Weekly Beluga Insights

This week we experienced what appears to be the largest Alt Coin liquidation event in two years. Hundreds of millions in interest was wiped out in a matter of minutes. This number is staggering and was caused from a ~10% move on Bitcoin, which in the grand scheme of crypto volatility is relatively small. What this means is traders got complacent and over-levered their positions, leaving them vulnerable to liquidation on moves like this.

Rumors circulated that the reason for this drop was somehow due to a report from an analyst at MatrixPort who believed there was a reasonable doubt of the BTC ETF being denied. Its crazy to think a single analyst report could be the source of hundreds of millions in liquidations. It is far more likely that this was a liquidity grab meant to clear some of the leverage, which as seen in the above chart, had become very thick very close to the current price of BTC. We have now almost entirely retraced the liquidation cascade, further lending to the idea this was a liquidity grab.

As we draw closer to the expected BTC spot ETF approvals with deadlines this month, there will likely be a lot of violent moves on majors as well as alt coins. Beluga recommends our readers be careful with their leverage, and manage risk properly.

Top Movers of the Week

• Sei (SEI) +69.03%

• Internet Computer (ICP) +43.69%

• Astar (ASTR) +37.91%

• Arbitrum (ARB) +36.40%

• Celestia (TIA) +32.54%

What We’re Watching

Given the liquidation events of this week, the strength of a lot of alt coins was tested. A good indication of their relative strength at current time is how resilient the price was after the massive price drops spurred on by liquidations. For example, Celestia (TIA) has fully retraced its drop and more, and Sei (SEI) barely experienced a move at all. One coin we’ve had our eye on for some time, however, is Aptos (APT) which at time of writing sits up 20% off Wednesday’s large dip.

As we discussed in a previous newsletter, we believe Aptos and its ecosystem have high growth potential this year, and are a likely candidate for a shorter term rotation of liquidity. Aptos has raised $350m to finance their chain’s development progress and aid in jump starting their ecosystem, and while APT currently sits at over $3B in market cap, its ecosystem is underdeveloped relative to current size and projected growth. If you are a bit more on the “degen” side of trading, picking the right memecoin champions has been the highest ROI play on similar ecosystem stories like Sei and Solana. Aptos has not found its memecoin yet, which means a potentially massive opportunity exists in being able to identify it prior to more traders entering the arena.

For those more on the fundamental side of trading, APT itself remains an attractive coin to accumulate. When looking at previous pumps on chains with similar stories to our Aptos thesis, unless you pick the correct memecoin, the base currency of the chain tends to out perform everything else. APT’s volume over the last few weeks as well as a massive spike in user activity indicate some traders are already making their way from other chains like Ethereum, so we recommend keeping an eye on Aptos. On the bearish side, Aptos has one of the largest unlocks of any coin this month which could lead to investors’ coins being sold onto the market. In our opinion, this is mostly a non-event as APT has had similar inflationary pressure on it for a while.

Disclaimer
Aptos Labs is an investor in Beluga.

Quick Quips: Catch Up on What You Missed

• MatrixPort’s ETF-related Analysis

• Ethereum L2 TVL surpasses that of all other Layer 1 Networks combined

• Etherscan Acquires Solscan

• Trillions of Dollars worth of Asset managers file for BTC ETF’s

Chart of the Week

There are a lot of big token unlocks on coins this month which are a good idea to keep an eye on to better make portfolio decisions.

Beluga’s 10 Predictions for 2024

This week we published our Top 10 Predictions for 2024, covering topics such as Bitcoin, Memecoins, Crypto Regulation, and more! Read on below 👇

1. Bitcoin will break $100K and reach a $2 trillion market cap, placing it just outside the top 10 currencies in the world.

2. Satoshi Nakamoto will be considered for the Nobel Prize for Economics but can’t be nominated as they don’t know his identity.

3. A Bitcoin ETF will finally be approved, but won’t go live for trading until Q3 of 2024.

4. The Bitcoin ETF approval will be a “sell the news” event, and Ethereum will outperform BTC for the first half of 2024.

5. Memecoin mania will be all the rage for the first half of 2024 with Bonk leading the charge to a $3B market cap.

6. Crypto payments will become hot as Stripe will acquire BitPay.

7. No new crypto regulations will pass in the USA, however, regulators will start targeting DEX’s and try to require KYC.

8. Base Network will become Ethereum’s largest Layer 2 by TVL and daily transactions.

9. Web3 games will still struggle for adoption, but the NFT market will surpass previous volume highs led by blockchain gaming NFT’s and tokens.

10. USDC will flip Tether as the largest stablecoin as Tether will have trouble complying with increasingly active US regulators.

Bonus Prediction:

The FTX exchange will relaunch under new management and regain its spot as the top crypto derivatives exchange.

Did you Know?

As of 2023, almost half of all Turkish citizens reported they had owned, currently own, or used Bitcoin before making it the country with the highest rate of BTC adoption due in large part to a failing Turkish Lira.

Disclaimer
The content on this site is for informational purposes only and should not be construed as investment advice. While Beluga strives to ensure the accuracy and timeliness of information, there may be discrepancies when comparing our data to that of financial institutions, service providers, or specific product websites. Always consult with a professional before making any financial decisions.