A Guide to Finding Crypto Alpha

Plus Interest Rate Cuts

Author

will stauner
June 06, 2024

THE PHENOM CRYPTO LETTER

GM,

Welcome to the Phenom Weekly Update.

Excitement is building in the markets this week on news that Canada and the EU are starting to cut interest rates. The economy has started to show signs of slowing down with job openings hitting the lowest level since 2021. If Powell turns on the money printer, risk assets (like crypto) will start to really catch a bid and price action will be off to the races.

Here’s what we’ve got this week:

MARKET RUNDOWN

This week, the crypto markets have been predominantly bullish, driven by a mix of positive news and regulatory developments. The overall market cap has climbed back above $2.5 trillion, showing resilience and growth potential​.

The crypto market is continuing a bullish trend with Bitcoin and Ethereum leading the charge. Key regulatory and institutional developments are providing a favorable backdrop, although high funding rates and potential market corrections are factors to watch.

Bitcoin (BTC):

  • Current Price: Approximately $71,087, up by 5.45% this week​​.

  • Key Developments: Bitcoin is on the brink of potentially reaching a new all-time high (ATH). It has been hovering around the $68,500 mark, with the next major resistance level at $71,800. A successful breach could see Bitcoin targeting its previous ATH of $73,650​​.

  • Market Dynamics: Bitcoin's performance is bolstered by increased institutional interest and a generally bullish macroeconomic environment. However, some caution remains due to high funding rates, suggesting that a correction could still be on the horizon​​.

Ethereum (ETH):

  • Current Price: Around $3,865, showing a modest gain of 2.61% this week​.

  • Key Developments: Ethereum continues to benefit from the ETF approval and renewed institutional interest​.

  • Technological Advances: Ethereum's ongoing upgrades and strong DeFi ecosystem continue to attract developers and investors, maintaining its position as a leading smart contract platform.

Major News:

  1. Regulatory Developments: Europe's Markets in Crypto Assets (MiCA) regulations are expected to come into force later this year, which could significantly impact market dynamics by providing clearer regulatory frameworks​​.

  2. Institutional Moves: The approval of Bitcoin and Ethereum ETFs has brought significant capital into the market, further strengthening the bullish outlook for the rest of the year.

  3. Coinbase launches a new smart contract wallet that will onboard millions of users w/ easy to use features like sending crypto like a txt message.

Top Movers:

  • (-) DogWifHat ($WIF) -8% The springtime favorite meme is pulling back and showing weakness.

  • (-)Bonk ($BONK) -8% Another popular meme down bad this week.

  • (+) Notcoin ($NOT) +114% Notcoin continues its meteoric rise.

  • (+) Kaspa ($KAS) +30% Kaspa is rebounding from months of consolidation.

Research Tools for Finding Alpha

In crypto, finding alpha – achieving returns that outperform the market – requires leveraging the right tools and insights. This guide delves into ten tools that can help you identify and capitalize on opportunities in the crypto market. From tracking decentralized finance protocols and analyzing smart money movements to monitoring upcoming token unlocks and evaluating project decentralization, these tools equip you with the data and analytics needed to stay ahead in the ever-evolving crypto landscape.

  • Purpose: Tracks decentralized finance (DeFi) protocols.

  • Features: Total Value Locked (TVL) data, rankings of DeFi platforms, protocol details.

  • Usage: Analyze which DeFi projects are gaining traction and growing in TVL to spot investment opportunities.

  • Purpose: Tracks smart money movements.

  • Features: Wallet tracking, transaction alerts, investment patterns.

  • Usage: Follow the transactions of successful investors to identify promising tokens and trends early.

  • Purpose: Monitors fundraising and project launches.

  • Features: Detailed information on new projects, investment rounds, partnerships.

  • Usage: Stay informed about new projects and potential high-growth investments.

  • Purpose: On-chain analysis.

  • Features: Advanced analytics, tracking of large transactions, detailed wallet activity.

  • Usage: Deep dive into blockchain data to understand the behavior of large holders and market movers.

  • Purpose: Market data and fundamental analysis.

  • Features: Price tracking, market cap, trading volume, developer activity, community engagement.

  • Usage: Comprehensive view of market conditions and project fundamentals to make informed investment decisions.

6. Dune

  • Purpose: Community-driven analytics platform.

  • Features: Custom dashboards, SQL queries, wide range of metrics.

  • Usage: Create and explore customized data dashboards to monitor specific metrics relevant to your investment strategy.

  • Purpose: Tracks upcoming market events.

  • Features: Calendar of events like token listings, forks, upgrades, and partnerships.

  • Usage: Plan trades around significant market events that could impact prices.

  • Purpose: Analyzes token unlock schedules.

  • Features: Information on vesting schedules, upcoming token releases.

  • Usage: Predict potential price movements based on upcoming token unlocks that could lead to selling pressure.

  • Purpose: Evaluates protocol decentralization.

  • Features: Visualization of token distribution, identification of centralized holdings.

  • Usage: Assess the risk of centralization in projects to avoid potential market manipulation.

  • Purpose: Scouts emerging crypto "gems".

  • Features: Analysis of decentralized exchange (DEX) trading data, new token listings, liquidity monitoring.

  • Usage: Identify undervalued and newly launched tokens with potential for significant growth.

If you effectively utilize these tools, you can gain a competitive edge, uncovering hidden opportunities that can lead to market beating returns.

READING CORNER

Overwhelmed by all the content you could be reading? Don’t worry, We’ve got you. We’ve narrowed down a few long form pieces we think are worth checking out this week.

BLOCKBUZZ

Quick Hitters from the week

THE TWITTERVERSE

A collection of the most interesting stuff on Crypto Twitter this week

Rate cuts inbound → risk assets (crypto) to the moon

WAGMI

For the (crypto) Culture

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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