Another week on and charts continue to catch bids as sidelined bears still coping. Let’s get straight into the details 👇️ 

👀 What’s to Come in Volume 3

• 🔑 Key News: Continued Adoption, Project Updates, NFT News, New Projects & more from CJ

• 🔥 Hot Narratives: BSC DeFi Gathers Momentum, Casinos Cooldown, & Canto Season Upon Us?

• 💹 Macro Outlook: Simplified Round-up on Macro and the Options Market from Hansolar

• 📈 Price Action Scenarios: Bullish until invalidated in the eyes of Vlad

• 🏰 Castle Positioning & Risk: Talking Strategy

• 💰 Trade Wins: GRAIL, CANTO & VELA Feature

• ⛓ On-Chain Sleuthing: ARCA Accumulating GMX & Various Influencers Pumping and Quietly Exiting

🔑 Key News

• A wide variety of news happening across the crypto markets this week, including Amazon announcing their NFT initiative, Mastercard & Binance partner up to launch a prepaid card in Brazil, California issuing vehicle titles as NFTs on Tezos, Pharma giant Pfizer invests in VitaDAO, Premier League partners with SoRare for their upcoming NFT Game, Hamilton Lane tokenizing their fund, Digital Sterling bond pilot went live and India’s Reliance accepting CBDCs

• Even with the above, Ark’s ETF was rejected again by the SEC while the Fed released some crypto guidelines for banks.

• Some notable project updates include Aave v3 live on ETH, Friktion Labs shutting down, CSR enabled on Canto, Gala Games updating their tokenomics, BUSD makes its way to Cosmos, Sudoswap finally updates on its upcoming airdrop, ImmutableX reveals their all-in-one passport, BNB releases their whitepaper for BNB Greenfield, and finally, Stargate Finance will be reissuing tokens

• Some NFT/GameFi-related news: Axie Infinity holders can now take out loans against their in-game assets, while CoolCats announced they were going to be customizable and moving multichain.

• There was also some debate about the future of Secret Network after some allegations of the founder made their way to Twitter.

Given that Blur token is going live on Valentine’s, Huobi has already announced that they’re listing BLUR. NFT-related tokens might go for a run following both Blur and the recent Sudoswap news (eg Looks, x2y2 etc). With regards to new projects, lots of rugs are launching on Arbitrum specifically and the recent largest rug was worth $320k by an Ohm-fork called Orion so I suggest absolute caution - here are some to watch regardless:

• Atomica: Insurance cover protocol with concentrated liquidity pools. Similar to Carapace.

• Sygma: Crosschain infrastructure protocol Formerly ChainBridge, uses generic message passing, EVM and Substrate (Polkadot) and Cosmos compatible.

• Volta Protocol & Ethos Reserve: Both QiDao (MAI) forks. Volta - CDP called VOLT, users can use gDAI / voltGNS (GainsTrade tokens) to mint the stablecoin, they're launching on Arbitrum. Ethos - CDP called ERN, ties together with OATH from Byte Masons. Issuance and redemptions fees go back to OATH stakers (real yield). Collateral wise not disclosed but will be a pool of different assets.

Courtesy of CJ - check out his telegram channel for daily news, projects updates and new releases

🔥 Hot Narratives

BSC DeFi Gathers Momentum

Both our previous calls in Thena and Level have been performing strongly, not only in price action/chart structure but with the protocol metrics to match. Adoption of both protocols has been great and their tokenomics are working to their advantage as farmers look to be locking/restaking more than selling. As long as this adoption and usage growth continues we can expect price action to do the same. We’ll be watching the chain closely for new innovative protocols in categories that haven’t yet seen growth on BSC.

Online Casino Cooldown

Casino tokens across the board have seen some healthy retraces whilst retaining good chart structure. Hopefully, they can enter some nice accumulation ranges before continuing higher. The main discussion we seem to be having now is whether decentralised casinos are required for these types of users. Best to have coverage on both sides IMO — Rollbit (centralised with great revenue metrics), Risky.lol (decentralised with v2 around the corner), Betswirl (multichain, decentralised). The real winner token-wise will likely require not only great metrics but also great tokenomics — more on that next time.

Canto Season

Canto has seen a huge uptick in activity over the past couple of weeks — so much so the chain and explorers have been struggling. To highlight the chain’s influence, Parsec recently released their dashboard for NFT tracking and analysis, and Adam Cochran posted about the first OHM fork on Canto called Cantohm. NFTs have been the bulk of the activity (e.g. Longnecks), but seem to be taking a breather, together with Canto’s price. There’s been a ton of rugs starting to appear on Canto, and cashgrab NFTs so be wary. Congrats to those farming since day one — hope you have been TPing. We’ll be watching closely for real DeFi applications to arise — this is hampered by the lack of a Chainlink oracle, to which some are proposing to use CoinGecko’s API, likely resulting in disaster. The two known VCs that bought into Canto are Variant Fund and Cumberland.

📈 Macro Outlook

Past Week Events

• 01-27 : Core PCE (Dec) : Came in as expected. Led to bullish continuation. (PCE is usually fairly predictable)

• 02-02 : ISM Manfacturing PMI : Lowest since financial crisis.

• 02-02 : FOMC Interest Rate Decision : 0.25% as expected, resulting in a strong impulse up.

• 02-03 : Non-Farm Payroll : Surprisingly strong labor market numbers led to a negative reactions from the market.

Upcoming Events

• 02-07 17:30 UTC : Powell Speaks

• 02-09 13:30 UTC : Initial Jobless Claims(forecast: 194k, previous: 183k)

• 02-14 13:30 UTC : CPI (MoM forecast: 0.3%, previous 0.3%)

• 02-15 13:30 UTC : Core Retail Sales (MoM forecast: -0.4%, previous -1.1%)

BTC and Macro

BTC still following the equities market quite tightly and has yet to see decoupling from traditional markets. There seems to be chatter about side-lined capital getting anxious that they missed the bottom and are trying to get back into position; eg AAPL’s drop from its earning miss recovering after a few hours. However, another asset to watch out for is gold. A recent frontrunner in the rebound has suddenly sold off over 3% in the past week.

Options Markets

Although implied volatilities (IVs) are now elevated to more historical norms (50s for BTC, 60s for ETH), BTC’s implied volatility on shorter-term maturities are now being discounted heavily again (1 month IV is much lower than 3 month IV). This means the options market is more confident in predicting the volatility in the short term vs the long term. ETH however is showing elevated IVs for all tenors (length of time before a contract expiry). The recent strength in ETH relative to BTC may be causing the higher pricing of IV in the near term. It may also be caused due to increased volatility expectations from the Shanghai fork in March.

If any of this confused you, read more about options here and check out the TG chat below where I post daily updates on the options markets.

Courtesy of Hansolar - check out his telegram chat for all things options, crypto and DeFi

📉 Price Action Scenarios

Hello, frens! Another week is in and what a week it has been! The sideways price action of ETH has given many altcoins room to grow and there have been some beautiful runners providing opportunities for profits! But as for ETH itself, nothing has really changed from last week.

Here is what I am looking at - price is still consolidating in this range that is supported by the 10H demand.

It is important to remember that on the high timeframe (HTF) we are still in a bearish range, therefore any push to the upside is considered a relief rally with the purpose of distribution before more downside. So we should always keep this in mind in order to be ready to switch our bias short once we see weakness in the lower timeframe uptrend.

That being said right now we are trending up and we should follow it. It is therefore logical to anticipate a trend continuation until invalidated.

My expectation, therefore, is a bullish continuation. I expect price to either leave this range right away or play around a little, perhaps grabbing some liquidity on the lower extremes of the range before continuing up. If this bullish idea should manifest, I will target 2k$ ETH in the coming weeks.

I will therefore generate bullish ideas for now but once again - the moment I see weakness in this current trend I’ll hop onto shorts.

That’s it for this week! See ya next time

Courtesy of 0x_Vlad - trend-based trader and MentFX student

🏰 Castle Capital Positioning and Risk

With UpOnly on several narratives, each person needs to be mindful of their positioning based on their risk tolerance levels - this will be different for everyone.

At one end we have the bottom accumulatooors who will be holding their bags into the next bull (whenever we get there). On the other we have HTF bears taking regular profits and only betting this rally with smol size.

Each one of us must decide where we sit on this spectrum. For now, I’m pump enjoyooor until invalidated, taking profits from riskier swing plays into longer-term accumulation targets whilst keeping good exposure.

NFA

💰 Member Trade Wins

Blackeye Calls GRAIL Pre-Launch

CJ De-Risks CANTO After its Recent Surge

cryptopleb4 Swings PAW

Daviescene locks in VELA Profits

⛓ On-Chain Sleuthing

Arca Hedge Fund Accumulating GMX

ARCA has been accumulating GMX tokens since mid-December. This investment firm focuses on digital assets and now holds close to $1.6m of GMX staked. Interestingly, the same wallet holds $2.4m of MATIC & $500k of SYN.

AmirOrnu Calls 2 Influencer/Whale Pumps

Your Favourite GNS Whale Exiting through LP

A GNS whale and Twitter shill may be a permabull on the timeline but is actually exiting his GNS position. He is such a great community member in fact, that he is exiting through Uni V3 LP where he can concentrate liquidity in small ranges to ensure that as the price moves out of his range he is essentially selling GNS for the other pair (often at a loss due to the UpOnly price action). So far, according to revert.finance, he has incurred losses of nearly $350k through this strategy but finally has some stables at least. Don’t worry though, his GNS position is still over $10m.

CT Influencer Exits UMAMI Position around Large News Event

A well-known CT Influencer has fully exited their UMAMI position this week, with some sells coming before the news dropped that Umami would be pausing revenue sharing due to regulatory concerns. This anon has been fairly bearish for a while, but re-accumulated a full position in November. Through December and early January they were taking incremental profits with a large sell (half position size) just a day before the news was released, with the rest of the bag going the day after (post 35% drop). All of this was carried out on their ‘high conviction bag’ in pretty much dead silence, with a confirmation only coming after a comment on Twitter asked them 5 days later. Who can blame them though — UMAMI = 💀 

Research and analysis from Cl, AmirOrnu & Atomist

🧵 Castle Threads

Breaking down Mantle and some alpha by CJ

Thanks for reading, please give us a follow at Castle Capital and subscribe to The Castle Chronicle for an update each week!

Virtually yours,

Atomist & The Castle