Cryptic ball: resist the FOMO.
Another Thursday, another $90M crypto hack. Yet, the market didn't flinch, with bitcoin and ether recovering from Wednesday's dip, as suggested in the previous newsletter. More interestingly, today BTC has even conquered new highs unseen since last May! This makes us feel like the original blockchain will test $51k this Sunday - and ether may follow to $3.5k if BTC doesn't get a strong rejection.
Solana has also consolidated since Wednesday and is now attempting another leg up. But, as explained in the beginning of the week, SOL now has to fight for the attention of alt traders with other large caps which are catching up. Do you recall Monday's tip about Cardano's ADA being the next one to pull of a new all-time high? Well, it has just dethroned Binance's BNB as the third largest token around!
Chart art: but pick your winners.
Market musings: remember 2017.
An interesting pattern of the current bull market compared to that of 2017 is that bitcoin and ether are more correlated than ever, as you can see below (except for the crypto winter where nothing really moved). In other words, before it was typical for ETH (and alts) to crash when BTC was pumping. Conversely, ETH and alts would only pump when BTC was stable. And everything crashed in tandem.
These days, the only relationship that still holds is that gravity impacts all cryptoassets that aren't stablecoins. This makes picking winners and rotating in and out of bitcoin more difficult than before. Still, it's all about following bitcoin's dominance against all other tokens. We talked a lot about it in April but it's time to resume the conversation, as now dominance is falling even though bitcoin is rising.
That means everything is pumping, which overshadows the original cryptoasset. So, from now onwards, we'll also be following Ethereum's dominance against other smart contract platforms, as illustrated above. For now, it seems most in Crypto Twitter believe it's good for ether's price that Ethereum has competition. But let's keep following the roll-out of Ethereum 2.0 to see if the confidence survives!
Visual block: but understand the differences.
Three things: focus on learning.
- Curious about Solana and SOL? Learn about the popular Ethereum killer with Kyle Samani, one of the project's early investors. Biased, but good.
- Curious about the intrinsic value of NFTs? Learn about "the future of flex" with Arthur Hayes, our favourite writer in this space. Cheeky, but great.
- Curious about Polygon and MATIC? Learn about this scaling solution built on Ethereum to help lower dApp's with The Tie. Just informative, but essential.