Pendle Dominating The Market - Flagship Vault Update Week 14

Over the past seven days, the share price of the Portfolio Vault went from $82.74 to $80.48, a 2.73% decrease. In terms of BTC and ETH, the Flagship portfolio vault outperformed both BTC and ETH by 2.00% and 4.73%

Pendle Finance was the best-performing asset in the Flagship vault, increasing by 18%, with its TVL reaching over $4 billion. The other best-performing asset in the flagship vault was Bittensor. Due to increased demand, the cost to register a subnet on Bittensor skyrocketed to $6.7 million, reflecting the Bittensor hype in the crypto space.

Portfolio Vault Assets update

Bitcoin

Bitcoin is down 5.9% this week. Inflows into the nine recently launched exchange-traded funds (ETFs) tied to bitcoin have resumed their upward trajectory this week but are not at the levels we previously saw.

When it comes to technical indicators, Bitcoin has one of the best-looking charts. The daily structure remains in tact and seems ready to make another leg up. It will be interesting to see how ETF flows correlate to a potential next leg up the following week.

The Open Network

Over the past week, TON has seen a 2.05% increase. Recently, TON unveiled a $124M Incentive program. This program will take place over four-month-long seasons starting April 1. The first season will offer roughly $15 million worth of tokens to developers that meet key performance indicators.

TON's daily chart is another great-looking chart. After taking a leg up, TON is now in its consolidation phase and cooling off.

Pendle Finance

Pendle has increased by 18.82% over the last seven days, continuing its long-term and short-term trends. The Total Value Locked (TVL) has reached an all-time high this week, but Pendle keeps achieving weekly milestones.

Pendle's technical indicators are also very bullish. Like TON, it had a leg up in the last seven days and will probably consolidate in the coming days and weeks.

Solana

Solana has decreased by 0.76% in the last seven days. With Solana overtaking Ethereum on DEX volumes, most on-chain participants have flipped over to Solana because of the cheap fees.

The chart for Solana looks good on a high time frame, but a particular weakness is ongoing. This is likely a short-term weakness, but it is underperforming Bitcoin.

Fetch

Fetch has been down 17.09% in the last seven days. It is currently undergoing a merger with SingularityNet and Ocean Protocol. They are discussing merging their tokens into an AltSignals (ASI) token with a fully diluted valuation of $7.5 billion.

Fetch is currently a bearish chart. We are seeing some high-time frame bearish divergences, which could take days and weeks to play out. In a bullish scenario, Bitcoin moves up, and the divergences are invalidated. If this is the case, fetch would move to 4-5 dollars.

Bittensor

Bittensor is up 8.18% in the last seven days. The launch of subnets in October was a tremendous success, with subnet slots filling up with exciting projects. Subnets have allowed the creation of many mechanisms on Bittensor, but the design still needs to be completed. There are rumours and speculations that the subnets could grow to 1028 different subnets this year.

While Bittensor has been underperforming these last few weeks, from a technical perspective, it has reached an exciting point on the chart. With all the different updates coming in the coming months, this underperformance is temporary.

Celestia

Celestia has been down 15.59% in the last seven days. It is a modular consensus and data network that enables anyone to easily deploy their blockchain with minimal overhead. Celestia is highly hyped for airdrop farmers, as every Celestia partner is airdropping tokens to Celestia stakers.

After being the top-performing large-cap from Nov 2023 to Jan 2024, Celestia has been cooling off for the last three months. It is now forming an accumulation range. Once we are able to break out from this range, Celestia will return to being a top performer.

Pyth

Pyth Network is down 7.10% in the last seven days. With new applications being launched daily, more and more are picking Pyth over Chainlink as an Oracle provider. This has caused the gap in market cap to diminish. There is speculation that Pyth Stakers will also receive numerous airdrops.

Pyth had a significant run-up the last two weeks and is now consolidating. It is reaching a fascinating point for its next leg up. If Bitcoin continues to trade higher or consolidate, Pyth will take its next leg up.

Stacks

Stacks is down 6.82% in the last seven days. Stacks is a Bitcoin layer for smart contracts. The Nakamoto scaling upgrade will begin rolling out between April 15 and 29.

With the Nakamoto upgrade starting in the coming weeks and Bitcoin halving, we can expect Stacks to enter the spotlight. Its price action is still bullish but could see some consolidation in the coming weeks.

Indicator list

Forex Markets

The Forex market is a proxy for risk on or off the environment. EUR/USD looked weak last week but is looking more bullish for the dollar now. The Forex market is in limbo, hovering between risk on and off. The dollar is looking quite strong. It trades above 100 and above the 200-day MA, a high-risk-off scenario. Macro indicators have less influence on the crypto ecosystem at this time.

DeFi Stablecoin TVL.

When the Total Value Locked (TVL) exceeds the market capitalization, it indicates a risk-on environment. Conversely, if the TVL falls below the market cap, it suggests a risk-off scenario where investors are more cautious. Recently, TVL has been trending upward thus indicating a risk on environement.

Relative Strength Index

The relative strength index (RSI) is a momentum indicator, RSI measures the speed and magnitude of a assets recent price changes. When the RSI is above 50 on either daily or weekly charts, it signals a risk-on environment. Conversely, an RSI below 50 on these timeframes suggests a risk-off atmosphere. With both weekly and daily charts appearing strong and having reset, there's an anticipation for a new upward movement.

Trends

We utilise the 12, 21, and 36 Exponential Moving Averages (EMA) to determine the daily and weekly trends. A move below these EMAs on the daily chart will indicate a shift towards a risk-off environment, signaling caution among investors. The market is showing signs of stagnation but hasn't lost the daily trend, suggesting a steady state without clear indications of a downturn. When the market reclaims its position above these EMAs on the daily timeframe, it will be considered a sign of transitioning into a risk-on environment. Currently, we are above all trends.

Bitcoin Dominance

Bitcoin Dominance (BTC.D) isn't directly indicative of a risk-on or risk-off environment but plays a crucial role in deciding our allocation strategy between Bitcoin and the rest of our portfolio. An upward trend in BTC.D suggests an increased allocation towards Bitcoin, while a downward trend signals a shift in preference towards investing more in blockchains and decentralized applications (dApps). Currently, we're on the lookout for an upward move. This could lead to a scenario where Bitcoin experiences a parabolic rise, potentially causing altcoins to bleed. Alternatively, a correction in Bitcoin could result in an even more significant downturn for altcoins.

ETF Inflows

Reviewing ETF inflows helps us understand the money movements of institutional investors. Grayscale Bitcoin Trust (GBTC) appeared strong at the beginning of the week but has shown signs of weakness in the last few days, indicating increased interest or confidence. However, it's important to note that GBTC often acts as a lagging indicator compared to other parties, which means its movements might not immediately reflect broader market trends. This pattern suggests a cautious approach to interpreting its recent performance as a definitive sign of risk-on sentiment.

Total Market Caps

In analyzing market cap indicators to gauge the overall sentiment in the crypto market, we consider three different aspects. The first indicator, which is the total market cap of the cryptocurrency sector, hasn't reached an all-time high but is showing positive signs, indicating a risk-on environment that suggests confidence among investors.

The second market cap indicator, which excludes Bitcoin, appears weaker than the first, facing resistance. This situation presents a neutral to risk-off sentiment for altcoins, while still being bullish for Bitcoin, suggesting that Bitcoin might be a safer bet compared to other cryptocurrencies in the current market condition.

The third indicator goes a step further by excluding both Bitcoin and Ethereum from the total market cap, revealing an even more bearish outlook. This hints at a potential increase in bearish sentiment across altcoins, with the exception of Bitcoin, which remains in a relatively bullish stance.

Liquidity

Global liquidity trends serve as a barometer for market sentiment, with an upward trend being synonymous with a risk-on environment. This suggests investors are more willing to take on risk, buoyed by the availability of capital. Conversely, a downward trend in global liquidity marks a shift towards a risk-off environment, indicating a more cautious approach by investors as capital becomes scarcer.

Similarly, the trend in US liquidity follows the same pattern. An increase in US liquidity points to a risk-on sentiment within the United States, reflecting confidence and a willingness among investors to pursue riskier assets. On the other hand, a decline in US liquidity signals a risk-off mood, where there's a tendency to shy away from risk, prioritizing stability and safer investments instead.

Currently, both global liquidity and US liquidity have started to show upward trends, suggesting a more risk-on environment in markets . This indicates that investors, both globally and in the US could have a larger risk appetite.

Risk profile

We have decided to remain ultra-bullish on Bitcoin as our indicators flash an ultra-bullish crypto environment. While it's not alt-season, we are observing certain altcoins outperforming the market. Consequently, we have decided to add Ondo Finance to the vault.

Ondo Finance

Ondo Finance is a DeFi protocol that aims to provide institutional-grade financial products on the blockchain, including tokens backed by U.S. Treasuries. It has been backed by prominent figures in the financial industry, including Larry Fink, the CEO of BlackRock, one of the world's largest asset management firms. This backing lends credibility to the project and may contribute to its potential growth and success. Adding Ondo Finance to the vault allows us to get more exposure to the Real-World Asset sector.

As such, the new vault allocations are:

Until next week,

Flagship’s Captain team