⚡DeepSeek's Impact: Was that the Top? What Onchain Data Shows
DeepSeek, Solana Top Signals and Why Nobody Makes Money Trading Crypto
Read Time: ~5 minutes
⚡Snapshot
What is DeepSeek and why is it making my bags go down?
Looking onchain for intel on market tops
Every onchain signal you need in 13 minutes
JUP-SOL APY farm on Kamino Finance
📖 Recommended Reads
Background on DeepSeek R1 and the potential AI power shift
⚡Is app revenue a top signal for Solana?
Indicator aligns with local Solana tops
⚡Nobody Makes Money ‘Trading’ Crypto
Where the vast majority of crypto participants make their money, and how to assess
DeFi bankruptcy: what happened?
⚡Nvidia erased 1/5 of its value in 2 days
Thanks DeepSeek
⚡Coinbase might overhaul their token listing process
Brian Armstrong says Coinbase’s current process is unsustainable
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🔢Onchain Analysis
Is the Top in for Crypto?
Let’s look onchain.
Despite the crypto price dip amidst turbulence in the US equities market, total stablecoin supply is still rising. Total stablecoin market cap is up 2.6% this week, representing new capital continuing to flow into the crypto ecosystem.
It should be noted however that in 2021/22, total stablecoin market cap peaked several months after Bitcoin. While stablecoin growth is a good sign of bull market starting and continuation in conjunction with other factors, we shouldn’t expect it to stop right when the market has peaked.
ETF flows are strong. Digital asset investment products saw nearly $2B of inflows last week. We however don’t have today’s data yet; given the palpable shift in moods, it will be worth seeing how much ETF flows react.
VC funding remains muted. In 2018 & 2021, VC funding rounds exploded after Bitcoin broke all-time highs. While total monthly funding is up from a year ago, it’s still below 2017 levels. There’s a strong chance that funding doesn’t reach its 2021 peak due to global liquidity, interest rates, and the hotter AI sector, but this certainly isn’t a top signal by any means.
Stablecoin borrow rates are elevated and have been for some time. This represents leverage onchain. When more market participants borrow stablecoins, the Borrow APY rises. Seeing 10-12% APYs for borrowing stables is normal in a bull market, but above 15% is an elevated rate.
Bitcoin MVRV Z-score is an indicator made to measure Bitcoin’s relative value. A value over 7 indicates the market is likely overvalued. Last time the indicator hit 7 was February 2021. Currently, we’re sitting at a value of 3, which indicates a fair market value for Bitcoin.
Trump launched two memecoins last week - one went to $75B FDV. In just about any universe, that’s a top signal.
The Crypto Fear and Greed Index reached 94 in November, it’s highest point since early 2021.
However, there are still reasons to be optimistic: the new US Presidential administration is actively pro-crypto, proclaiming their desire for the US to be the world capital of crypto. We’ll hear back within 180 days about plans for a “digital asset stockpile” and proposals for regulatory clarity.
People are likely overestimating the effect of regulatory clarity in the short term but severely underestimating it in the long term.
Changes in regulation and their consequences will take time. Bitcoin ran hard from $60k-$110k in less than 90 days. A local top or consolidation might be in order. Trends like memecoin mania may need to cool off to make way for real adoption. Either way, if you’ve done well this cycle, protect yourself.
The next set of flows into crypto could be governments, nation states and a swarm of financial advisors with the go-ahead to get their clients into Bitcoin.
In the meantime, at least we’ve still got Saylor.
🚜Farm of the Week
JUP-SOL on Kamino Finance
Kamino Finance is Solana’s leading lending marketplace and DeFi hub.
The JUP-SOL liquidity pair is earning massive fees due to heavy JUP trading after last week’s airdrop and Jupiter’s announcement that they’ll be buying back JUP tokens with trading fees.
How it Works
Head to the liquidity pool on Kamino.
The pool is quite simple. It’s automated and managed by Kamino.
The liquidity required is single-sided, meaning you can either provide JUP or SOL, you don’t have to provide both (though you can if you’d like).
Simply connect your wallet, deposit JUP or SOL, and start earning fees. To learn more about the liquidity pool, click on Analytics or Info & Risk. Kamino does a great job clearly explaining what the pool does and how it works.
Risks
Every Onchain Signal Explained in 13 Minutes
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🛠️Tool Spotlight
Protect Yourself from Scams with the DeFiLlama Directory
A single link click can drain your wallet - use DeFiLlama’s directory to go straight to protocol websites.
More helpful DeFi Tools: The Dynamo DeFi Crypto Tools List
📅Key Events This Week
Macro Events
📊 Home sales data - January 27th
📊 Federal funds rate - January 29th
📊 FOMC statement - January 29th
Token Unlocks: $300M Unlocking This Week
🔓Tokenomist: Track token unlocks and make better investment decisions. Use my code DDNM5 for 5% off Pro Plans.
🔓OP (2.32%) - January 31st
🔓DYDX (1.15%) - February 1st
🔓ZETA (6.98%) - February 1st
🔓SUI (2.13%) - February 1st
Launches & Updates
Note that these launches are mostly unvetted by the Dynamo DeFi team and this isn’t an endorsement of any of them.
🚀 Funtico gaming platform’s token launch - January 27th (Source)
🚀 Seedworld’s vanguards rebirth launch - January 28th (Source)
🚀 DolionAI by Dolos diary team launch - January 28th (Source)
🚀 EstateX launch - January 28th (Source)
🚀 QUAI mainnet rollout commences - January 29th (Source)
🚀 JITO tiprouter NCN launch - January 30th (Source)
🚀 Darlania legends open beta - January 30th (Source)
🚀 Ternoa 2.0 mainnet launch - January 31st (Source)
🚀 Dark frontier game release - January 31st (Source)
🚀 Ice Open Network mainnet launch - January 31st (Source)
⚡Favorite Resources
If you want to dive deeper, here are some of my favorite resources:
🛠️ The Dynamo DeFi Crypto Tools List: A comprehensive list of 100+ crypto tools to help with portfolio tracking, analytics, airdrops and more.
🚀 RocketX: The 1-stop-shop to get the best rates for on-chain & cross-chain swaps.
🛡️ Ledger: The smartest way to secure your crypto. Buy & sell crypto with full control over your assets.
For more frequent content, follow me on Twitter and YouTube.
Until next time,
Dynamo DeFi
Thank you for always getting us out of the loop