Macro Update, Smart Money On-Chain & More
The Castle Chronicle: Volume 25
👀 What’s to Come in Volume 25
🔑 Key News: Headlines, Exploits, Continued Adoption, DeFi Updates, New Projects & more from CJ
🔥 Hot Narratives: Solana and DeFi 1.0 by unexployed
📈 Macro Outlook: Simplified Round-up and Implications from Hansolar
📉 HTF Price Action Scenarios from Vlad
⚔️ A Call to Arms
Think you have what it takes to enter the Castle and contribute to funding and advising projects across the space?
🔑 Key News
Major Crypto Headlines
Vietnam launches investigation into Pi cryptocurrency
Celsius Network moves $70 million of altcoins following the ruling it can swap to BTC and ETH
Nasdaq files for Valkyrie bitcoin ETF, lists Coinbase as surveillance sharing partner
Grayscale added LDO token to its DeFi fund
Coinbase CLO responds to SEC filing
Cboe reaches surveillance agreement with Coinbase for spot bitcoin ETFs
Useful Weekly DeFi Updates
MakerDAO's Spark Protocol going multichain
Pendle expanded to BSC
Pika Protocol v4 live on Optimism
Archway HQ airdrop went live
Blur launched v2
dYdX Launches Public Testnet on Cosmos
Nftperp closes v1 beta and gears for v2
Barn Bridge under SEC investigation
Redacted Cartel Hidden Hand v2 live
Avail Project Launches Data Attestation Bridge to Ethereum
Compound Finance introduced Encumber
Layerzero Labs Github update revealed $ZRO as gas fees
0xMantle proposal to fund $200M ecosystem fund
Cowswap introduces CoW Hooks
Linea starts rolling out Linea mainnet alpha release
AIP to deploy GHO on mainnet live
Proposal to activate veYFI rewards with oYFI gauges live
AlgoFi which represents over 50% of TVL in Algorand shutting down
Interesting New Projects
eBTC Protocol: Built by BadgerDAO team, eBTC backed by stETH
Dropbook: Airdrop tracking dashboard
Public Goods Network: L2 that works to create durable and recurring funding for public goods
Spacemesh: L1 launching soon
Tomcat Protocol: Convex for MAV tokens (Maverick Protocol)
Gas Hero: Game Fi project from Stepn creators
🔥 Hot Narratives
Potential SOL narrative
We are seeing more and more people speak up about SOL. After the flush of Alameda and FTX, the network has been somewhat in the gutter. Yet, there are a ton of interesting projects building on the network, most of them with a focus on trading (likely because of the network speed).
Best thing is, most of these projects have no token. So it is the perfect opportunity for people with little on-chain experience and a small portfolio to get in the tranches and grind it out. The network token is cheap and gas is close to free.
DeFi 1.0: the start of redemption arc?
Another sector within crypto that has been down bad: DeFi. And particularly the older and bigger DeFi projects.
Some would say DeFi is played out and that there is no interest as crypto users have turned to memecoins and gamblefi. Yet, DeFi is still one of the main pillars within crypto. An alternative financial system that can be used by anyone.
That being said, there are quite a lot of interesting developments happening over at DeFi 1.0. The $crvUSD stablecoin has been launched and is now well over 70mln in terms of supply.
And yesterday voting was opened for the AIP to launch GHO on mainnet, the stablecoin by Aave. Proposals like these are just a formality and are guaranteed to pass.
Both stablecoins are interesting as they are decentralized, censorship-resistant stablecoins and aim to take market share from the big players Circle and Tether. To us, these are signs that DeFi is consolidating and maturing.
Now, whether or not this will lead to a lot of green candles has to be seen, but for DeFi overall very good developments.
💹 Macro Outlook
7/12 Core Inflation / Inflation Rate
7/14 Consumer Sentiment
7/26 FED Interest Rate Decision
BTC, ETH, and Macro
The fast decline in the dollar index as well as bond yields and the returning upward trend from the SPX seem to be in anticipation of a lower-than-expected inflation number for July.
However, yearly inflation may be harder to get lower from this point going forward and may have even bottomed.
Nice chart from BofA showing how we are about to pass the peak of the disinflationary base effects.
With housing solid, employment strong, and wages still rising at 4.4% YoY... The easy part is over for disinflation. 9% to 4% was the easy part. 4% to 2% will probably be much… twitter.com/i/web/status/1…
— ʎllǝuuop ʇuǝɹq (@donnelly_brent)
Jul 11, 2023
FOMC decision is 2 weeks away, but people have already started talking about the September decision. The July rate hike currently has a 92% chance of a 25 basis point hike and the September implied probabilities are currently pointing towards a pause.
Indications of China’s slowing economy seem to be popping up more frequently as of late. Services PMI’s last Friday from 57 to 53.9 scared the markets. Also, this Monday inflation numbers came in at 0% despite lowering interest rates in the previous month. Further financial easing may be required to stimulate the economy.
JUST IN: China’s consumer inflation rate eases to zero in June.
Producer prices fell 5.4% in June, compared with a 4.6% drop in the previous month. Economists had expected a 5% decline.
— unusual_whales (@unusual_whales)
Jul 10, 2023
Crypto Options Markets
The general volatility regime is still very suppressed. 1 month BTC IV’s are currently in the low to mid-40s and are slightly lower for ETH still. An IV of 45 implies a 1-month price range of +or-12.9%. However, we are seeing some more bullish bets in the form of pure long volatility bets as well as large outright calls.
Short-term call spread targeting next week. $190k bet for a very short-term expiry.
Block-trade source: https://t.me/tradeparadigm
$2.9m long-tenor long ETH play
buy ETH-29MAR24-1900-C + sell ETH-29MAR24-2800-C
(However, this could also be interpreted as being slightly bearish ETH in the near term)
📈 HTF Price Action Scenarios
Last week it made sense to follow the LTF bullishness or to wait for a pullback into the daily demand zone.
Re-accumulation playing out
First daily demand zone tapped
Looking for long opportunities
This is a bullish market and there are a couple of zones from which longs make sense IF a good setup is presented. At no point would I be taking shorts into any of these zones.
Trade responsibly and I’ll see y’all next week.
Courtesy of Vlad - trend-based trader and MentFX student
⛓ On-Chain Sleuthing
Crypto Condom & her $RLB position
Crypto condom has been shilling $RLB quite a lot recently. Understandably so as the anon has been building a sizable $RLB position in the last few days.
Already up 2x since, GG.
Approved the router, ready to take profit?
Crypto Condom’s DeBank Page [Only visible for free subs]
Ethersole joining the $RLB party
Currently holding a 90k position.
Digits enters $GENIE
You may remember $GENIE as we covered it last week and connected it with rumors that it might get integrated with Maestro bot.
Well, those rumors were NOT true. Genie will not get integrated with Maestro. However, five other projects have already made their integrations and we expect it to not stop there.
Maybe Digits has read our post, because after the publication 8 ETH was aped by their wallet in $GENIE.
Last week, the token was sitting at a $300k marketcap, now just short of $1mln. At this point be vigilant with entering.
Digits’ DeBank Page [Only visible for free subs]
Remilia & Unibot Community buying $DMT
It seems that many community members of Remilia and $UNIBOT along with some Arbitrum whales have been buying the $DMT token in the last weeks. An interesting mix of wallets is bidding/holding this token.
Example #1: 0×22…70f
0×22b is the largest holder of unstaked $DMT, holds 100 Remilios, 30 miladys, and lots of Remilia derivatives.
$DMT could be one of the first projects to bring NFT bro’s from mainnet to the L2.
Example #2: 0xda…1e9; A $UNIBOT whale ($200k position) bidding $DMT.
Smart Money Moves and Farms
• Smart Money has been engaging with $OLAS.
• Extra Finance has garnered significant popularity among smart farmers recently. Check it out at: https://app.extrafi.io/
• Velodrome V2 continues to be a preferred choice among smart farmers.
• FVM on Fantom has captured the attention of smart farmers as well. Explore more at: https://www.fvm.exchange/home
• Raft remains a popular option, with the R+DAI LP on Aura still favored by smart farmers.
• Swell has established itself as a comfortable and reliable platform for smart farmers.
• Ambient has been receiving substantial interactions from smart money, primarily due to the upcoming airdrop.
• SpookySwap has also piqued the interest of smart farmers.
Thanks for reading, please give us a follow at Castle Capital and subscribe to The Castle Chronicle for an update each week!
Atomist & The Castle