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Today’s email is brought to you by MilkyWay - Celestia’s First Restaking Protocol

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In today’s newsletter:

🔎Some market thoughts

📊On-chain alpha

😂Crypto meme of the week

🗞️The latest DeFi news

🔎Some market thoughts

It’s been another crazy week. On Monday, most people on Crypto Twitter debated if BTC hit its cycle top. On Tuesday, after a small pump, everyone suddenly turned bullish again.

I find it fascinating how quickly the sentiment in this space can change.

The truth is that no one can be fully emotionless in a highly volatile market like crypto.

But ideally, you should never let emotions drive your decisions.

In this issue, I’ll share what I believe will happen next based on historical data & other factors and cover both the bullish and the bearish arguments.

Let’s dive in 👇

February is historically great for BTC in the post-Halving year

In both sq7 and the 2021 bull cycles, BTC dipped in January, and it eventually resumed the uptrend at the beginning of February.

I wouldn’t be surprised if this year the same thing happens. Markets have always been cyclical and there’s one more key thing to consider:

Donald Trump’s inauguration is scheduled for January 20.

And according to the Washington Post, Trump is expected to sign executive orders related to Bitcoin in the first few days of his administration.

This could be the catalyst that triggers a market rally in February.

Bitcoin Dominance is still at local highs

I know that I’ve mentioned this metric many times in the past few months, but I’ve done it only because I consider it a key indicator.

As some of you already know, the real altseason historically happens only after the BTC dominance starts decreasing at a very fast rate.

Interestingly, in 2017 and 2021, the same thing happened:

BTC dominance started dropping significantly in late February / early March.

So the fact that the BTC dominance is currently still close to local highs and that we haven’t seen a proper altseason yet isn’t unusual.

If this time isn’t different, and it usually isn’t, the best market phase for altcoins could start at the end of February or in early March.

Trump is allegedly considering creating a US reserve for altcoins

This is just a rumor for now, so take it with a grain of salt.

But imagine the impact on the altcoin prices if a US reserve for altcoins is established. Most regular ppl still see crypto as a giant ponzi scheme.

If the world's largest national economy would launch a national crypto reserve, this would significantly contribute to legitimizing the crypto industry.

I could go on and on with dozens of other arguments that support the bullish thesis, but let’s also talk about a few bearish arguments:

A huge amount of altcoins is being unlocked every month

According to Tokenomist, $20 billion worth of tokens have been unlocked in the last two months of 2024 alone. And Tokenomist tracks only 383 tokens.

This is because of the low float high FDV meta.

To reach a high fully diluted valuation (FDV) at launch, many VC-backed tokens have launched with a very small % of their total supply in circulation.

In the long run, this creates a lot of selling pressure and makes it harder for most altcoins to pump even when new liquidity flows into the market.

That’s one of the reasons why I believe that many of the tokens that were launched in the past 1