Narratives of the week : March 1

$BTC above $60k (!), memes and AI coins are pumping, UNI fee switch

Mar 01, 2024

Welcome to this weekly recap, I am Viktor and you can find me here on Twitter and here on Telegram. Enjoy your reading !

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$BTC and the market overall

If I was told 6 months ago what would happen on BTC price, I would have a hard time believing it. And yet, here we are, above $60k for BTC, very close to its previous ATH at $69k.

So in basically three days, $BTC went from $51k to close to $64k, thanks particularly to very strong ETF flows (between $500M and $700M a day during 3 days). What is going to happen now ? Well, if you read this newsletter, you are probably a crypto-native, so you should not be sidelined, but there is a chance that you feel underexposed anyway. If this is the case, I think this is a tricky spot (for someone sidelined) since we are basically up from below $40k without any meaningful drawdown.

For me, it makes sense to be entirely deployed, but in SPOT, so if the market tanks, you just have to stomach it, and wait until we finally go for the $70k mark. Remember that the market does usually not go really insane before $BTC reaches previous ATH. The worst thing that you could do is to be long on leverage and get wiped out if a flush happens right before the core of the bull run begins. And by the way, we did already have a liquidation cascade this week when $BTC spiked in 30 minutes from $62 to $64k, and then dumped to $69k. A lot of liquidations happened on that day, but the funding rates remain quite elevated across the board right now. This is an environment where liquidations happen very easily, be careful.

Funding rates table thanks to Velo, with the new updated colors to keep up with degens

$ETH naturally had a great week too, and is currently at $3400, from $3000 a week ago. ETHBTC pushed to the 0.06 resistance and then pulled back to 0.055 again. I think that longing $ETH here is a better r/r trade than BTC because of how lagging it has been, which appears even more obvious now that $BTC is almost at all time high while $ETH still looks far from it.

The $UNI fee switch and a short-lived DeFi season

The Uniswap Foundation has finally posted a governance proposal for the “fee switch”, which is something that $UNI holders have been salivating about for years. The fact that the Uniswap Foundation tweeted it implies that the likelihood that it is approved is way higher than if a random anon had posted this proposal.

The resulting pump on $UNI was +80% after a day, and even if it retraced a bit, $UNI is still +60% higher than before the announcement.

Most Defi coins pumped with $UNI, but none of them were as strong, and the whole “Defi season” has been very short and weak overall. $COMP is up +55%, $SNX is up +28%, $AAVE is up +21%, $DYDX is up +20%. My opinion is that most of the DeFi 1.0 coins are too old, have too many bagholders and are likely to underperform during the cycle… On the other hand, mostly are very diluted (so no unlock selling pressure), they are well established, generate revenue, and their market caps are low. So it is up to you to decide if you have conviction in this sector… after all they could a good “value” buy ?

AI coins, again :

Last week, I covered AI coins extensively, as it was the hottest sector by far. They took a small hit when the hot ball of money rotated into DeFi coins, but recovered strongly, a few of the coins in the AI sector have been strong again. As dumb as this category can look to you, I don’t think we can fade it.

$AR : +124%. They made an important announcement with the launch of “ao, the hyper parallel computer”, and the coin doubled as a result**.**
$ARKM : +81%. Unstoppable one. Peter Thiel and Sam Altman are among the investors.
$ORAI : +48%
$FET : +48%. One of the leaders of the AI narrative on CEX.
$AGI : +44%
$0X0 : +40%. A on-chain coin that is up a gazillion percent from its launch in 2023.
$TAO : +25%. After two weeks of weaker price action, $TAO is now in price discovery again !

$WLD is slowing down after reaching close to $100bn FDV (= $10 price). DeFiSquared posted a tweet about his bearish view on the token and it was a good entry for a short, especially if you used it as a hedge against other coin longs. For example, a long $FET / short $WLD trade has been printing.

Memecoin mania : retail coming back or degens frontrunning it ?

The best-performing category of the week has actually been memecoins. Is this a sign that retail is starting to come back into crypto ? I think this pump is a good reminder that memecoins are here to stay, and that this will remain a dominant theme, in proportions that are at least comparable to 2021 :

$DOGE : +48%. DOGE had its strongest month since October 2022, when it almost doubled because of the Twitter acquisition by Elon Musk. $DOGE also had this kind of pump in 2020 when $BTC approached its ATH, so this is promising for the DOGE bulls, that had a hard time in the last few months, as DOGE consistently underperformed BTC. The target is $1, and the current price is $0.12. A man can dream.
$PEPE : +145%. $PEPE is one of my favorite memecoins. A good candidate for a 30x performance. As I wrote in a tweet, PEPE is hard to hold, and conviction has been tested during the recent months too…

$BONK : +100%. The Solana mascot memecoin. “Bonk guy” is having its revenge after being mocked on the TL…
$WIF : +220%. The strongest pump, which can be explained by the fact that it was smaller in market cap than PEPE or BONK. It reached the $1 target, and now does not benefit from the very low unit bias that retail loves. But it does have a hat.
$SHIB : +38%. Of course, $SHIB will follow the herd if every memecoin is pumping.
$FLOKI : +66%. A smaller dog coin on Ethereum than $DOGE or $SHIB.
$MOG : +180%. “On-chain summer” survivor, strong candidate to become the next $1bn memecoin on Ethereum ?
$BITCOIN : +84%. Still under $100M market cap but maybe too schizo for retail to pump it…
$DOG : +71%. A $DOGE beta with very small market cap ?

I am basically bullish on all of them, besides $SHIB that I think is overvalued (on a relative basis) because it is neither new nor old enough (”Lindy”) to have the same significance as DOGE.

Solana and alt L1s

SOLETH peaked in Christmas and reached a local bottom at -40% this week, but $SOL finally bounced from there, and reached new highs at $137, with an impressive +32% in 7 days.

Many Solana ecosystem coins followed : $JTO with +25% gains, $NEON with +33%, $PYTH with +23%, $RAY with +37%, and $JUP with +35%. But we can notice that you barely performed on par with $SOL by going with these “beta coins”. Be careful with the “long Solana DeFi coins” thesis, because you should remember that DeFi/ETH charts have been down only since February-March 2021.

We can mention $INJ in the same category as $SOL : both have been some of the best performers of 2023 in the top 100, both have pumped in tandem in Q4 2023, and both have been consolidating for almost 70 days in a range. And $INJ is now very close to the breakout and looks ready for the next round.

I also mentioned last week that I was long $APT with the straightforward thesis that it was the last major L1 that had no pump in the last few months. This week it finally had a surge from $10 to $12 in around 2 hours. I still have most of my long open and would like to TP higher but not exactly sure it will happen.

What else happened in the altcoin market ?

$GALA is a coin that tends to have brutal and strong spikes, before weeks of bleeding, and it is currently starting to get momentum again, with +40% gains in a week. The president of Gala summed up the recent updates around the ecosystem, and it seems like he wants to make sure that everyone understands that $GALA is now a DePIN project too. Founders that are able to ride these trends know how to pump their token…
GALA was part of the metaverse trifecta with $SAND and $MANA back in November 2021, and they followed $GALA price too with more than +30% returns this week.
$ONDO introduced this week Ondo Global Markets, “a platform to bring all publicly traded securities onchain with native access to traditional securities exchange liquidity”. The price immediately spiked +20% after the announcement. Despite my initial doubts, it seems clear that $ONDO is a darling of CT and is both the RWA leader and a “Larry Fink” coin… it probably will keep pumping.

$LUNC is up +17% this week and could be a good play, it has been shilled by thiccy on its Telegram channel : it will get attention because of SEC vs Do Kwon in March 25 + it is almost a memecoin at this point + it is the only L1 with very low unit + retail from last cycle remembers LUNA.
There have been 2 pieces of news regarding $TON, the coin of Telegram, this week. The first and most important is that $TON is going to be used for facilitating payments for Telegram advertising. The second is that $TON has been listed on Binance perpetuals today.
$PANDORA, the leader of the new ERC404 category, that did a 50x in a few days and then had a -65% retrace, is now getting very close to its ATH again. Some people poured significant amounts into $PANDORA (6 to 7 figures), and the liquidity is huge (>$40M), it tends to be a slow mover but I am confident it will get back into price discovery soon.
Blast, the L2 ‘with native yield, backed by Paradigm’ and founded by the Blur team, has opened yesterday. You can try shitcoining there if you like to be in the onchain trenches… I think that risking rugs and taking this route in such a good market environment is not very interesting though.
Bitcoin Ordinals have been extremely strong this week : the 2 winning collections seem to be NodeMonkes (0.27 BTC → 0.6 BTC in a week for the floor price) and Bitcoin Puppets (0.09 BTC → 0.22 BTC). On the Ethereum front, Milady floor price pumped from 2.3 ETH to 3.5 ETH (and Remilio floor price pumped too).
$SPELL is up more than 2x this week. Is this simply because of the low unit of the coin ? The more we progress into this bull run, the more important this low unit bias will become.
$RBN is up +70% this week. It is one of the perp dex coins that has been the strongest lately, probably both thanks to its good metrics and the upcoming migration from $RBN to $AEVO.
The TRUMP / MAGA memecoin is unstoppable, it is up +80% this week and currently valued at close to $300M market cap.
$AXL is up +40% this week (the Binance listing announcement helped it pump). $SYN is also up +60%. Both are bridge coins that seem undervalued on a FDV basis compared to the upcoming $W (Wormhole) and $ZRO (LayerZero), which are traded between $10bn and $20bn FDV on pre-markets. This could be a good catalyst for the existing bridge coins that are way smaller.

Thank you for reading this article,
Cheers,
Viktor.

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