TPS Capital - State of the Blockchain Weekly Run - January 15th, 2022
Yet another volatile weekend to start 2022 as we wrap up this weekend topped off with high GWEI prices in the ~170s throughout the entire week with a renewed bullish sentiment to counter what we saw last week. $LINK popped for the first time in a long time w/ rumours that early investors have stopped selling, but with the psyops of LinkMarines, its price action never really made any sense to me.
Majority of the gamefi sector down with $YGG, $ENJ and $SAND scraping by to stay afloat this week, rest are ranging between -5% to -15% WoW. Defi tokens also took a beating down -5.5% to -9% across the board, with $SPELL lagging the furthest of the pack -15.3%. But with that saying, there are new gen Defi tokens that should not be ignored as they’re starting to pick up momentum, related to OHM’s (3,3) tokenomics.
Expecting to see continued volatility in the short term with one of the major catalysts being the imminent release of the Fed’s comprehensive report on how they will view crypto; setting the precedent for the first initial years to come. https://dailyhodl.com/2022/01/13/fed-chair-jerome-powell-says-full-report-on-digital-currencies-to-be-released-in-coming-weeks/
Until then crypto markets seem to be in recovery mode with overall market cap climbing back from the depths of 1.84B to resurface above 2B @ 2.04B over this week with a few announcements and a couple viral airdrops from WTF.FEES and $LOOKS competing with Opensea.
From a macroeconomic perspective, we’re hearing that retail sales are dropping -1.9% in December (in the USA)…people aren’t spending their money. Though the analysts predicted a “0%” change for that month, this would imply that people actually bought even less than expected? Labor shortages still ravaging the country. Companies are starting to use a “shrinkflation” strategy to survive during these times where they keep prices the same, while reducing the amount of items given. Unit price sold goes up, but optically consumers are paying the same amount, for less.
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Some of the hot topics that circulated throughout the week in no particular order:
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-Inflation at 7% YoY in Dec 2021
-ARK Cathie Woods buying 6.93m shares of a SPAC reported to be merging with Circle
-Feels like its vote escrow aka ve- season is upon us with rising defi yields opportunities surfacing. $FTM seeing its TVL increase +20% over this week with the anticipation of Andre Cronje+Daniele’s ve(3,3) aka SOLID to be announced
-Bit of a shit-show with $WTF airdrop, bots front-running transactions and stealing ETH from people with unlimited slippage settings.
-Convex bribe season well underway, they’ve won the CRV war already, targeting FXS market next with cvxFXS integration.
-Gauges live on Saber (cross-chain liquidity exchange for stables) for Solana, ETH, BSC, Terra, Avalanche, Celo chains
-Near Protocol announced 3AC-led recent $150m investment into the protocol, along with Digital Currency Group, Pantera Capital, Electric Capital, Coinbase Ventures, Blockchain.com and Baidu Venture; total raised $215.9M
-Defi Alliance goes full DAO and drops the “Defi” from its name, aiming to incubate Web3 projects w/ $50m raised from 300 contributors in the initial round
-FTX starting a 2B Venture Fund, will be allocated towards building teams within the blockchain community + Web3 tech
-Rio De Janerio putting 1% of their balance sheet into $BTC
-Alchemix v2 coming live soon, worthy of mentioning after their previous hack showed how strong their community base
-DYDX v4 upgrade on the way, price action has dropped
-FXS snapshot to be taken soon, still an opportunity to stake FXS to get an FPI airdrop
-Twitter Spaces with NEAR, AVAX and SOL founder with tons of insight dropped
-Polygon Zero team launches Plonky2, supposedly 100x faster than alts + native compatibility with ETH
-Arbitrum sequencer went down, community was slow to react surprisingly, which shows the lack of interest currently on the L2 chain currently with attention on FOAN meme
-Sol Invictus, the protocol behind the decentralized reserve currency built on Solana, are launching UST bonds on their platform, this comes a week after Terra announced their $139m investment plans to help grow their UST ecosystem
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Quick NFT stats throughout this week; contributed by PrinceSatoshi
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BAYC taking up all the attention recently with some notable buys:
–Bored Ape Yacht Club #6694 for $1.41M
–Bored Ape Yacht Club #1837 for $1.3M
–Bored Ape Yacht Club #1401 for $1.24M
–Bored Ape Yacht Club #23 for $894k
Top Collectibles
*Interesting note:Axie Infinity is still not in the top 4 for a second week.
CryptoPhunksV2 made $85M in sales with a total of 83 buyers who transacted 167 times.
PhantaBear made $58M in sales with a total of 2,400 buyers who transacted 4,265 times – a 224% increase from last week.
Bored Ape Yacht Club made $50M in sales with a total of 150 buyers who transacted 173 times – a 41% decrease in sales volume from last week.
World Of Women made $35M in sales with a total of 1,146 buyers who transacted 1,775 times – a 349% increase in sales volume from last week.
Hearing about WAGMI Beach and Catalina Whales, seeing some action with Mike Tyson endorsing SOL and purchasing a whale this week. Other large big pop culture names being affiliated with the project
Platform Stats:
OpenSea made $987M in sales with 226k buyers, almost a 8% decrease in sales volume last week.
Magic Eden made $68M in sales with 94k buyers, almost a 11% decrease in sales volume last week.
Solanart made $4.6M in sales with 12k buyers, almost a 43% decrease in sales volume last week.
AtomicMarket made $6.54M in sales with 12k buyers, almost a 39% increase in sales volume last week.
Rarible made $3M in sales with 1,500 buyers, a 33% decrease in sales volume last week.
The bullish start to the year for NFTs showed signs of slowing down the past week, primarily attributed to the high gas environment caused by two large airdrops ($LOOKS & $WTF). We’re seeing some significant floor retracements in mid tier collections that went up over 5x in the past two weeks, including the following:
• Thingdoms 0.7e down to 0.4 https://opensea.io/collection/thingdoms
• Coolman’s Universe 2e down to 1.1e https://opensea.io/collection/coolmans-universe
• Phantabear (NFT collection promoted by prominent Asian singer Jay Chou) 7e down to 3.5e https://opensea.io/collection/phantabear
• Kumo’s World 0.7e down to 0.3 https://opensea.io/collection/kumo-x-world-resident
Interestingly enough, MAYC, BAYC, and Cool Cats have remained relatively unperturbed by the pullback, sitting at 16e, 83e, and 12e respectively. These are all pretty much ATHs. I think this will be the norm going forward, where profits made from investments in smaller collections will continue to rotate into the bluechips as more longer term holds.
Despite the negative price action the past week, I think this bull run still has a ways to go. After the $WTF liquidity draining fiasco, CT seems be more wary of airdrops. While the $SOS airdrop propelled the newfound NFT market into price discovery mode (along with low ETH price), $LOOKS & $WTF actually had a negative impact on the market. Fortunately for us, gas is now lower & hovering around 100 gwei, but granted it is the weekend, so we will see what happens next week.
My picks for currently undervalued collections largely remain unchanged - this includes Thingdoms, the littles, Creature World, Anonymice, and Wulf. These will all be great long term holds for the next few months because of their strong communities/art.
There is only one project that I am buying into heavily in the near term - Fomo Mofo (
https://www.fomomofo.io/
). The art is extremely distinct and strong, founders are doxxed, and the team has been great at building a pre-mint community & overall hype. Presale mint is tonight, Public mint is tomorrow night (Jan 16). I am very excited for this collection and first mentioned it towards the tail end of December.
Lastly, AB Curated continues to be in a slump, so nothing much to update there. Until people see the value narrative in ABC instead of PFP, I don’t think there will be much action there. I do think smart money is buying the Curated dips here, and its a matter of time until more capital rotates from PFP to AB. It’s important to note that most ABC collections are capped at a 1k supply (vs an average of 8k for PFP), and so its VERY easy for ABC to go up in value. Hope you enjoyed the recap and stay tuned 🙂
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Quick Price Action Highlights
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LAYER 1 BATTLES this week
EVERYTHING UP
-NEAR +43% (best performer of the week)
-FTM +20%
-ONE +20%
-LUNA +11%
-ADA +9%
-DOT +9%
-BNB +11%
-ETH +4.5%
-SOL +3%
-AVAX +1%
-$BTC up 4 days of the 5, with local supports at 41700 after bottoming out at 39750s at the height of the sell off last week. Local resistance at 44400. Currently still 15.7% away from breaking 50k psychological levels
-Currently trading 6% below 30d SMA @ 46k and ~26% away from its 100d SMA @ 54k.
BTC OI staying stagnant around 17B across the large exchanges, down from 28B from early November highs.
-$ETH moved up 3 out of the 5 days during the week but still seeing tons of selling pressure as the alt L1 movement continues on, with NEAR leading the way for the past few weeks. Local support at 3200, and resistance at 3400 as it trades range bound. Tetranode on the recent Uponly podcast mentioned he’s still a big supporter of ETH any states the PoS merger is the only thing he’s waiting for
ETH OI range bound between 8.5-9B, down from $13.5B early November highs (down ~16%)
-ETHBTC up two days in a row to 0.077, still 3.3% away from challenging 0.08 levels last seen last week. Most recent highs at 0.088 on Dec 9th, 2021.
-Major Exchanges long/short ratio this week at 50.3/49.7
-Fear and greed index still at extreme fear @ 23, up from 10 last week (higher is more bullish)
-Aggregate Defi TVL across all major chains @ 239B, +6B up from last week 233.
-ETH L2 TVL +8.5% to 5.93B, up from 5.46B last week w/ peaks of $7.16B in late Nov 2021.
Arbitrum seeing +15.6% TVL over this week, about to break 3B TVL ATH
-EIP1559 has burned 1,517,641 ETH to date ($5B notional at current prices)
Burning rate increasing signifcantly a 8.37 ETH/min, up from normal avgs of ~6.3 ETH/minute seen over the past few weeks.
-Opensea transfers top spot on the ETH burn board at 171k ETH (+20k ETH from last week)
-Normal ETH transfers @ 147k ETH (up +11k ETH from last week)
-Followed by Uniswap @ 117k ETH (up +2k ETH from last week)