THE PHENOM CRYPTO LETTER

GM,

Welcome back to our Weekly Update on everything that is happening in crypto. We had a wild week but the markets have seemingly gone back to their sideways summer chop after recovering from the dump.

We’ve updated our referral program this week. If you enjoy reading our newsletter we’d really appreciate it if you shared it with a friend (or 100🤣). We’ve added some new milestones as a reward for sharing! We think they are pretty cool but if you have any suggestions for rewards you’d like to see in the program shoot us an email. We’d love to get some feedback!

Here’s what we’ve got this week:

• New Referral Rewards! 🎁

• Wen Banana Zone? 🍌

• Are We Headed For A Recession? The Sahm Rule says yes

🎉We’ve Updated Our Referral Rewards! 🎉

If you like Phenom Crypto maybe someone you know would as well.

As a way to say thank you in case you refer someone, we’ve built a referral program. If you share Phenom Crypto with friends we give you rewards. We currently have 3 reward milestones and we will be changing and adding new rewards periodically.

Check out our current reward milestones below!

Are We Headed Into Recession?

The Sahm Rule, which has a history of calling out recessions like it's some kind of economic psychic. It’s been right nine times, with zero misses.

Back in 2007, just before the financial crisis hit, unemployment crept up by 0.5% over six months. Same thing happened in 2000, just before the 2001 recession. And guess what? It’s happening again. Over the last six months, unemployment has ticked up by 0.5%, bringing us to 4.3%. This could mean the labor market is starting to wobble, which is usually a sign that a recession is looming.

Now, the Sahm Rule is this nifty indicator that fires off when the three-month moving average of unemployment rises by 0.5% or more above its 12-month low. Right now, it’s sitting at 0.53%, basically telling us that a recession is likely on the horizon – unless, of course, this time is different (but how often does that really happen?).

But here’s where it gets tricky – the recent job report was a bit skewed thanks to some awful weather. Around 1.5 million workers were affected, which might make things look worse than they are. So, it's probably a good idea to wait for more data before jumping to conclusions. The market still looks strong in some areas.

Wen Banana Zone?

We are all waiting for the Banana Zone 📈 but we seem to be stuck in the Boring Zone. We’ve seen nothing but sideways chop since the highs in March. I think there is a decent probability that the Boring Zone sticks around for a few more months. Based on a few metrics we may be entering an apathy/capitulation period again…

The 3 metrics below indicate we are seeing a decreasing interest in crypto this summer.

1. Crypto YouTube views are down 30% while Google searches are trending back to bear market levels after peaking in March.

   

   Google Searches for Crypto

   

   View Counts for Top Crypto YouTube Channels

2. Coinbase has gone from #159 to #502 on the App Store

   A sure fire indicator of crypto interest is the Coinbase ranking on the App store. After surging during the March market spike it has been steadily slipping in the rankings.

3. Trading volume is down bad this week.

   When crypto is hot, trading volume surges. We have seen trading volume steadily slip this summer with overall volume down over 25% over the last week.

Historically markets do tend to chop during the summer months and particularly leading up to a presidential election large market participants will wait to see which way the election is leaning. The boring price action it results in is mind numbing but the nearer to November we get the more action we will see. Particularly if the FED starts cutting rates which is currently sitting at a 96% probability on Polymarket.

I think rate cutes, the unwinding of the YEN trade and a clearer view of the presidential election will spur the market especially if Trump wins (politics aside markets tend to respond very positively to Republican wins).

Personally, I am using this lull to DCA into high conviction positions. Notably, building my positions in $BTC, $ETH, $TAO and $KAS. I expect in the next 4-8 weeks we will see a strong turnaround in price action with Q4 of 2024 being a very strong quarter for the crypto market.

-Will

READING CORNER

A collection of longer form content we are consuming this week 

BLOCKBUZZ

Quick Hitters from the week

• Coinbase Challenges SEC Over DEX Rule: Calls the SEC's rule on decentralized exchanges "irrational" and urges a rethink.

• Harris Overtakes Trump in Polymarket Prediction: Leads in a $572 million market predicting the next U.S. president.

• Venezuela Blocks Binance and X Amid Election Dispute: Binance assures users their funds are safe despite the country cutting off access to the exchange and social media platform X.

• Celsius Sues Tether for $3.5B: Pursues legal action over the sell-off of Bitcoin collateral that was provided to Tether.

• Tether Plans Workforce Expansion: Aims to double its workforce, focusing on development, investment, and compliance.

• Bitcoin Miner Capitulation and High Hashrate: CryptoQuant suggests a possible price bottom, as miners expand despite recent BTC price drops.

• SEC Subpoenas Three Crypto VCs: Signals an intensifying crackdown on the crypto industry.

THE TWITTERVERSE

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

WAGMI

For the (crypto) Culture