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Market Update: Fri 10th Nov
ETH finally breaks out on Blackrock headlines
The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
**MACRO** - Markets are closed today for veteran's day. Stocks actually had a bit of a shaky end to the day yesterday dropping about 0.8% into the close. Interest rates have also been on the move higher again with 2Y now back up over 5% and it seems like most of the "pain" is coming in the front end. Not really sure what's causing that but perhaps it's positioning ahead of inflation next week I'm not sure really. Nothing more to add here macro wise in what has been a quiet week but we'll hopefully get some helpful data points next week.
**CRYPTO** - Well it seems my persistent harping on about "it will only take one headline for ETH" finally happened as yesterday it was confirmed that Blackrock had applied for a spot ETH ETF. As a result we saw ETH spike to as high as around 2120 I believe with the ETH/BTC ratio rocketing all the way up to 0.058 before settling around 0.057. I'm not always right but the ETH long over the past couple of weeks just felt like a an extremely obvious one, although I admit I didn't expect that Blackrock headline to come as soon as it did, and it seems like the market felt the same. So normally what I would say here now is that I am extremely bullish on ETH/alts, which I am, but I think you have to be very careful as there is a tonne of leverage in the system right now. We saw a big liquidity cascade yeterday which got bought up very quickly, but if we look at OI changes as it stands it's a 15% increase on ETH with funding largely positive which means there are a lot of levered longs. For spot positions you are fine but for levered positions you have to be very careful about potential whipsaws. Funding on alts was pretty crazy yesterday too but I think a lot of that leverage got wiped out. In general I think the move here is to have big spot longs in your favourite alts, and used leverage trades to buy the big dips when liquidity cascades for quick scalps. Yes, it means we're back to no sleep szn.
**NFTs** - A bit of a drop in NFT floor prices but tbh it looks like things are down about 3-5% which is not bad considering ETH was up like 10% yesterday. It's still a win in $$ appreciation and you'll see that many NFTs are now meaningfully off their lows to the tune of multiples in that currency. My guess is we may see some profit taking at some stage as I think the ETH rally is going to continue and some may feel more inclined to hold onto the outperforming asset...but this is nothing more than a conjecture and I could well be wrong. My internal conversations definitely comprise of people wanting to put money back into NFTs (particularly Punks) and historically that's what has led these cycles or mini cycles. Personally I am at a stage where I'd rather stay in liquid ETH/altcoins in case any compelling opportunities present themselves (I believe they will) but I have a sharp eye on what's going on in NFTs at the moment.
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