, owner of Wealth Mastery) is not providing you individually tailored investment advice. Nor is TCL Publishing registered to provide investment advice, is not a financial adviser, and is not a broker-dealer. The material provided is for educational purposes only. TCL Publishing 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.