February Narratives & Catalysts to Watch
Are we back? Gm all. Sorry for the interruption in content, we had a new addition into the IRL Onchain Wiz family while I’ve been simultaneously putting finishing touches on chainEDGE for our formal launch in a few weeks. We will be ramping back up the content now, with some whale watching on Tuesday using our new and improved chainEDGE data and filters.
From a market perspective, risk has come back on, with ETH up ~22% from my“market bottom” call, and with certain alts like BONE up significantly more YTD, even after the recent pullback. Narratives and catalysts are back in style, so the below is an aggregation of the top narratives and catalysts in February/early March. As a reminder, these posts are for those of you that don’t have the time to spend all day researching what’s hot on twitter.
Despite the recent pullback in ETH and more violent sell off in some alts, smart money (per Nansen) has not seen a massive change in stablecoin holding percentages, so risk appetite is definitely still out there:
A quick visual overview courtesy of QuantMeta of what narratives have been driving the market across Arbitrum coins, AI coins, LSDs (with renewed focus since the regulatory crackdown of staking at CEXs), among others
Below is a quick cheat sheet for all things exciting in crypto today in no particular order (none of these are recommendations, please do your own research).
The rDPX v2 Paper came out (again) in Late January, sending the token to $60, which was a 62% move from our Trade Idea in September. The token has since pulled back to ~$42, but it will surely pump again as its Testnet and full launch materialize over the coming months
Perp szn is still alive and well, with GNS hitting an ATH of $8 last week, and it still up more than 2x from my own Top Trade Ideas for 2023.
GMX also hit its ATH this month of ~$76, and it sounds like the launch of Synethics is getting closer for the protocol
Other smaller perp DEXs have been doing well, with new launch VELA up ~2.7x since late January and now sporting a $26mm market cap
UNIDX is up ~73% YTD (also was a top trade idea from us)
Other new Perp DEXs have been doing well including LVL which is up 21x YTD!
GRAIL - the token is hitting ATHs of ~2,200, up nearly 9x from launch (we also covered why GRAIL could win the Arbitrum DEX wars here)
All the popular new launches on Arbitrum are coming to GRAIL, so look for this to be a continuing narrative of GRAIL being a Arb Bluechip
NFTs making a comeback
Volume has started picking back up from the lows of less than $100mm monthly in last Fall → February volumes are over $200mm already
Source: The Block Ahead of the BLUR airdrop on Feb 14th, look for NFT related coins to potentially outperform, including LOOKS, APE, MAGIC, X2Y2, SUDO/XMON
BLUR has also taken significant market share in advance of the airdrop:
More evidence that NFTs are coming back - more than half of NFT mints and January were profitable for mintooors:
FCTR - likely a future Arbitrum Blue Chip token is having its public sale on 2/20 (look out for scam coins). Given the platform already has 1,700 beta signups, this project should have plenty of upside if this adoption holds. Further, once they launch vaults, I will be putting forward an OCW vault using chainEDGE data to copy trade the best 0.01% of DEX traders in da world.
ZK Narrative:
This seems to be the current rotation right now in crypto, with MINA, DUSK, PIVX and ROSE doing well. Other small caps that could pump are FIRO and ZKS (which we have seen chainEDGE smart money starting to buy)
Source: chainEDGE
Here is a good thread with some small cap degen ZK ideas:
Liquid onchain staking tokens are also a hot narrative, which has been re-picking up steam in light of the SEC charging Kraken over CEX staking (LDO, RPX, FXS)
Notably, FXS is now number 3 in terms of market share for LSDs with its FRAX ETHER
If all US CEX staking is to be sanctioned, there is up to 4.4mm ETH impacted (per Hildobby)
SUSHI launching new DEX and Aggregation Product:
AI tokens
Another hot narrative but who knows how much steam is left in this one. With chatGPT getting massive amounts of funding and other actual AI projects getting more attention, this will a future trade for quick rotatoors
Coins include: FET, ORAI, AGIX, VXV, NMR, OCEAN
Massive SAND unlock on 2/14
SAND token is having a ~$275mm unlock this month against a $1.3bn market cap. So far this year most major unlocks have done little to price action, but worth monitoring if you are involved with this one
Ondo Finance is picking up adoption for tokenized treasuries and bonds onchain, with its TVL reaching $32mm in pretty short order
Source: Dune
Shibarium/BONE
There is a rumor that Shibarium will launch on Feb 14th → expect BONE to pump if that is the case
The smart money seems to indicate we are getting closer, with smart tokens held at ATH levels
Source: Nansen Thank you for bearing with this break in the content, and here’s to getting back after it!
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Disclaimer: This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
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Congrats with the addition to the family!