It appears that the bull market has finally returned so I wanted to review two things with you all. First, I’m going to make the “bull case” that this run up is likely to continue for a couple of quarters at least. Next, I’ll give you the watchlist of coins we have. I recommend none of them – only that you watch them.
Starting with the “bull case,” I want to note 3 items.
First, the US Fed interest rate cuts promise to add more liquidity to the market which has the known effect of propelling risk asset prices upwards. This recent activity has additionally given other nations “permission” to cut rates without fear of devaluing their currencies against the US dollar. That explains, in part, China’s recent move to begin their own form of fiscal easing.
Second, some worry that a recession is coming and I think that’s click-bait hog-wash. Of course a recession is coming. One always does. The question is: when? After an interest rate cut cycle begins, 6 months is about the earliest for a recession to materialize, which suggests that we have at least through March of 2025 for this market to make gains–an eternity in the crypto world.
BTC has crossed above its 200 day simple moving average and maintained that for a few days. Given that market participants expect another 200 bps in cuts over the next year (see image below), one has reason to believe that this uptrend would stay strong (other things being equal).
With that as a background, I’ll next move to our team’s current Top 40 watch list. I’ve organized them into 6 main “sectors” and organized coins by market cap within those. Clearly, the L1 and L2 “sector” make up the bulk of our interest.
One notable point about this list is that our team is much less bullish on crypto gaming than others–limited to SUPER–and certainly more focused on RWAs and Memes. My sense is that crypto gaming is still some years out. RWAs, however, are already making money. You might be surprised not to see ONDO on that list, but its tokenomics is just terrible.
We believe that memes are likely to continue to perform well, but we do not think that DOGE or SHIB are the best area of focus in this “sector,” as they are already quite large. Our highest conviction meme coins are still centered on the Boys’ Club narrative, which includes PEPE, BRETT, ANDY and WOLF. The Giga Chad meme has had recent traction and is the most likely to cycle off the list–for a PolitiFi coin as the election cycle nears. MOTHER is the only CelebFi meme coin that appears to have lasting strength. It’s also my favorite meme given the activity of the community and the clarity of its leadership–Iggy is killing it on Crypto Twitter.
Wolf (0x33) is by far the most speculative on the list, but also the only one that has the potential to make 1000x.
I personally, or my firms, owns de minimus amounts of all of these. And I DO NOT RECOMMEND THEM. They are gambles. All of them.
As a final thought, we don’t know for sure that the bull run is materialized. Technical analysts really want to see BTC break out above $67k and stay there for a bit to confirm that a new “up trend” is in place with a higher-high. Still, UpTober is just around the corner.
Happy Trading!
- Sebastian Purcell, PhD
