Enter through the Gate and into the Courtyard

The market continues to hold bullish sentiment for crypto after rebuffing several regulatory attacks along with an uncertain CPI print. So let’s get straight into it 👇️ 

👀 What’s to Come in Volume 4

• 🔑 Key News: Stablecoin, Staking & Regulatory FUD, Exploits, Continued Adoption, DeFi Updates, New Projects & more from CJ

• 🔥 Hot Narratives: Decentralised Stablecoins to Save Us?, Casinos Profit from Superbowl, BSC DeFi Brushes off FUD, and NFT Marketplaces back in the Spotlight

• 📈 Macro Outlook: Simplified Round-up and Implications on the Macro and Options Landscape from Hansolar

• 📉 HTF Price Action Scenarios: ETH in LTF Limbo from Vlad

• 💰 Trade Wins: ROUL Blasts all else out the Water, plus a PSI Entry

• ⛓ On-Chain Sleuthing: JPEG’d Becoming CVX Whale, STFX Accumulation, and DigitsDAO LPs BLUR

🔑 Key News

This week has been filled with ups and downs after a myriad of news flooded the markets, causing major volatility. Former 3AC founders Kyle Davies and Su Zhu completed their raise and launched Open Exchange while Genesis and DCG come to a settlement with main creditors.

The FUD

Australia shares crypto regulation plans, Binance suspending USD bank transfers for certain individuals, Dubai banning privacy coins, Superbowl also bans crypto commercials, Kraken charged by the SEC for its staking services, and Paxos under investigation by regulators

Exploits

• Sperax’s CDP was exploited but funds were returned as they managed to identify the culprit

• Webaverse lost $4M to scam, an exploit on CowSwap’s contracts costs $150k, Umami CEO dumping his tokens on the market, and DForce exploited for $3.65M

Adoption is not stopping!

Polygon announces partnership with Doritos, Visa began testing crypto payments, Binance launches tax calculating tools, Louis Vuitton launching NFTs, WeTransfer enters the NFT space, BoE launches CBDC project, Coingecko and 21shares partner to release “Global Crypto Classification Standard”, AptosLabs backing Tiktok competitor Chingari, Sandbox partners with Saudi government, Mysten Labs partnering with Tencent, and China announces their blockchain research centre

Weekly DeFi Updates

Telegram’s TON blockchain announces $20M incentive program while MetisDAO and Stellar also launches their grants program, Dopex going to Polygon, Huobi listed DebtDAO’s FUD(FTX Debt) token, TraderJoe x LayerZero partnership to turn $JOE into an omnichain token, Lido updates on their v2 model, ENS DAO to sell $16.5M of ETH, Chiliz announcing their Layer 1, Euler and Uniswap coming to BSC, MakerDAO contributors launching an Aave fork called Spark Protocol, Aave’s GHO stablecoin is live on testnet, and Optimism airdrop 2 went live.

Some interesting projects to look out for:

• DarkFi: Privacy-focused POS L1 based on zk, mpc and encryption

• Spark Protocol: MakerDAO Aave fork

• GHO: Aave’s stablecoin

• Oasis Swap: Dex from TridentDAO on Arbitrum

• Ordx: Ordinals NFT marketplace on Bitcoin

• FlidoFi: Upfront yields on stETH

• Sector Finance: Risk-adjusted vaults

• Flux Finance: Lending protocol from Ondo Finance

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

🔥 Hot Narratives

Time to Shine for Decentralised Stablecoins?

After the SEC served Paxos (BUSD issuer) a Wells Notice (intent to sue), and the following uncertainty around if USDC is next, it might just be time for Decentralised Stablecoin season. LQTY, the fee-sharing token for LUSD (one of the largest decentralised stablecoins), moved +20% this week on the news. Other smaller tokens to watch out for are Ethos Reserve ($OATH) and Volta Finance ($VOLTA) - both collateralised debt position (CDP) type stables (think MKR/DAI) but with new-age collateral assets and flywheels built-in (both mentioned in the Chronicle last week pre stablecoin FUD?!).

Casinos Strong Amidst Superbowl Hype

Casinos and Gambling continue to be in the spotlight, especially with the Superbowl a few days ago. Many platforms hit all-time highs (ATHs) in terms of volume and fees for the event. To highlight, RLB continues to be bid hard with long wicks down repeatedly, THALES enters the narrative on CT with their Overtime Markets AMM, and ROUL makes huge strides blasting its FDV into the mid-7-figures (also with an NFT mint today). To top it all off, we even had DegenSpartan confirm the narrative we've been following since Chronicle inception ✅ 

BSC DeFi Brushes off FUD

As expected, due to the BUSD FUD, we saw some volatility on BSC DeFi pairs that we are watching. Although the entire market looks to have stabilised, with this sector also bounding back to previous levels if not higher. Level Finance continues to lower emissions schedules whilst new large investors keep entering it at consecutively higher prices. Thena on the other hand has been much more quiet price action-wise - watch out for the massive token burn today though…

NFT Platform Shake Up

With the 2nd airdrop of BLUR yesterday, there has been lots of action at NFT marketplaces this week after Magic Eden lay off several members of the team. It looks like BLUR is catching quite the bid after the early sell-off - will they kick on to dominate the entire market?

📈 Macro Outlook

Past Week Events

• 02-07 17:30 UTC: Powell Speaks

  • Markets seem to be getting less sensitive to Powell’s statements. Currently, he seems cautiously optimistic on a soft landing.

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

  • Came in at 196k, close to forecasts.

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

  • Higher bearish; lower bullish

Upcoming Events

• 02-15 13:30 UTC: Core Retail Sales (MoM forecast: 0.8%, previous -1.1%)

• 02-16 13:30 UTC: Jobless Claims (forecast: 202k, previous 196k)

• 02-23 13:30 UTC: GDP Q4 (forecast: 2.9%, previous 2.9%)

• 02-24 13:30 UTC: Core PCE (MoM forecast: 0.3%, previous 0.3%)

BTC and Macro

Up until last week, BTC and crypto markets have been tightly coupled with the equities markets. However, US regulators have been on the offensive since last Thursday, fining Kraken $30m for offering the ETH staking service and requesting Paxos to stop issuing BUSD. The potentially wide-ranging implications of this action sparked a marked bearish reaction in the markets. Another macro indicator to keep an eye on is the Japanese bond yields. JP10Y is at the 0.5% ceiling once again and with the change of the BOJ head, there may be further hawkish policy changes ahead.

Options Markets

Short-term rolling IVs on both ETH and BTC have been curling upwards again in anticipation of CPI volatility. Now that we’ve escaped the volatility draught season earlier this year, shorting vol has become relatively more attractive once again. Also with the Ethereum Shanghai hard fork 1 month away, it could be a good time to start getting into option positions before the rest of the crowd.

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

📉 HTF Price Action Scenarios

What a wild week! Let’s waste no time and hop right into charts because important stuff is happening imho.

Let’s do a top-down again to remind ourselves where we’re at.

• The weekly is showing us clear order flow to the downside

• It has been going sideways for a while now, therefore we can anticipate some kind of accumulation/redistribution going on

• We’re currently in a bearish trend so we anticipate re-distributions!

• Very often some local highs will be formed in such ranges which will later be liquidated before reversing back short

The daily chart is interacting with its supply right now. In downtrends, supply zones tend to hold. Therefore, we are looking for weakness in the LTF trend that leads price into the supply zone. For this purpose, I have been using the 10h chart as it painted a clear picture to me.

This entire push is being held by the 10H demand zone. Price tested it several times and has now broken through it.

For now, it’s just the 1st break which could have the objective of simply grabbing more liquidity. But once we get a pullback and another break I will start looking for shorts.

The plan is simple:

• Green scenario for me to be bullish again

• Red scenario for me to be bearish

Now it’s still just limbo and range shenanigans. I am sitting on my hands and waiting for more directional clues. Excited to see what’s it gonna be!

Remember HTF > LTF. Eventually, we’ll get some LTF bullishness which will transform into a HTF bullish reversal. It could be this push but it could also not be this push. And since HTF is bearish now our chances are much better with the shorts.

See y’all next week

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

💰 Member Trade Wins

Tano Making Bank on ROUL

LivingDeFi Buys Pizza for Anons on Twitter after LPing ROUL

CJ Aping PSI on Whale Dump

⛓ On-Chain Sleuthing

JPEG’d En-Route to Become Convex Whale

JPEG’d protocol has lately been swapping its own token ($JPEG) to accumulate more $CVX tokens. Since the beginning of January, the price of $JPEG has grown by more than 250% & the team leading the protocol has used this price action to grow its Convex position. JPEG holds more than 1 million $CVX which moves the NFTfi protocol to the 7th largest holder of $CVX.

Nounvestment Co-Founder Accumulates 1% of STFX Supply

The prominent CT figure has been buying STFX directly from the open market, swapping out some of their $ALCX position for $STFX. The funds then move over to a Gnosis Safe from the trade wallet. It seems they are also bullish on Pendle, Alchemix, and Yearn 🤔

Digits DAO Takes Advantage of BLUR Trading Volume

Post-BLUR airdrop yesterday, Digits DAO immediately opened an LP position that has been absolutely printing fees due to the high trading volume. Check out the position here on Revert. In just 12 hours, the position has made over $40k in fees, with a loss of $16.5k from Impermanent Loss. See total PnL below.

Research and analysis from Cl, Shogun, CJ & Atomist

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Virtually yours,

Atomist & The Castle