Gryphsis Cryptocurrency Weekly: Bitcoin Price Breaks $52,000 for the First Time
[2024.2.12 - 2024.2.18] Bitcoin (BTC) broke through $52,000 for the first time in 26 months this week, but its stalled momentum may signal an "impending" pullback before further price increases.Author: Gryphsis
Market and Industry Snapshot
Layer 2 Overview:
Last week, Layer 2s showed positive growth, with zkSync Era experiencing the most significant increase of 8.79%. Protocols like Ithil, Gravita Protocol, Teller, Interport Finance, and Starksport demonstrated noteworthy TVL growth rates.
LSD Sector Overview:
In the LSD sector, Ethereum deposits and total withdrawals both increased, with withdrawals showing a more noticeable rise of 2.51%. In terms of market share, stETH achieved explosive growth of 3-4 times, capturing nearly 80% of the total share, while swETH and wstETH decreased by 20.36% and 40.77%, respectively.
RWA Sector Overview:
Last week, the market capitalization of real-world assets grew by 5.45%, while the 24-hour trading volume fell by 2.92%. RWA tokenized treasuries rose by 1.88%, while the value of tokenized U.S. Treasuries decreased by -0.92%. Notable growth tokens include $MBD, $CHEX, and $LUMI, while tokens like $BKN, $BRTR, and $STBU experienced significant losses.
Main Topics
Macroeconomic Overview:
- US Stock V.S. Crypto
Major Events This Week:
- Bitcoin price breaks $52,000 for the first time
Weekly Protocol Recommendation:
- Paal AI
Weekly VC Investment Focus:
Ultiverse (4 M)
Lava Network (15 M)
Exverse (3 M)
Twitter Alpha:
@0xAndrewMoh on Instadapp
@stacy_muur on Metahorse Unity
@defi_blackjoker on ERC 4337
@wist_defi on AI
@DamiDefi on Soil Protocol
Macroeconomic Overview
This week, the stock market saw SPX and NASDAQ decline by 0.42% and 1.54%, respectively. In the coming week, keep an eye on the Federal Open Market Committee meeting minutes, CPI, initial jobless claims, S&P Global U.S. Manufacturing PMI, and crude oil inventories.
Major Events This Week
Bitcoin price breaks $52,000 for the first time
Bitcoin (BTC) broke the $52,000 mark for the first time in 26 months this week, but its stalled momentum may signal an "imminent" pullback before further price increases. The largest cryptocurrency by market capitalization rose 10% over the week, surpassing the 8% increase of the CoinDesk 20 Index (CD20), and its upward momentum has not stopped since the low of $38,500 at the end of January. This surge was accompanied by accelerated inflows into U.S. spot Bitcoin exchange-traded funds (ETFs), with BlackRock's IBIT absorbing over 28,000 Bitcoins this week.
However, Swissblock noted that the $52,000 region is a significant resistance level on long-term charts, having limited price increases in September and December 2021, and now poses a substantial barrier to the continuation of the rally. Swissblock's analysts wrote, "Given the rapid increase of about 33% in recent weeks, a pullback seems imminent and necessary, indicating that this rally is unsustainable."
The report also added that aside from a short-term decline, the market appears ready for higher prices as long as BTC can hold near the support level of $47,500; any upcoming correction could be a buying opportunity. "At this point, any pullback should be seen as a potential buying opportunity."
Institutional-grade cryptocurrency exchange FalconX also noted that "unusual" trading volumes support the upward trend into early 2024, the last time seen since the regional banking crisis in March 2023. FalconX's analysts wrote on Friday, "A decline in trading volume after a price increase has historically been a reliable indicator of false breakouts in cryptocurrency. The good news at this time is that the liquidity conditions surrounding the January rally remain generally healthy."
Analysts from 10x Research stated in a Friday update that Bitcoin could run towards a price target of $57,500 due to strong liquidity and increased demand for Bitcoin futures.
Weekly Protocol Recommendation
Welcome to our weekly protocol segment—here, we focus on protocols making waves in the crypto space. This week, we chose PAAL, a customized AI bot solution.
PaaL allows users to customize their own Bot by inputting commands and enjoy bot services across multiple platforms like Discord and Telegram. It may sound similar to ChatGPT, but PaaL offers more AI application scenarios, including:
PaaS (Paal As A Service): PaaS focuses on providing a wide range of AI-driven solutions to meet the unique needs of different vertical industries. Our expertise spans various fields, including but not limited to online gambling, financial trading, digital collectibles, and software-as-a-service (SaaS) applications with advanced Web AI features and conversational bots.
For example, a customized Twitter Bot that automatically responds based on its trained content when users mention or TAG the bot; Buy Alert Bot, which provides real-time trading alerts from exchange information sources; Stake Alert Bot, an innovative notification tool tailored for cryptocurrency, designed to provide alerts for staking transactions and updates, offering users important information to effectively manage and monitor their staking portfolios; Sniper Bot to enhance trading automation strategies, optimizing timing and execution.
MyPaalBot: MyPaal serves as a chatbot, MOD, researcher, and community manager, truly becoming a versatile crypto assistant.
PaalX: PaalX combines DEX, research platforms, social media, and more into one AI-driven toolbox for seamless trading. It optimizes trading efficiency and research outcomes by filtering and analyzing large amounts of data using AI tools, enabling informed and rapid decision-making.
The native token of PAAL is $PAAL, with a total supply cap of 1B, of which:
1% --- Marketing and User Acquisition: A more targeted approach that combines marketing efforts with strategies specifically aimed at acquiring new users, thereby promoting community growth and engagement.
1% --- Development Lab: Beyond pure development, this fund is dedicated to innovation, supporting the development of new features, and staying at the forefront of technological advancements.
1% --- Team: This allocation ensures we can attract, retain, and adequately compensate top talent, which is crucial for our long-term success.
1% --- Ecosystem: This is a multifaceted allocation that includes:
Investing in Startups: We are actively investing in promising startups now, with profits from these investments used for revenue sharing, which not only diversifies our income sources but also supports the broader crypto ecosystem.
RevShare: Continuing our commitment to sharing revenue with the community.
Buybacks: Tokens bought back now flow directly into the staking pool, thereby enhancing staking rewards and overall token value.
Paal, as an AI solution, provides whitelisted AI solutions for companies across various industries, forming a primary source of revenue; collaborations with other companies, such as advertising and cross-promotion, can bring additional profits; 1% of all $PAAL trading volume is taken as a trading tax; additional subscription services and product commissions, etc.
Source: https://rewards.paalai.io/
Paal's revenue is primarily allocated to the ecosystem foundation and stakers, with staking being the most critical part of the Paal economic model. Users can stake $PAAL, with different time periods and APR Vaults available, earning $ETH and $PAAL rewards. As shown, Paal has already provided a total of 645 ETH as rewards, with the $PAAL portion of the rewards coming from protocol revenue and buybacks.
Our Insights
Since the launch of the Staking mechanism in November 2023, its price has synchronized with TVL fluctuations, with the total amount of staked tokens accounting for 67% of the market cap, and the price of $PAAL has also broken historical highs, with a 97.39% increase over the past seven days.
Source: Defillama
Additionally, the official launched a staking incentive program on February 16, offering 140 ETH as staking rewards to users. Besides the aforementioned staking rewards, users can also gain potential airdrop opportunities from partners, enjoy exclusive features of the product, and investment opportunities in team-incubated projects like AIT Protocol. Following the launch of the program, the protocol's TVL increased by 10 M in a single day, indicating a strong market response.
Currently, Paal's average daily trading fee revenue is about $38K, and the revenue-sharing model of PaaL AI, combined with revenue generation methods, forms a cohesive dynamic structure. However, the current use case of the token is relatively weak, with only staking as a value capture. If it can expand the token's use cases in the future, Paal may experience innovative breakthroughs.
Weekly VC Investment Focus
Welcome to our weekly investment focus, where we reveal the most significant venture capital dynamics in the crypto space. Each week, we will highlight the protocols that have received the most funding.
Ultiverse
@UltiverseDAO is a social gaming metaverse that connects Web3 with an immersive, fully VR-compatible AAA virtual world. By empowering players with different economic capabilities to build mutually beneficial relationships, Ultiverse aims to create a pioneering MetaFi.
https://x.com/UltiverseDAO/status/1757759138959151421?s=20
Lava Network
@lavanetxyz aims to become a marketplace for blockchain data. It incentivizes node providers and decentralized application users to input market blockchain data into its network, similar to how Airbnb allows owners to monetize their unused space. The protocol enforces data quality, enabling node operators to utilize their bandwidth.
https://x.com/lavanetxyz/status/1758162588381405563?s=20
Exverse
@exverse_io is a free game that brings a new interpretation of AAA first-person shooter games to Web3. The three planets of Exverse—social, missions, and combat—cater to different gaming styles while maintaining interconnectivity within a single timeline, with users competing over an eight-week seasonal cycle. The game aims to foster community by allowing players to engage in social activities and even develop user-generated worlds in an ever-expanding universe.
Protocol Events
Pudgy Penguins briefly flips Bored Ape Yacht Club in floor price
Celsius distributed $2 billion of crypto to creditors, court document shows
Ether perpetual futures open interest surges, hits all-time high on Deribit
Uniswap V4 launch, featuring 'hooks,' tentatively set for Q3
Jupiter cancels Ripple XRP ETP investment after self-compliance inspection
Industry Updates
Japan's financial regulator encourages stronger monitoring of 'unlawful' crypto transfers
FTX creditors file class action against bankruptcy lawyers over ties to FTX prior to its collapse
House Financial Services panel explores combatting illicit finance in cryptocurrency
FCA issued 450 alerts against illegal crypto promotions in 2023
Court rules Genesis can sell over $1.3 billion worth of GBTC shares: Bloomberg
Twitter Alpha
There is a lot of Alpha contained in crypto Twitter, but navigating through thousands of Twitter threads can be challenging. Each week, we spend hours researching to curate insightful threads and bring you a weekly selection. Let's dive in!
https://x.com/0xAndrewMoh/status/1757980672290120157?s=20
https://x.com/stacy_muur/status/1758311925996499139?s=20
https://x.com/defi_blackjoker/status/1758146366797127721?s=20
https://x.com/wist_defi/status/1758182057534996674?s=20
https://x.com/DamiDefi/status/1758161829778403518?s=20
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