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Vibe check

The vibes are…weird.

Both bitcoin and ETH are down over 4% this morning according to Coinbase. Bitcoin’s clinging to $56,000 while ETH holds on to $2,300.

If you asked Ikigai’s Travis Kling, he’d say that there’s a new attitude taking over in crypto: “Pervasive quiet quitting.”

Yes, the quiet quitting concept that went viral a few years ago, where folks just stop doing more than what was expected of them. It was labeled as giving up — though I think we can agree that perhaps it’s a situational thing, and you don’t always need to go above and beyond without proper compensation… but I’ll hop off my soapbox now.

Kling, however, is much more focused on the engagement part of the quiet quitting trend.

“Crypto enthusiasts cannot see what is going to drive the next big leg up. No DeFi summer. No NFT summer. Gaming is currently DOA. Metaverse turned out to be a complete joke. Decentralized social media has flatlined. People are trying to get excited about crypto x AI, but I (along with many others) think that excitement is likely misplaced (at least thus far),” he wrote.

Sound familiar? Threads of this have certainly made their way into our reporting here on Empire this summer. David, for example, has been trying to use data to see when or if we could see the altcoin market pick up.

“Things continue to be really range bound and relatively quiet, which is interesting to me, as we come out of summer, that we’re still experiencing these kinds of quiet markets. I guess maybe people are waiting for elections,” Ledn’s John Glover told me.

To put it quite frankly, folks are struggling to see a catalyst on the horizon. Pair that with the seasonality factor that September tends not to be bitcoin’s month (though Glover would tell you that he’s not so sold on that type of historical read, given all of the changes bitcoin’s gone through).

But Glover does think that bitcoin breaking out of its funk could act as a rising tide for all of our crypto boats.

“Once we start to see some upward momentum in bitcoin. I think everything’s going to come higher with that. I don’t think it’s just going to be bitcoin. I think you could be pulled alongside that as well. I think it’s what’s going to spur on that appreciation in bitcoin prices. I’m still not certain what’s going to cause that, because we have seen a bunch [of] hodler wallet addresses…adding,” but that move probably won’t come until bitcoin tops $73,000.

As for when it could happen, that’s still anyone’s game. But it might not be dead ahead on the horizon, given that open interest on CME declined last week, which points to a reduction in long exposure, per K33.

“BTC futures premiums declined to 6.5%, its lowest reading since January 15, 2024,” the analysts added.

“So far this cycle, we haven’t even come close to bringing in the number of new people we have in prior cycles (new ETF investors excluded),” Kling pointed out, adding that this could be a bottom signal.

Despite the murkiness, there are still ranges to watch, Glover said, the bottom levels for bitcoin and ETH sit at $49,000 and $2,100 respectively. If a rising tide floats all boats….well, you get the picture.

While this may not be my most positive read so far, the silver lining here continues to be stablecoins, which sit at a total market cap of $169 billion per DefiLlama data.

Wake me up when September ends.

— Katherine Ross

Data Center

• The total crypto market has shed 5% over the past day, now at $2.07 trillion capitalization, per CoinGecko.
• RUNE and TON are worst-off after slipping by 11% and 12% apiece.
• HNT and XMR are bucking the trend, gaining over 10% in the past week.
• 399 pairs have been created through the new Ethereum memecoin launchpad Ethervista since its launch on August 31. Total inflow volume: $91.4 million.
• DAO treasuries are currently valued at under $20 billion, down from $42.5 billion at the March top.

God forbid crypto has hobbies

Crypto has a few traditions going for it.

Companies and startups regularly wage war with the SEC. The degens pump obscure digital novelties to sky-high valuations. And, after practically every all-time high, token prices collapse by 80% or more.

It isn’t just the shitcoins carrying that particular torch. Bitcoin has retraced by that amount (or more) three times since 2017 and ether has done it twice, although the latter has been much quicker about it.

Bitcoin usually bottoms out between 350 and 400 days after peaking, while ether has done it in just over 200 at the shortest and under 350 days at the longest.

The chart below shows bitcoin and ether corrections after local peaks across the past few cycles. We’re currently at around 200 days since the pico top.

Notice that ether has already retraced by 40% from this cycle’s peak

The real trick is bouncing back even stronger from these sustained corrections. The list of top 200 or so cryptocurrencies is littered with tokens that never returned to record highs — including even ether and sol.

This next chart plots tokens that made it to one’s that are still fighting over the past seven years. SOL, ETH and MATIC are the faded lines in the back. Those made it between cycles, even though MATIC is now struggling by comparison.

In the front are former top 10 cryptocurrencies that have largely missed out: IOTA, DOT, EOS and DASH.

All this is a reflection of crypto’s volatility. Cryptocurrencies may or may not run back their 80% corrections, but either way, they’re — apparently — pretty much inevitable.

This next chart sorts top cryptocurrencies by the date they last reached all-time high. Each dot is a different token, and they obviously concentrate around the tops of the past three cycles, in 2018, 2021 and 2024.

Dots to the right of the chart hit record highs most recently, while the ones on the left were much longer ago.

And coins gathered at the top have corrected the most — those at the very edge have lost practically all of their value compared to their all-time highs.

More than a dozen of the analyzed cryptocurrencies that set price records this cycle have already had their 80% drawdowns, including AEVO, STRK, WLD, W, ENA, DYM and DYDX.

Even more have lost over 60%.

As is tradition.

— David Canellis

The Works

• The Trump-backed World Liberty Financial project will be built on Aave and the Ethereum blockchain and will include decentralized borrowing and lending, CoinDesk reported.
• Tiffany and Lara Trump had their X accounts locked down after both were hacked and falsely promoted the World Liberty Financial project.
• Ripple’s Brad Garlinghouse said his company is not interested in going public in the US.
• Matter Labs cut 16% of its workforce Tuesday, Blockworks reported.
• TradFi companies are interested in transacting in bitcoin, Cantor Fitzgerald CEO Howard Lutnick said.

The Riff

Q: Which pseudo-indicator are you looking at?

The only one that matters: the frequency of “gm” tweets from former Binance CEO Changpeng Zhao.

Zhao, who is still in custody until the end of this month, hasn’t tweeted “gm” since December 4, 2023 (and not at all since a few weeks before he checked into prison in June).

Bitcoin traded for $42,000 before Zhao’s last “gm” and would go on to rally up to 80% over the next few months.

We already know how bullish a Zhao gm can be — bitcoin has gone up almost every time after those posts.

Calling it now: No god candle until Zhao shares his next “gm.”

— David Canellis

If we’re answering seriously, then I’m keeping an eye on the potential lows for bitcoin and ETH (especially as ETH hangs around $2,300).

If I were to have a little fun with it, then I’d say I’m teaching myself all about astrology thanks to Lexi Wangler of Mysten Labs.

Is crypto in retrograde? Do we need to keep an eye on what moon we’re in? These are all important questions to ask.

I, like Glover, take the historical data with a grain of salt at this point, but the smaller indicators like CME open interest make me think that perhaps some traders are reading into something (or maybe they’re farther along in their astrology studies and can better predict what’s about to happen).

— Katherine Ross