Yes BTC Is Down, But Here's Why You Shouldn't Be Worried

PLUS: A Critical Look at Arbitrum DAO, Key News and Macro Forces Driving The Market

AuthorAuthorAuthorAuthor

CJ CJ, Atomist, 0x_Vlad & MarketsAlpha
January 10, 2025 • Est. Reading Time: 13 minutes

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GM. This is The Castle Chronicle – your crypto compass in a stormy sea.

(We chart the course, you take the ride.)

Here’s what’s on the horizon today:

  • 📈 Price Action – BTC Is Down - Why You Shouldn’t Be Worried

  • 🗳️ Arbitrum Corner - The DAO’s Past and Present

  • 🔍️ Market Watch – $500M Liquidations and What To Look Out For

  • 🔑 Key News – Major Headlines and Project Updates

Scared Here We Go GIF by Pudgy Penguins

📈 PRICE ACTION

Let’s be real, the last couple of weeks haven’t been that exciting for BTC price action but, it’s important to keep in mind where we are on the bigger picture.

What we can see is:

  • A healthy uptrend

  • Expansion out of consolidation

  • Active momentum cycle

For now, this chart is as bullish as it gets and, I expect this sideways price action to result in yet another re-accumulation. We have only just recently broken out of a 30+ week consolidation and are now moving higher above the 10/20 EMA tunnel indicating a strong momentum cycle.

So for as long as price is above the tunnel, I’m bullish.

Not following what I’m talking about? Check out my quick cheatsheet to briefly explain how I approach a chart.

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

💙 IS ARBITRUM DAO STILL RELEVANT?

Sometimes we get carried away with acronyms and forget what they really mean. In the case of a ‘DAO’, the clue is in the name - these should be Decentralized, Autonomous, and Organized.

Arbitrum DAO has had its fair share of slack - not something to dismiss lightly - but if we take a broader look, the DAO has been championing the Decentralized and the Autonomous, and in 2024, has aligned on an Organized future.

Despite the limitations surrounding DAOs (especially one as decentralized and autonomous as Arbitrum), the community’s activity and achievements far outweigh those of other DAOs in the space.

Since its inception, the DAO has:

  • 430+ Forum Proposals

  • 344 Snapshot Proposals

  • 46 Onchain Treasury Proposals

  • 18 Onchain Core proposals

Of course, at the outset, these proposals were sporadic and scattered. However, over time, the community has morphed into a coordinated mass of individuals, collectives, and businesses who have achieved great things.

Highlights include:

  • Mission, Vision, and Purpose (MVP) - The DAO aligning on its high-level identity, paving the way for strategic objectives to be set

  • RWA Investment - The DAO allocated $30M to RWAs, diversifying the treasury and igniting the development of a sustainable endowment program, even onboarding Blackrock’s BUIDL

  • Treasury Management v1.2 - The DAO will now allocate the 7,500 ETH in its treasury to earn yield

  • STIP, LTIPP, and STIP Bridge — Across these programs, the DAO allocated over 80M ARB to protocol end users as incentives

  • ARB Staking — The DAO, via Tally, is now researching and building staking for ARB that seeks to reward ARB holders based on their governance participation

  • ARDC - Bringing industry expertise into the DAO to support delegates has been a great success via V1, with the likes of Chaos Labs, Blockworks, and Delphi involved, and v2 is about to kick off bringing in Castle Labs, DefiLlama Research, Nethermind, and more.

  • GCP - The DAO approved a 250M ARB gaming venture fund to support early-stage gaming projects on Arbitrum - the first investments will be made soon https://thegamingcatalyst.com/

  • Stylus Sprint - Live right now, 5M ARB are up for grabs incentivizing developers to build Rust contracts on Arbitrum using Stylus

  • ArbOS Technical Upgrades - The DAO approved Stylus, Timeboost, and BoLD, the latter two of which are set to come into effect shortly, pushing Arbitrum ahead of its competitors

See below for some of the initiatives driven by the DAO across a range of sectors and functions, shown as a Status board and a table overview.

Arbitrum isn’t going anywhere, it’s been constantly building.

2025 is going to be the year of structure for the DAO which I believe can drive Arbitrum to new heights.

The alignment of the DAO across its mission, vision, and purpose, along with the creation of a DAO-adjacent Operational Company, will lead to a much more cohesive DAO<>Foundation working relationship, allowing both teams to share information effectively and for the first time, be able to work together in unison.

This type of activity is what’s going to change the game.

The referenced Notion database is available here for further inspection. DM @atomist on Telegram for any errors/updates.

Other good end-of-year resources:

Courtesy of Atomist - Founder at Castle

📯 AMBIRE LEGENDS IS SUMMONING DEGENS

Have you ever batched a transaction that abstracts token approvals?

Paid gas without needing the native token?

Revoked all approvals in one go?

No? Well now you can - with Ambire wallet.

And there’s more…

Prove your onchain skin in the game across existing wallets, discover the power of smart accounts, and earn XP for future WALLET tokens.

“Where do I start?” you ask…

  1. Visit https://legends.ambire.com/ and use invite code: castlecap to get your hands on the Ambire extension.

  2. Mint your soulbound NFT character with sponsored transactions - no funds needed for gas.

  3. Complete quests and earn XP for future WALLET token rewards.

🔍️ MARKET WATCH

SECTOR PERFORMANCE

Over the past week, the market experienced broad declines, with significant pullbacks across multiple sectors.

As a result, we saw market-wide liquidations exceeding $500 million in the last 24 hours, heavily impacting long positions.

MACRO FORCES DRIVING MARKETS AGAIN?

The selling pressure came from macroeconomic factors, including the Federal Reserve's December meeting minutes, which highlighted a cautious stance on interest rate cuts due to ongoing inflation risks. Officials anticipate a slower pace of rate cuts in 2025, aiming for a measured approach to monetary policy to avoid the negative effects of aggressive adjustments.

Moreover, robust U.S. economic data, including stronger-than-expected non-manufacturing PMI and job vacancy figures, drove Treasury yields to 4.7%. Rising expectations of potential rate hikes in early 2025 have further weighed on risk assets like bitcoin, ethereum and stocks.

The CME FedWatch Tool shows a 95.2% chance of the Fed maintaining rates at 425–450 bps for the January 29, 2025 meeting, with a 4.8% chance of a cut and 0% for a hike.

KAITO PRE-TGE MINDSHARE

Kaito's pre-TGE Arena provides a quick view of trending projects without tokens that are gaining attention. In the last 7 days Bera, Kaito, and Story have performed well and are growing in mindshare.

BITCOIN INFLOWS CONTINUE GROWIN

Post-new year we have started seeing renewed Bitcoin ETF inflows in the last few days.

In TradFi, more companies are adopting the "MicroStrategy playbook," using Bitcoin as a primary treasury reserve by reallocating cash reserves and raising funds through debt or equity, according to NiceHash (see graph below):

Courtesy of @MarketsAlpha - Telegram channel for sharing crypto market research and Intel Alpha

🔑 KEY NEWS

MAJOR HEADLINES

  • Morgan Stanley’s E-Trade Explores Offering Crypto Trading

  • IRS Delays Crypto Tax Reporting Requirements Until 2026

  • MicroStrategy to Target a Capital Raise of Up to $2B of Preferred Stock

  • FTX Debtors Plan of Reorganization started

  • Strive files to launch ‘Bitcoin bond’ ETF

  • South Korea’s NFT-Powered Cards to Boost Local Tourism

  • FTX EU Sold to Backpack

PROJECT UPDATES

INTERESTING PROJECTS

  • Hiero Terminal: AI infra and agents

  • Sol.ai: All in one platform for Solana development - powered by AI

  • gAInz: AI agents focused on health

  • goat Index: Data Layer for onchain AI agents

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

Til next time frens, stay informed, stay inspired and catch you soon!

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.

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