SOLANA BREAKPOINT ROUND-UP

Solana hosted its second conference, in Lisbon over the past 3 days, with the event finishing up yesterday. The amount of growth and interest seen in the network has been incredible over the past year – Here are some of the network statistics that were presented by Anatoly Yakavenko & Raj Gokal, the founders of Solana :

Solana is extremely fast & cheap when it comes to transactions as the team optimised for high throughput. Due to the blockchain trilemma, a trade off was made for scalability vs decentralisation, however the network continues to become more distributed as we see the node count increase (Bitcoin has +- 12,000 nodes).

Massive ecosystem growth has been observed and there is much more predictable scaling thanks to Moore’s Law. Almost all exchanges support SPL-based tokens & stable coins. Phantom has been a huge contributor to the active accounts statistics, which is now the flagship wallet in the ecosystem, providing a slick, seamless & easy user experience.

Above we see the Solana ecosystem in March 2021, according to Solanians data.

Just based off of these visuals, we can see the rapid growth and development in the Solana ecosystem. The ecosystem is diverse, spanning from DeFi which now has +$15B in TVL, to NFTs and Play2Earn gaming which began to explode around June. Metaplex has been at the centre of this growth.

Degen Ape Academy was a huge contributor to the NFT success on Solana. Audius has also been an interesting success, known as the decentralised Spotify. Audius has had 6.7m unique users in the last 30 days. Gaming, NFTs & user facing applications like Audius are the dApps that will onboard the next Billion people into crypto.

Since December 2020, there are now more than 1500 Solana developers. Exponential growth has been seen since June as a huge number of projects formed during the hackathons. More than 570 teams formed in the most recent hackathon in September.

With no clear timeline, the goal is to have 1 million developers in order to on board the next billion people. There is a strong importance for non-custodial use accompanied with low cost & latency.

There has been roughly $2B in venture capital invested into the ecosystem, with over $430m committed by 16 funds as of August. Some familiar & prominent names on this list include:

Solana Ventures has also given out grants of 1.7M SOL to 130 projects. $25M has been invested by Solana Ventures in 75 companies. In partnership with Lightspeed & FTX, they have now also launched a $100m gaming fund.

From a developers perspective, finality, cost, composability as well as the convenient exchange support & strong community has provided staying power. Consumers need fast, cheap and intuitive UX, and this is what Solana is focused on providing.

Web2.0 birthed over 50 million creators. NFTs fit better with the creative process as well as 95% of value, if not all, comes back to the creator unlike what we see on Youtube & Instagram, where the user is actually the product. Web3.0 changes this and establishes the creator economy, which is set to explode. 

If we compare monthly active users between todays largest social platforms & the largest NFT marketplace, we can see how early this NFT space really is: 

  • Youtube 3.3B MAUs
  • Instagram 1.4B MAUs
  • Tik-Tok 1B MAUs
  • Pinterest 0.5B MAUs
  • Twitter 0.4B MAUs

Opensea, the largest NFT marketplace, only has 300,000 monthly active users, which is 0.075% of Twitter’s MAUs, the smallest on the list of social networks. 

The upcoming trends were emphasised strongly over the past 3 days, which is NFTs using the Metaplex standard, gaming, social tokens & DeFi. With the massive success of Axie Infinity, it is clear P2E is a strong use case for gaming and onboarding users – Axie Infinity has 2 million daily active users. Gaming & collectibles are culture and it is relatable. Once users have played and they are in these virtual economies, they are going to ask “what next?” 

Aside from crypto, gaming is the fastest growing entertainment category in the world. Play2Earn is the first phase of blockchain gaming, but we are yet to see traditional games using this concept.

Another interesting development will be the convergence of DeFi x Gaming to on board more users as well as brands engaging with their users through NFTs, which could replace loyalty programmes. NFTs are an entirely new distribution channel so expect more major brands to leverage NFTs, providing digital content, IP & digital identity. 

With the NFT & gaming craze, DeFi price action has been rather quiet, however other metrics continue to see strong growth beyond price. An interesting project, Neon recently raised their 1st round of $40m. A problem we see is the blue chip projects on Ethereum like Sushiswap & Curve aren’t able to bridge to Solana. Neon solves this by bringing EVM compatibility to Solana, without the need to modify contracts in most cases.

Apart from bridging blue chip dApps from Ethereum like market makers (Sushiswap), borrow/lend platforms (Aave,Compound), NFT marketplaces (Opensea) & yield aggregators (Yearn), Solana has it’s own ecosystem that is flourishing:

Serum – Market Maker

Mango – Borrow/Lend

Solanart – NFT Marketplace

Sunny/Jupiter – Aggregators

With the offerings we see in DeFi, it is hard not to see a future where banks & enterprise lose customers to these more user-centric protocols. These institutions don’t want to lose customers, so it is also likely we see DeFi used in the backend while FinTech sits on the frontend.

Wall street banks are looking for more crypto offerings beyond being spot long, and this has led to the use of DeFi, borrow & lending platforms. Pricing credit risk is extremely important for institutions and they want to know they are regulatory compliant and removing operational risk. 

Solrise, a decentralised asset management protocol, is now the 1st KYC’d DEX on Solana. With the use of Serum order books & Civic digital identity, this has been made possible, allowing for fund managersWe will likely see more OTC & KYC infrastructure being built. DeFi markets are actually much less opaque than TradFi and embracing this as a regulator will benefit them, using it to their advantage to monitor markets. 

Innovation happening across the DeFi space, although in the shadows of gaming & NFTs, will see massive growth in the next 6-12 months as we aim for the next milestone of $1T locked in DeFi.

Different users need different products, in different formats & this infrastructure will continue to be built out to take 1-10M users to 100M-1B users. To stay up to date with what is transpiring in the markets, make sure to subscribe to our blog for updates directly to your mail. 

CRYPTO MARKET UPDATE 03/11/21

After reaching new All-Time-Highs on Bitcoin 2 weeks ago, price has begun to stabilise, with $58,000 holding as support. Price action is firming up for a run toward $82,500, however, we are not out of the woods just yet.

BTC DAILY TIMEFRAME

Ethereum, on the other hand, looks a lot more primed for a leg higher as we continue to print new highs. The counter trend line & last level of resistance have both been cleared and we continue to see ETH dominance climb, now at 20.95% – A new All-Time-High this year.

ETH DAILY TIMEFRAME

An interesting development has been seen this year, seeing ETH supply on exchanges continue to decrease. The supply has reached new lows that were last seen May 2018.

ETH SUPPLY ON EXCHANGES

While we see this metric continue to grind lower, we are seeing supply in smart contracts growing. Investors are staking their ETH for a yield and thus “removing” it from the market, creating a greater supply crunch.

ETH SUPPLY IN SMART CONTRACTS

On-chain activity is climbing, however, this has caused network congestion and gas fees have gone well above levels we saw a few months back. Although this is a pain for those transacting on the network – ETH burning is extremely bullish & there are massive opportunities in the Ethereum ecosystem.

MEDIAN GAS PRICE

Think of it as busy cities; New York, London, Singapore. They’re all extremely busy & much higher cost of living, but people still want to be there as it is more appealing and/or has more opportunities.

This upswing in gas fees has also caused Ethereum’s first ever deflationary week. Since EIP1559 has gone live, we’ve seen an average burn rate of 5.75E/min. In the last 7 days, we’ve seen the burn rate sitting at 10.46E/min.

ETH BURNT SINCE EIP1559

All eyes are on scaling solutions for Ethereum & how quickly these layer 2 solutions can be adopted. Once centralised exchanges allow for withdrawals directly to L2, we will likely see mass migration from L1 to L2. A fast implementation would avoid capital fleeing to alternative chains like Solana, which has seen strong demand this year – now surpassing Cardano in terms of market cap.

At 4PM (UTC+2) today, Thorchain will have its largest cap raise ever of 5M RUNE, allowing for +$100M new liquidity. RUNE’s value is directly tied to the growth of the platform – For each $1 of non-RUNE assets in a pool, there must be:

  • $1 of RUNE staked
  • $2 of RUNE bonded to secure the network

Therefore, the floor value of RUNE’s market cap is 3x the value of non-RUNE assets staked.

RUNE DAILY TIMEFRAME

This fundamental factor as well as the expectation of main net launching in December has caused the recent run-up.

TIMES SQUARE

Shoyu went live early this morning with a first look at the metaverse art galleries, which look incredible. Not all features are available, but the experience is immersive.

For those not familiar, Sushiswap, the community-owned DEX have launched a metaverse experience & NFT marketplace. It will be interesting to see if this project can become the “community-owned” Opensea.

100% of the fees (2.5% of all trades) goes to xSUSHI holders. To acquire xSUSHI, stake your SUSHI on the dApp at sushi.com

SHOYU NFT

Although NFTs cooled off, this is not a fad and we can see the interest & demand for the Metaverse. It is evident in recent events; Facebook’s rebranding to Meta, Sandbox raising $93m in a round led by Softbank or the extreme inflows we’ve seen in Decentraland’s token MANA.

MANA CIRCULATING MARKET CAP

Another interesting project in the NFT/Blockchain gaming space is Yield Guild Games. This is a DAO (Decentralised Autonomous Organisation) which seeks to provides on-ramps to Play-to-Earn gaming. They are creating virtual economies using yield-generating strategies in the form of scholarships. The barrier to entry for some of these individuals may be too high – YGG aims to fix this by acquiring the scarce, productive NFTs to lower the barrier to entry for all participants.

They are also actively investing in the sector, whether that be blue chip NFT projects like Axie Infinity or new start ups. In that case, the YGG token could be a potential “index” for the blockchain gaming space.

For those subscribed to our Youtube, you would have seen our video on Sandclock’s launch. $QUARTZ will begin trading on Sushiswap today around 6PM (UTC+2), as well as the rewards on Sushi Onsen Programme will go live with APYs around 100% (not finalised).

SANDCLOCK

The dApp ideally launches mid to late November, however expect a launch within 5-6 weeks as well as potentially being launched on Olympus Pro. For more news on the latest projects, head over to our YouTube channel, subscribe & hit the notifications bell icon to receive notifications on our next upload & for more updates like the one above, subscribe to our blog for updates directly to your email.

INDICES MARKET OUTLOOK – 2 NOVEMBER 2021

Market sentiment in the United States remains rosy throughout earnings season as NASDAQ, the Dow Jones and S&P500 all gained +3.52%, +0.70% and +1.59% last week respectively.

In terms of risk events for last week, there were two main things investors were keeping an eye on. Namely, earnings reports for Apple and Amazon as well as the US GDP numbers. Although NASDAQ climbed a monstrous 3.52% last week, Apple and Amazon (two of the biggest constituents in NASDAQ) both failed to meet their earnings expectations resulting in their stock price lowering after hours. With the US GDP numbers coming in well above target, this seemed to have steadied investors nerves as we closed out the green week.

Although supply chain issues and elevated inflationary pressures continue to weigh on market sentiment, forecasts remain “positive” going into the rest of Q4. Earnings reports will remain relevant in the short term outlook, but all eyes will be on the FOMC Monetary Policy decision on Wednesday as well as NFP data being released on Friday. As per usual, investors will looking to monitor the health of the labour market with many hoping to see a number above 500k to remain positive.

With regards to the FOMC Meeting, they are planning to announce the beginning of tapering bond asset purchases. Now while this might not bring much short term volatility to the market, the overall tone of the meeting could dictate a sell-off in risk assets or a continuation. Fundamentally, Fed tapering and a rise in yields should affect tech evaluations, but in my opinion, any pullbacks would be transitionary.

FUNDAMENTALS FOR THE WEEK AHEAD

Looking at NASDAQ on a technical front, price has managed to break above the inflection zone highlighted in last week’s blog post and has printed a new ATH. We saw 2 days of indecision around the previous ATH before price eventually printed that bullish engulfing. In terms of short term outlook, the path of least resistance seems to be upside as usual. Next target being the psychological level of $16 000. Should fundamentals come into play and we see that short term pullback, we can look at $15 700 as the first level of potential support followed by $15 600.

NASDAQ DAILY TIMEFRAME

The Dow Jones has enjoyed a string of good days for the past two weeks as bulls have taken control and simply looked to the upside. The only form of a pullback seen was down to $35 500 before price reached the $36 000 mark. As we all know, price cannot continuously climb without seeing a healthy retracement which could be coming in days to come. Should this happen, we can expect the first level of support to be around the psychological level of $35 500. Should price drop any lower, we can expect our long term daily trendline to act as a form of dynamic support.

DOW JONES DAILY TIMEFRAME

As always traders, exercise healthy risk management and we hope you have a fantastic trading week ahead. For more updates like the one above, subscribe to our blog for instant updates to your mail or join our Telegram Trading Floor via our website at http://www.aspirefx.co.za.

INDICES MARKET OUTLOOK – 25 OCTOBER 2021

Market sentiment was mixed last week all over the world, but US indices managed to come out with a green week. NASDAQ, the Dow Jones and S&P500 closed the week out at +1.38%, +1.11% and +1.64% respectively.

The markets looked poised for an interesting week with a large docket of risk events alongside 2 of the 3 US indices being at their All Time Highs. In terms of risk events this week, although there are many, these will get the ball rolling as many investors are focused on the GDP results coming out from the US on Thursday. Friday also brings us the PCE Deflator, which happens to be the Fed’s preferred inflation statistic. With one of the main fundamental themes being monetary policy, a few high profile central banks are due to weigh monetary over the coming week.

FUNDAMENTALS FOR THE WEEK AHEAD

This week also brings us earnings reports from FANG, which could potentially bring some turbulence to the market. Facebook will be reporting 25th of December after the US session has ended. Google, Microsoft and Twitter report tomorrow. Amazon and Apple are set to report on Thursday. Many of these stocks have the potential for upside, but so does the 10 Year Treasury Yield. With the yield rising on Bonds, investors could potentially go for the safer option and take profit on their stocks. This could keep valuations in check for multiple high-growth companies.

US 10 YEAR TREASURY YIELDS DAILY TIMEFRAME

Looking at NASDAQ technically, price has come to a stand still in the $15 350 – $15 450 region with consolidation forming on the daily timeframe after price had that bullish run up 2 weeks ago. Investors may be stalling as they await numbers from earnings reports as well as the GDP numbers being released this week. If price manages to break and close above the $15 500 region, this would validate further potential upside on the tech-heavy NASDAQ. On the opposite side of the spectrum, a close below the $15 285 region could bring bears back into play leading to a short term correction. All in all, fundamentally, things look bullish for NASDAQ.

NASDAQ DAILY TIMEFRAME

The Dow Jones managed to create new all time highs during last week as we saw price break and retest the psychological level of $35 500 with ease. Friday’s daily candle (22/10) closed as a bearish doji which could be a sign of exhaustion and indecision at the highs. PA will interesting this week mixed alongside the risk event docket. Going forward, we can assume $35 500 would now act as support until it is broken. The path of least resistance seems to be upside. Should we see profit taking occur at the highs, we can expect a correction into one of our Fibonacci levels before seeing new highs in the weeks to come.

DOW JONES DAILY TIMEFRAME

As always traders, exercise healthy risk management and we hope you have a fantastic trading week ahead. For more updates like the one above, subscribe to our blog for instant updates to your mail or join our Telegram Trading Floor via our website at http://www.aspirefx.co.za.

A WEEK IN THE WILD, WILD WEST

It has been a wild week in the crypto markets with Bitcoin briefly reaching a new all time high on Wednesday & Ethereum falling around $10 short of a new all time high. Late entrants to the market getting long, were punished with a squeeze lower, as they levered up in anticipation of a breakout. The largest price drop being observed on Binance US, witnessing a massive flash crash as low as $8200. This was however, not the case on all exchanges, as we saw FTX pricing only drop to $58,500.

BTCUSD BINANCEUS

This is a subtle reminder that shakeouts of leverage are real & it is a much more sound idea to accumulate a spot position, than to lever up, and face the risk of liquidation.

The Pro Shares Bitcoin Strategy ETF went live this week on Tuesday & has seen massive demand already, with $1.1B inflows observed on the first 2 days. This comes as a slight surprise, as investors would’ve preferred a spot-based ETF. Being a futures-based ETF, the price will follow its basket and not the underlying asset, BTC. When looking at the basket, there aren’t just BTC futures contracts, but also treasury bills & repo agreements. This essentially means, when Bitcoin goes up, it will outperform the ETF. A spot-based ETF would solve this & have much lower costs overall.

Outside of Bitcoin news, the Layer 1 war continues to heat up with SOL, LUNA, DOT & ETH being the most promising. Next week, a proposal will be initiated to burn 90M of the LUNA supply, increasing the UST supply by $3-4B – leading to swap fees accruing & increasing staking rewards massively. The DOT parachain auctions are also coming to main-net in November & the highly anticipated ETH merge is still expected Q1 2022.

Speaking of Solana. After launching their NFT collection, one of the most highly anticipated Play-To-Earn blockchain based games, Aurory, will be launching a token. The market cap for the NFT collection is currently $61.5M with a floor pricing of +-23 SOL ($4729).

AURORY IDO

At the time of writing, there are still 25 hours left till the sale period ends. 7% of the supply has been allocated to the IDO, with +-$90M contributed so far. At these prices, the valuations are rather hefty, however prices can still change as individuals choose to withdraw contributions during the sale & grace periods. For those who are familiar to Mango Markets & Parrot, will know that the initial contributions were $500M & $240M respectively, and then these contributions dropped to $70M & $80M respectively.

When observing the Solana ecosystem, there is no clear winner in the P2E category whereas Axie Infinity (currently valued at $7.5B) is the clear winner on Ethereum. Axie Infinity also just raised $152M in series B funding led by A16Z. It will be interesting to see who are the dominant forces established on Solana, with Star Atlas & Aurory being at the forefront.

PROTOCOL REVENUE – 180D

One of the largest players in this space, who is embracing NFTs in the Solana ecosystem also made headlines this week. The founder of FTX, Sam Bankman-Fried has done it again, raising $420,690,000 from 69 investors. Yes, you read that correctly.

Sam Bankman-Fried

In what could have been a huge exploit on the Polygon network, turned into a win for everyone this week. A bug was found in the plasma bridge that could’ve resulted in an $850M loss, but a former cyber security expert, Gerhard Wagner was able to fix the bug & secure the funds. He was awarded $2M for his white hat efforts.

IMMUNEFI BOUNTY

Speaking of Polygon, there was a new & exciting project launched this week, KlimaDAO, an algorithmic carbon-backed currency. After an IDO & LBP which took place on Ethereum Mainnet, the project successfully bridged to Polygon. On a high level, the project plans to bring carbon credits on chain, locking them into the treasury. This in turn effects the supply, pushing the price of carbon up – which Klima is backed by.

You might be thinking, ” but why?” – Well to back track slightly, companies buy carbon credits to offset their carbon emissions. The price of these carbon credits differ and there isn’t an efficient carbon market. The price to offset emissions is cheap, so companies pay to offset, continuing to pollute at a cheap price, rather than changing operations. By raising the price of carbon, we can force companies to change the way in which they operate their businesses, having a positive impact on climate change.

KlimaDAO UI

Currently, the KlimaDAO dApp is offering massive APYs, using the same rebasing mechanisms as OlympusDAO. The incentive alignment of this project is exciting to see play out & we hope to see more mainstream adoption.

For more updates like the one above, don’t forget to subscribe to our blog to receive updates directly to your mail. Have a great weekend & check back in next week.



INDICES MARKET OUTLOOK – 4 OCTOBER 2021

As we go into Q4 for 2021, the US equities market looks to be shaping up to be a more volatile quarter as there looks to be potential for a sector rotation.

The main focus of investors for the past few weeks has been the ongoing fiscal situation happening in the US alongside data relating to monetary policy. As Democrats look to pass another fiscal stimulus package, investors continue to see this as a positive thing for the future outlook. Supply Chains have slowly come back into regulation following the pandemic which will allow economic data to establish a firm footing once again.

VIX FEAR GAUGE DAILY TIMEFRAME

Although all of this sounds positive, two things to take note of going forward is that of VIX (image above) and the 10 Year US Treasury Yields (image below). With the bullish trending observed in the VIX gauge, we are taking note of potential fear within the market. Said fear is persuading investors to shift their money from risky stocks (Technology) to the “safety” of the US Dollar. In order to do this, they need to sell their stocks in order to acquire Dollars to purchase Treasury Bonds which in turn sends Treasury Yields higher. Higher Yields = Lower evaluations for stocks. And this is how the sector rotation from technology to cyclical stocks begins.

10 YEAR US TREASURY YIELDS

With risk events being the main focus going forward, we have a jam-packed week in terms of fundamentals with US Non-Farm Payrolls being the main thing on everyone’s radar. A lower outcome risks derailing the central bank’s lose policy unwinding. Take note of other events scheduled for this week as investors are still looking for any clues with regards to economic growth as well as employment growth.

FUNDAMENTALS FOR THE WEEK AHEAD

Looking at NASDAQ technically, this week will be vital as we are currently trading at the 100 Day EMA (black line) which could potentially act as dynamic support going forward. We also have a liquidity zone stemming from Mid June/July around the $14 550 handle which is lining up to act as support as well. Should said levels be broken, NASDAQ’s next target will be the psychological level of $14 000. The 10 Year Treasury Yields look like they’re going to play a role in the future price action of NASDAQ and there are no signs of a proper bullish reversal just yet.

NASDAQ DAILY TIMEFRAME

In terms of the Dow Jones, price is still technically bearish making a series of LLs and LHs over the course of the past few weeks. Should we see the sector rotation occur within the equities market, this could be the catalyst for a switch in the Dow’s trend. At the time of writing though, we are still bearish with downside targets aimed at the psychological level of $34 000. Only a break and closure above the 35k level would interest me in a potential shift in momentum to the upside.

DOW JONES 4 HOUR TIMEFRAME

As always traders, exercise healthy risk management and we hope you have a fantastic trading week ahead. For more updates like the one above, subscribe to our blog for instant updates to your mail or join our Telegram Trading Floor via our website at http://www.aspirefx.co.za.

INDICES MARKET OUTLOOKK – 27 SEPTEMBER 2021

A week of recovery was observed in the US equities market last week with NASDAQ, the Dow Jones and S&P500 managing to close the week out at +0.14%, +0.75 and +0.64% respectively.

Although the Central Bank is gearing towards a reduction in monetary stimulus, the fundamental backdrop of last week seems to be the catalyst of a green week in the US equities market last week with Jerome Powell hinting at asset purchase tapering being completed by the middle of next year mixed with the statements made at the FOMC Meetings which sent stocks rallying as well as the 10 Year Treasury Yields.

10 YEAR TREASURY YIELDS DAILY TIMEFRAME

Looking at risk events for the week ahead, it seems investors will be most interested in speeches from Capitol Hill, which will see Jerome Powell as well as Janet Yellen testify in front of Congress, as they look for clues on inflation and the Central Bank’s view on it. This week also sees PCE data being released which is normally the Fed’s preferred gauge of inflation. We should see some volatility on Thursday as we see GDP as well as Jobless Claims being released too.

FUNDAMENTALS FOR THE WEEK AHEAD

Looking at NASDAQ technically, the dip was bought. As highlighted in last week’s blog post, bulls managed to take control around the $14 850 region as price formed a morning star pattern. At the time of writing, price is trading below the Prior Week High which could act as resistance, but with price being as bullish as it is, we will most likely see a break and retest of this level before continuing higher into the $15 500 region. However, one factor to take into account is the rise in 10 Year Yields. A rise in Yields normally results in a dip in the stock market with tech (i.e NASDAQ) being the most sensitive. Should tech take a hit due to yields, bears could be targeting the Prior Week Low where we saw NASDAQ reverse from last week.

NASDAQ DAILY TIMEFRAME

Similar price action on the Dow Jones as we saw bulls take control from the $33 600 region which is a previous level of liquidity. At the time of writing, price is trading around the psychological level of $35 000 which could act as resistance going forward unless it is broken and retested to the upside which would then bring the next level of resistance into play, namely $35 200. Should we have a technical correction occur, we could see the $34 500 level being tested once more before continuing higher.

DOW JONES DAILY TIMEFRAME

As always traders, exercise healthy risk management and we hope you have a fantastic trading week ahead. For more updates like the one above, subscribe to our blog for instant updates to your mail or join our Telegram Trading Floor via our website at http://www.aspirefx.co.za.

INDICES MARKET OUTLOOK – 20 SEPTEMBER 2021

BUY THE DIP! Yet another red week within the US indices market as we saw NASDAQ, the Dow Jones and S&P500 closed out the week at -0.97%, -0.42% and -0.97% respectively.

US indices made a valiant effort to try and hold support throughout the course of last week but to no avail as bears came into the market on Friday with continued bearish momentum at the time of writing. The markets seemed to be relatively unphased following weak CPI and Jobless Claims data coming out of the US.

On this week’s docket in terms of risk events, all eyes will be peeled for the FOMC Meetings happening. The Federal Reserve will meet on Tuesday and Wednesday to discuss its monetary policy in the midst of a build-up in fundamental anticipation. Investors however seem to be slightly apprehensive towards this as the Fed is known for playing down the demand for tapering of asset purchases. This being said, I would not be surprised if investors position themselves for both ends of the spectrum regardless of what comes out of the FOMC meetings. Should said situation play out, we could see a reduction in liquidity which could cause stocks to sell off before we actually see the dip bought up. Jerome Powell will be speaking on Friday as well which could throw another wrench into the works.

FUNDAMENTALS FOR THE WEEK AHEAD

Looking at NASDAQ from a technical perspective, we can see how the $15 400 region was holding as support until Friday closed below with a bearing engulfing candlestick. At the time of writing, NAS is falling into zones of high confluence. Price is currently approaching the 61.8% Fib retracement level which lines up our 50 day EMA (red line) as well as with a previous level of resistance turned potential support going forward. Should investors dry some liquidity from the market, we could potentially see dips into our 78.6 Fib level in line with the ascending trendline stemming from lows in July and August as well as the psychological level of $15 000.

NASDAQ DAILY TIMEFRAME

Similarly to NASDAQ, the Dow Jones is also approaching zones of high confluence where we could see an injection of liquidity. Last wee saw the Dow try and hold support on the psychological level of $34 500 to no avail. At the time of writing, price is sitting at a Daily trendline as well as the psychological level of $35 000 in line with our 61.8 Fib retracement level. Should this level not hold, we could see dips into our 78.6 around the $33 500 region. Do not attempt to catch a falling knife. Wait for reversals on the lower timeframe before entering larger positions.

DOW JONES DAILY TIMEFRAME

As always traders, exercise healthy risk management and we hope you have a fantastic trading week ahead. For more updates like the one above, subscribe to our blog for instant updates to your mail or join our Telegram Trading Floor via our website at http://www.aspirefx.co.za.

GBPAUD – TECHNICAL ENTRIES OVER THE PAST WEEKS

If you’ve been trading GBPAUD the last few weeks you could have potentially made some decent profits swinging it to the downside, and here’s how we did it:

From the 24th – 27th August GA was stuck in consolidation. The way we identify consolidation is by spotting 2 significant highs that are holding as resistance and 2 significant lows that are holding as support. We then highlight the consolidation awaiting a breakout as displayed in the image below. ( 30 min timeframe )

GBPAUD 1ST ENTRY

As displayed in the above image, the advantage of spotting consolidation is when the breakout occurs. More often that not, once the breakout occurs the pair has chosen its direction. Your first entries can be taken on the retest of the consolidation.

Upon monitoring our first position, we noticed GBPAUD was trading in a descending channel. We plotted trendlines to map this out and then gained our second position on the third touch of the descending trendline displayed with a blue arrow on the image below.

GBPAUD 2ND ENTRY

We rode both these positions to their targets of 185 and 155 pips respectively. We did, however, gain one more position.

The final position was taken when we broke out of the descending channel and retested the bottom end of the channel at our phycological level of 1.87500 ( 1.86560 to be exact ). With our target being 1.85700 we gained another 180 pips. This is displayed in the image below with the most recent entry being displayed with a blue arrow.

GBPAUD 3RD ENTRY

At AspireFX we continue to preach sticking to a few pairs and mastering them. Once you’ve got the rhythm of a pair you start to understand it and place positions accordingly resulting in a much more profitable trading journey.

Since the price action displayed we have seen a 200 pip+ relief into the upside. Some key fundaments to look out for when it comes to GA next week are:

FUNDAMENTALS FOR THE WEEK AHEAD

As always traders, exercise healthy risk management and we hope you have a fantastic trading week ahead. For more updates like the one above, subscribe to our blog for instant updates to your mail or join our Telegram Trading Floor via our website at http://www.aspirefx.co.za.

MARKET UPDATE : CRYPTO FLASH CRASH

Yesterday, we saw a sharp sell off in the crypto markets with a massive leverage wipeout of around $3.5B in liquidations reported, with the real numbers likely being even higher. The flash crash saw BTC & ETH plunge -18.5% and 25% respectively off their recent highs. Over-leveraged traders were punished in the major deleveraging event.

BYBT LIQUIDATIONS

To put the cherry on top, gas fees on the Ethereum network spiked as high as 7000 with the recent NFT drop “The Sevens” making it impossible for many investors to transact. The liquidation cascade and panic to exit markets increased gas further. The gas fees to mint The Sevens was $5000 alone.

The Sevens

NFT’s have been responsible for Ethereum being deflationary as we see massive hype around these projects and their respective derivatives. Below we can see Ethereum’s first deflationary day as burned fees offset the block reward emissions.

The Sevens was responsible for nearly 1300 ETH being burnt yesterday, outpacing the community favourite NFT marketplace, OpenSea.

ULTRASOUNDMONEY

With this being said, OpenSea activity is slowing down, with daily volume dropping 50% since its 29th August high as well as daily transactions dropped roughly 30%. For what it’s worth, volume is still higher than what we saw in the first 2 weeks of August.

FUD OF THE DAY:

Yesterday we saw El Salvador enact the law to make Bitcoin legal tender. Some speculate this was a “buy the rumour, sell the news” event. Others point towards the technical glitches that were experienced with the official digital wallets – that was later resolved. The main point of concern for investors were the IMF stating this adoption of Bitcoin as legal tender would be a inadvisable shortcut & warned it was taking it a step too far. It will be interesting to see how the IMF retaliates, but the fact is, Bitcoin is now legal tender in El Salvador and they have acquired 550 BTC.

NAYIB BUKELE, PRESIDENT OF EL SALVADOR

According to a 21 post thread by Brian Armstrong, Co-founder and CEO of Coinbase, the SEC has threatened to sue Coinbase over a new lending program which was set to release soon, stating it is a security.

BRIAN ARMSTRONG, CO-FOUNDER & CEO COINBASE

In short, the SEC isn’t protecting investors or promoting fair & safe markets. Based on the thread, this seems to be intimidation tactics and a power grab. It is more accurate in saying they are preventing new entrants to the market than actually protecting current investors.

This isn’t the only regulatory FUD as we see regulators in Hong Kong clamping down on the asset class. This isn’t new, in May, regulators in HK proposed limiting access to crypto to those with portfolios larger than $1 million. This would effectively cut off access to 93% of the population. Since then, multiple exchanges have halted or limited trading activity in HK.


When looking at the total crypto market cap, we can see a max drawdown of roughly 17% as nearly the entire market collapsed. A few standout names that held up well and/or continued to make new highs : Solana and it’s ecosystem, Near and Algorand.

CHARTS.COINTRADER.PRO

DeFi, Social Media and NFT’s remain attractive as we see the healthy cleanse of leverage. Centralised exchanges like Kraken also had down time yesterday whereas decentralised exchanges remained functional – This is bullish.

Total value locked (TVL) in DeFi fell around 25% however recovered sharply. It appears crypto-asset TVL has fallen and stablecoin TVL has increased with an exception to a few protocols. It will be interesting to see how this trend develops.

DEFIPULSE

Overall we saw BTC outflows from exchanges with illiquid supply increasing and long term hodl’ers increasing their holdings. The trend is likely to take some time to recover and consolidate before the next leg up. To stay up to date with the market moves & for more articles like the one above, subscribe to our blog.