Another week, another whirlwind.

From partnerships reshaping Arbitrum’s ecosystem to Bitcoin consistently smashing ATHs while AI agents continue to gain mindshare, the momentum is undeniable.

Add in some unexpected moves by top market makers and a surprising focus on memecoins, and you’ve got a week that shows crypto’s ability to surprise—and reward—those paying attention.

Let’s dive into the biggest stories driving the markets and the opportunities they unlock.

🦙 Castle Teams Up With DefiLlama Research

We’ve officially teamed up with @DL_Research to bid for the Arbitrum Research and Development Committee (ARDC) V2!

🎯 Our Mission & Goals for the ARDC

1️⃣ Builder Retention & Expansion

Tackle developer retention and ecosystem growth challenges to create a robust onboarding program.

2️⃣ Orbit Chain Interoperability

Define pathways to enhance adoption and improve UX, making Arbitrum a cohesive and efficient ecosystem.

3️⃣ Ecosystem-Building Initiatives

Position Arbitrum as the premier blockchain for innovation by optimizing grants and incentivizing groundbreaking protocols.

4️⃣ Refining Arbitrum’s Identity

Refine the DAO’s narrative to attract builders and users, creating alignment across the ecosystem.

💡 Why Vote for Us?

✅ DAO Loyalty: Castle has contributed to the DAO since its inception, often unpaid.

✅ Full Focus: Both Castle and DefiLlama Research are prioritizing this role above all others.

✅ Unmatched Value: Two leading teams for half the rate, bringing both grassroots engagement and data-backed expertise.

📈 PRICE ACTION

Gm frens!

BTC reached new ATHs (all-time-highs) last week and since then has been consolidating in what I’m expecting to become yet another re-accumulation. Let’s zoom into more recent price action this time and take a look at the 4h chart.

• Bullish trend

• Supported by 10/20 EMA & 50 SMA

• Possibly overextended

Price seems to be knocking on the newly formed high and wanting to break through, therefore I believe it makes sense to keep looking at LTFs (low timeframes) for longs. However, we haven’t seen a proper flush-out in quite a long time.

For entries on 1h+, I would definitely wait for a proper flush-out. Wait for the laggards (latecomers to the trend) to get liquidated and then look for continuation trades higher. With all the attention BTC has been getting lately I think this scenario makes the most sense.

Times like these are perfect for looking for relatively stronger coins because they show higher overall demand. Wyckoff used to teach himself that relative strength can be seen either by an asset showing:

• bigger % gains during impulsive moves higher

• smaller % losses during pullbacks

(assuming a bullish market)

Let’s take a look at the best performer this week - Mantra.

Mantra has had a CRAZY run and is definitely in an overextended area right now. But so is BTC, therefore we wouldn’t necessarily look to trade it here. BUT once we see BTC flush out, we should pay attention to the relatively stronger assets and see how they behave relative to BTC. If the flushout is less severe, that’s a good sign of strength and it makes sense to look for a trade.

Don’t make the typical beginner mistake of looking for assets that ran less, anticipating them to catch up. Or to long those assets that pull back way deeper during corrective phases. During periods of strength, look for strength!

These are very exciting times that can provide ample opportunities to make a buck, but even during “easy mode” we must stay focused brothers, we must stay focused.

Trade responsibly and I’ll see y’all next time!

🔍️ MARKET WATCH

SECTOR PERFORMANCE

Bitcoin leads the market with a strong +5.70% gain and nearly 60% dominance. Ethereum remains steady at +0.45%, while the PayFi (Payments) sector shows a +4.60% increase, reflecting rising interest in payment-related tokens and applications.

Layer1 and Layer2 solutions remain stable, while stablecoins are flat as expected. On the downside, meme tokens, AI, and GameFi sectors are declining after three weeks as top-performing sectors, with speculation-heavy areas losing momentum. Overall, the market favors fundamentals, with Bitcoin taking the spotlight.

Furthermore, only 6 coins (more like 4) out of the top 100 outperformed BTC in the last 24 hours. And those 4 are from the payments sector.

MARKET MAKER HOLDINGS

One of the top crypto market makers (Wintermute) holds 70% of its portfolio in memecoins. While this could be speculation or related to market-making activities for those tokens, the accumulation tabs, which show positive figures, suggest they are holding these memecoins over time instead of just using them for arbitrage or market-making. This could be a positive sign for the future of memecoins.

On the other hand, one of the most well-known and speculated market makers, DWF, holds most of its portfolio in mid-cap and small-cap tokens. Many of these tokens are fundamentally focused on providing utility within the crypto space.

Jump Trading, one of the largest market makers in crypto, holds most of its portfolio in major crypto like Bitcoin (BTC) and Ethereum (ETH). Additionally, a portion of their holdings is allocated to staking coins.

But, what are market makers?

Market makers in crypto are entities or individuals that facilitate trading by providing liquidity to cryptocurrency markets. They do this by placing buy and sell orders on an exchange, ensuring a counterparty is always available for trades. Their role helps maintain price stability, reduce market volatility, and enable smoother trading for all participants.

STRONG ETF FLOWS CONTINUE

Bitcoin saw another whopping inflow of $773 million, while ETH experienced an outflow of $30 million. BlackRock's Bitcoin ETF experienced remarkable growth in November, with $2.6 billion in inflows, setting a new record. BlackRock now holds $45 billion worth of Bitcoin.

🔑 KEY NEWS

MAJOR HEADLINES

• Coinbase introduces COIN50 index

• Elon Musk and Vivek Ramaswamy will lead new ‘Department of Government Efficiency’ in Trump administration

• VanEck launches $SUI ETN

• MicroStrategy to Raise $1.75B For BTC Purchase

PROJECT UPDATES

• Arcana Finance & More depegged 

• Polter Finance exploited for $12M while Thala exploited for $25M but found the exploiter

• Summary of drama between ai16z's Eliza and new Eliza token

• McDonalds partners with Doodles

• Justin Drake shares his idea about Beam Chain for ETH

• Linea announces Foundation and expected to launch token in 2025 Q1

• Curve introduces scrvUSD while Binance introduces $BFUSD 

• Ethena Labs fee switch proposal approved

• Morpho Labs token transferability date set this Thursday

• Olympus DAO dev hosting a community call after 3 years

• Layer Zero introduces lzRead while Magic Eden releases their tokenomics

INTERESTING PROJECTS

• Burner: New type of wallet

• Rei Network: Neural architectures on-chain

• Bio Foundry: Biotech launchpad

• Guanciale AI: Illuvium founder’s AI agent on Base

Crypto keeps proving it’s the space where the unexpected becomes reality.

BTC is knocking on the door to break $100k, and we are just getting started.

As we head into another week, remember: the opportunities are out there, but staying ahead means staying curious. Keep your eyes open, your strategies sharp, and your risk managed.

✍️ CONTENT CREATORS WANTED

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Three Key Roles at Castle Labs:

1. Newsletter & Social Media Owner: Craft engaging, timely content to grow our online presence.

2. Long-Form Writer: Dive deep into research reports or client-facing content with precision and clarity.

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In our newsletter, we may discuss projects or tokens in which we hold positions. While we aim to provide informative content, our views are not financial advice. Please conduct your research and consult professionals before making investment decisions. Crypto markets are volatile, and past performance doesn't guarantee future results. Invest responsibly, and be aware of the risks. Your capital is at risk, and we do not accept liability for any losses.