🟣 Bitcoin sneezes and ‘alts’ catch a cold

A few percent dip in Wednesday trading has crypto twitter seeing red

There’s a proverbial sea of red in the crypto markets this dump hump day following yet another low-timeframe rejection by bitcoin off the $52,400 area.

Majors like Solana, Avalanche and Polygon are down 2-4%, while countless smaller names are off high single or even double-digits.

The sentiment shift is palpable, which is surprising considering that Total3 — a measure of the crypto market cap excluding BTC, ETH and stablecoins — is still just about 3.5% off its February highs, retesting the end-of-year peak that served as resistance but flipped to support this month.

You have to be pretty paper-handed to be panicking here as BTC holds above $50,000.

That said, momentum is waning up to a two-day timeframe, so we could be entering a more prolonged corrective phase.

Speaking of correcting, the preternatural pump of the STRK token on its first day of trading endured a demonstratively dour denouement, as the token shot skyward to as high as $4 on some exchanges before crashing back down to Earth.

Its time as the number one layer-2 on a fully diluted valuation basis may have been short-lived, though, at $17.9 billion, the distance to Arbitrum on that score is just 2.7% at time of writing.

Mainstream equity market watchers are mostly fixated on the seemingly unflappable juggernaut that is Nvidia, wondering for the umpteenth time if it has finally topped out for a while ahead of its Q4 earnings release after the closing bell in New York.

As a crypto-centric bunch, it’s amusing to note that today’s market cap for NVDA alone ($1.68 trillion) is about the same as crypto’s total market cap excluding stablecoins. The tech giant’s performance has doubled bitcoin’s since the start of the year.

— Macauley Peterson (X: @yeluacaM | Farcaster: @Macauley)

STRK, before and after airdrop claiming.

That high-volume spike is not a data error, but the actual price reaction of the STRK token shortly after it became claimable, shown here on the Aevo futures market (4-hr chart), where it has been trading since the Feb. 14 announcement.

The price jump and subsequent dump was mostly done in the first hour of trading, and the token has returned to more or less its pre-launch baseline.

The real test will come after April 15, when about a third of the total supply gets unlocked, according to the team, and investors’ cliff date, which comes sooner than critics argue is “normal.” 

According to starkscan.co, as of today, “active accounts” are now higher than their Feb. 14 peak and even the airdrop-farming frenzy months from September to November.

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community and more, with 2023 being the fourth-largest year for crypto venture capital.

Ethereum’s Dencun upgrade is scheduled for March 13. It will introduce several high impact changes, with the most notable being EIP-4844. As a result, gas costs on layer-2s will drastically decrease, and the Ethereum network will be one step closer to its end state of danksharding. Dencun should serve as a fundamental catalyst for ETH and layer-2 assets.

For an industry plagued by a struggle to communicate its vision en masse, Dixon’s a timely messenger. He’s also one of the more prescient investors you’ll find in emerging tech today.

With per-block rewards for bitcoin miners set to be reduced again in April, whether or not BTC’s price surges like in previous cycles remains to be seen.

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.