The Banking Crisis, Stablecoin Update, Bitcoin Dominance & The Latest News
In This Issue
- I share my thoughts on the state of the market, banking crisis, stablecoin update, altcoin alpha & the Myria airdrop.
- REKT has a TA report on Bitcoin dominance.
- Rebecca breaks down the latest news.
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What’s On My Mind by Lark
The State of the Market
Well… things definitely aren’t boring anymore. Crazy to think how bad sentiment was in November for crypto, and how dead crypto was in December. Well, not anymore.
Bitcoin has put in a rather interesting retest of the 2017 all-time high, the 200-day moving average, and the dominant downtrend line… all at the same time! That is not something you will see very often in markets.
One notable thing about Bitcoin pumps in 2023 is that altcoins usually follow pretty close behind. The structure of the market is changing and things are moving more in tandem versus the old days when Bitcoin could have a huge rally all by itself with altcoins moving only weeks later.
The inflation data for February this week has shown another drop in inflation down from 6.4% to 6% now. We continue to trend in the right direction. This is positive for markets. All eyes now are going to be on the FED’s big meeting next week. How will they react to falling bond yields, the banking crisis, and inflation continuing to cool?
The market is betting on the following:
- 0.5% rate hike – near 0% chance
- 0.25% – 60% chance
- 0% rate hike, AKA pausing rate hikes – comes in at a 40% chance.
Banking Crisis
As you are surely well aware 3 banks have collapsed in the last two weeks: Silvergate, Silicon Valley Bank, and Signature. These also happened to be 3 of the most used banks by crypto companies. Signature may be the craziest story because it was not on the brink of collapse it seems, the New York regulators just shut it down because “crypto is toxic”. WTF?
Operation Chokepoint 2.0 which seeks to unbank crypto companies has been moving ahead with apparent success. The White House has been seeking to strangle crypto by making it harder for people to get money into the market by attacking fiat ramps.
Banking stocks have been destroyed this week. Trading was halted for a huge number of US bank stocks with some losing 70% in a single day. European bank stocks are also getting hit badly. Credit Suisse is on the verge of collapse… again…
The question with Credit Suisse is now only, will they be bailed out, because they are too big to fail.
Anyway, that is just a small part of the story, because the big thing is that the FED has said it will backstop ALL money held by depositors in US banks. Where will that money come from? The same place it always does.
Still, though, this is pretty massive what is happening. The FED is basically adding liquidity back into markets. Remember China, the UK, Japan, and others have been too. Global liquidity likely bottomed in November and will be starting a new cycle now. This is good for risk assets. Although keep in mind that we could still see some really strong turbulence in the equity markets if more banks go under. Crypto may not be immune from that.
Stablecoin Update
In a pretty shocking turn of events, the stablecoin market went from being totally screwed to being totally fine within 48 hours. The SVB collapse spooked markets big time and USDC and other stablecoins partially backed by USDC like DAI and FRAX went about 10% off peg.
Once the FED announced that they would insure all deposits at banks the stablecoins repegged. USDC now is 100% fully backed once again.
In light of this information, I will stay in my USDC position and continue to use it as a stablecoin. I neither bought nor sold USDC during the depeg event. I just waited it out. And while I initially thought I would swap it for USDT once it got back to peg, I have reconsidered since USDC now has 100% of its funds returned.
Altcoin Alpha
- Rocket Pool Atlas upgrade coming in April will introduce 8ETH minipools to lower the barrier to entry and will bring a 40% reduction in gas fees. Plus the Ethereum Shanghai Upgrade could kick off some movement for the liquid staking coins.
- Radiant V2 is launching any day now. It will expand the protocol to BNB chain, bring in new assets, and reduce emissions of RDNT.
- Trader Joe is now live on BNB chain. There are lots of good-looking pools across the platform right now.
- Maker Dao is proposing to put another 750 million into US government bonds. Which would bring their total to 1.25 billion. Stablecoins backed by government bonds are certainly an interesting idea. Just a blue chip DeFi coin doing blue chip stuff.
- Spirit Swap, one of Fantom’s top applications, is bringing out Spirit V3 “soon” which will bring in concentrated liquidity.
- Balancer will be deployed on Avalanche. Balancer is a DeFi OG, but definitely does not get the attention that other protocols do.
- Shiba Inu’s Shibarium is now live for beta testers. Unsure if this will move the needle for SHIB, but it is nice to really see them deliver on being more than just a meme coin.
- Synthetic V3 launching “soon” will bring in more collateral assets and hopefully more adoption for the protocol.
- Cult is launching their mainnet potentially by the end of the month.
- Apecoin will have a second trip to the Otherside on March 25th. Not sure if that will stir some hype for APE, but worth watching.
Myria Airdrop
Myria is a layer two gaming ecosystem with over a million registered users and more than 250 games. They are launching their token soon and are doing a small airdrop to kick things off. You can try to get some tokens by following the steps here https://gleam.io/VhdLo/20000-myria-token-airdrop
Market Analysis by Rekt Capital
In today’s newsletter, I will briefly discuss Bitcoin Dominance in the context of the Altcoin Market.
Then, I will cover 5 Altcoins, specifically:
- Dusk Network (DUSK)
- Woo Network (WOO)
- SushiSwap (SUSHI)
- Polygon (MATIC)
- Chainlink (LINK)
Let’s dive in.
Bitcoin Dominance
When it comes to Bitcoin’s current price action, Bitcoin is currently hovering just below the Macro Downtrend:
When it comes to Bitcoin Dominance, BTC DOM is also hovering below a key resistance level:
For both Bitcoin’s price and Bitcoin Dominance, key resistance stand in the way.
Breaching them will of course enable upside for both.
And judging how the price breakout on Bitcoin as of late has impacted Altcoins, a breakout beyond the Macro Downtrend may be difficult for Altcoin valuations.
The Money Flow chart shows this well — a Bitcoin breakout would attract money flow into BTC, away from Altcoins until BTC stalls and facilitates money flow elsewhere.
(By the way, next week in the Rekt Capital Deep Dives we’ll be looking into Money Flow Cycles in a lot of detail so sign up if you haven’t yet!)
However, there hasn’t been a Bitcoin price or Bitcoin Dominance breakout on either yet.
But if BTC.DOM breaks the Black Wedge Top, it will exit a pattern that has been a home to BTC DOM consolidation since May 2021.
And a breakout would see BTC DOM rise to at least the red resistance area above.
Which would be difficult for most Altcoins, most likely:
For Bitcoin Dominance to confirm a breakout, it would need to Monthly Close beyond the Black Wedge Top.
Because in the past, upside wicks have occurred beyond this Black Wedge Top, only to precede downside. And downside in Bitcoin Dominance is really good for Altcoins.
So will Bitcoin Dominance confirm a breakout via a Monthly Close beyond the Black Wedge Top to essentially confirm a new Bitcoin Dominance Uptrend?
If so, Altcoins may struggle to keep up, though major Altcoins like ETH or LTC may actually be able to follow suit — the smaller Altcoins could struggle, at least in the immediate aftermath of the Bitcoin breakout because BTC dips or ranges will facilitate money flow into Altcoins.
However if BTC Dominance fails to break this Monthly Black Wedge Top resistance, then a rejection in Bitcoin Dominance could occur, which would enable money flow into Altcoins and likely facilitate the proposed price pathways featured in today’s Altcoin Update, featuring Altcoins like DUSK, MATIC, WOO, LINK, and SUSHI.
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In Case You Missed It by Rebecca
Crypto market news
Crypto bull run may have already started according to the CEO of One River Digital Asset Management. Source
Silvergate Capital will voluntarily liquidate its assets and cease operations. Source
Coinbase is set to launch a new “wallet as a service” business allowing companies to customize blockchain wallets for their own customers. Source
Ark Invest has bought more Coinbase and Robinhood stock adding $3.44M and $9.97M respectively. Source
CFTC chair suggests Ethereum and stablecoins are commodities and not securities. Source
Coinbase has confirmed its staking services will continue despite the crackdown from the SEC. Source
Signature Bank was shut down on Sunday by the Fed but all depositors will get their money back. Source
Nissan has filed 4 new Web3 trademarks and will experiment with selling cars in the metaverse. Source
Meta is scrapping its NFT features across Facebook and Instagram just 10 months after it first launched. Source
Coinbase has announced it will be adding Uniswap and Aave to its L2 network, Base. Source
Natwest Bank has introduced limits on crypto transfers in the UK, allowing a max. of £5,000 per 30 days and no more than £1,000 to exchanges within a day. Source
Coins and Projects
BitMEX co-founder Arthur Hayes has proposed a Bitcoin-based stablecoin independent of the US Dollar and instead pegged to $1 worth of Bitcoin. Source
Perth Heat, the Australian baseball team, has partnered with Bitrefill, Wallet of Satoshi, and IBEX to reward fans in bitcoin every time a player steals a base or hits a home run. Source
Ethereum developers are set to deploy the Shapella upgrade on the Goerli testnet as scheduled on March 14. Source
USDC stablecoin depegs to 87 cents after Circle confirmed its $3.3B in exposure to the failed Silicon Valley Bank. Source
9 out of the top 10 stablecoins are trading below the pegs as the USDC contagion spreads. Source
Circle plans to use “corporate resources” to cover the shortfall on its reserves following Silicon Valley Bank’s shutdown. Source
Circle has announced Cross River as its new banking partner after Silicon Valley Bank’s collapse and has expanded its relationship with BNY Mellon. Source
DeFi protocol Maverick has unveiled its Uniswap rival DEX on Ethereum. Source
Web3 email solution EtherMail has raised $4M in a funding round led by Tim Draper and his venture firm, Draper Associates. Source
Euler Finance, an Ethereum-based noncustodial lending protocol has been hacked for $195M in a flash loan attack. Source
Optimism has seen Coinbase Wallet launch its first-ever quest on the network, rewarding users with OP tokens for completing tasks such as swapping, delegating, and staking. Source
Binance has added support for the Polygon network on its NFT marketplace. Source
Binance has used funds from its Industry Recovery Initiative Fund to convert $1B worth of BUSD stablecoin to Bitcoin, ETH, BNB, and other tokens to support the market. Source
Binance has suspended GBP deposits and withdrawals for new users from March 13 and will stop these services to existing users by May 22. Source
Solana-based digital fine art marketplace Exchange.Art is launching a generative art NFT platform. Source
Aave has frozen stablecoin trading and set the loan-to-value ratio to zero after the series of stablecoin depeggings. Source
Avalanche has partnered with TSM and Blitz, two leading gaming companies, to build an Avalanche subnet with the AVAX token used for gas. Source
Avalanche has become the blockchain of choice for Japanese gaming company GREE’s push into Web3 development, distribution, NFTs, and running 12+ Avalanche validators. Source
Uniswap v3 will become open-source and free to use after its business license expires on April 1. Source
Uniswap has announced it had its highest daily volume ever on March 11—totaling $11.84B. Source
Polygon Labs has partnered with Unstoppable Domains to allow users to use “.polygon” domains for logging into Web3 applications. Source
Cosmos’ community has approved a vote to add replicated security to its chain in a much-awaited update due to go live on March 15, with the v9 Lamba upgrade. Source
Shiba Inu has launched its Layer 2 network Shibarium in public beta mode. Source
Filecoin Virtual Machine upgrade is set to go live on March 14 to introduce smart contracts and allow developers to design dApps on the network. Source
Immutable has partnered with Mineloader, a game developer, to build a Web3 2023 version of Guild of Guardians. Source
Matchday, a Web3 soccer game startup, has raised $21M in a funding round including soccer player Lionel Messi’s venture capital firm. Source
Proven, a ZK crypto start-up has raised $15.8M in a funding round, led by Framework Ventures. Source
OpenSea has reportedly patched a vulnerability that if exploited, could have exposed users’ identification information. Source
Tassat blockchain will provide an API to the Fed’s real-time payment system, FedNow. Source
Macro news
US inflation rose by 0.4% month-on-month in February and was up 6% year-on-year. Source
Silicon Valley Bank has collapsed making it the second-largest bank failure in US history and the largest since 2008. Source
The US Treasury, the FDIC, and the Fed will guarantee all deposits at Silicon Valley Bank and customers will be able to access the funds from March 13. Source
HSBC has acquired the UK’s arm of Silicon Valley Bank for £1. Source
President Biden’s new budget plan will include policies to close tax loss harvesting on crypto transactions. Source
The US economy added 311K jobs in February, beating expectations and the unemployment rate rose to 3.6%. Source
Elon Musk has said Twitter has the potential to “become the biggest financial institution in the world, just by providing people with convenient payment options.” Source
The Inverse Jim Cramer ETF has outperformed the S&P500 in its first week of trading. Source
WeChat has added China’s CBDC, the digital yuan, to its payment services. Source
Perth Mint sold $9B in diluted gold to China, got caught, and then tried to cover it up. Source
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Final Notes
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Lark and the Wealth Mastery Team
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