Election Steam Picking up- Flagship Vault Update Week 34

Over the past seven days, the Portfolio Vault's share price has increased from $48.57 to $51.93, a 6.92% increase. Regarding BTC and ETH, the Flagship portfolio vault outperformed BTC and ETH by 2.29% and 6.85%.

Portfolio Vault Assets update

Bitcoin

Bitcoin is up 4.63% this week. The U.S. economy is showing signs of improvement, as the leading economic indicators from the Conference Board suggest a slowdown but no longer signal an impending recession. The Leading Economic Indicators (LEI) fell 0.6% in July, continuing a trend since its peak in 2022. Despite the decline, the six-month annualized change in LEI has improved from -3.1% in June to -2.1% in July, indicating reduced recession risk.

This development is positive for risk assets, including cryptocurrencies. After a sharp decline in early August, triggered by fears of a U.S. recession and a slowdown in job creation, the markets have shown signs of recovery. Bitcoin, for example, dropped to $50,000 but has since rebounded above $60,000.

Overall, while the economy faces headwinds, the improving LEI suggests a lessening risk of recession, which could boost confidence in both traditional and crypto markets.

The Open Network

Over the past week, TON has seen a 2.84% decrease. Binance recently launched the Super Earn event for Toncoin (TON), which quickly gained popularity, with the initial offer being exhausted in minutes. In response, Binance introduced a new staking pool on August 16, 2024, allowing users to stake up to 50 TON each.

This event is part of Binance’s broader strategy to promote Toncoin, offering users a chance to maximize returns and participate in the growth of the Toncoin ecosystem. The Super Earn event highlights the increasing interest in Toncoin and Binance’s commitment to supporting emerging digital assets.

TON has been one of the strongest alts in the space and one of the strongest alt blockchains for the last month. Currently, it is exhibiting some strength relative to the market. If TON can reclaim the daily trend, it can become a leader.

Pendle Finance

Pendle has increased by 5.68% over the last seven days, continuing its short-term downtrend. The upcoming agETH airdrop, organized by KelpDAO and August Digital, is now live on Pendle, offering a unique opportunity for users to gain exposure across multiple Layer 2 networks and restaking platforms. This event features six different types of airdrops, all accessible with just one click, making it a seamless experience for users. This initiative is expected to significantly increase the Total Value Locked (TVL) on Pendle, as the platform continues to attract more users with its innovative features, such as the one-click Liquidity Transfer, which makes it easy for users to transition between pools. Additionally, with vePENDLE voting and PENDLE incentives going live on August 22, Pendle is set to become an even more attractive option for crypto investors looking to maximize their returns in a streamlined and efficient manner.

Pendle is now testing high time frame support. If Pendle can reclaim its daily trend, it would show that we are in for a volatility crunch, with one side needing to break.

Solana

Solana has increased by 0.43% in the last seven days. With Solana overtaking Ethereum on DEX volumes and montly revenue, most on-chain participants have flipped over to Solana because of the cheap fees and memecoin trading.

The chart for Solana looks good in terms of a high time frame, as it has retraced a large part of its previous move. It has now attempting to reclaim its daily trend.

Fetch

Fetch is up 16.7% in the last seven days. The Fetch merger is now complete, and the ASI token merger integrates FET, AGIX, and OCEAN into a unified platform to advance decentralized AI technologies.

Fetch is testing its high time fram support. We want to see a range from here. Losing this support would insinuate a further downward trend.

Bittensor

Bittensor is up 10.80% in the last seven days. Grayscale Investments has launched the Grayscale Bittensor Trust, which is focused on TAO, the token of the Bittensor protocol. The trust allows accredited investors to gain exposure to TAO through a familiar investment vehicle​. The launch of the Bittensor Trust aims to meet the increasing demand for diversified crypto investment products and is part of Grayscale's broader strategy to expand its portfolio with innovative assets. The trust functions similarly to Grayscale's other single-asset investment products and is available for daily subscription by eligible investors​.

Bittensor has emerged as one of the strongest AI projects in the last week, recently attempting to reclaim the daily trend. From a fundamental perspective, it is one of the strongest projects out there. It captures every sub-AI sector, as these can be built on the Bittensor Network.

Ondo

Ondo Finance is up 9.8% in the last seven days. Ondo 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 supported by prominent figures in the financial industry, including Larry Fink, the CEO of BlackRock, one of the world's largest asset management firms.

BlackRock has made significant investments in Ondo Finance by purchasing over $10 million worth of ONDO tokens. This includes a $5 million buy on August 5, 2024, following a previous $3.11 million purchase. This aggressive investment strategy by BlackRock highlights its confidence in Ondo Finance's potential and the broader RWA sector's future growth.

Stacks

Stacks is up 12.33% in the last seven days. The Stacks network has reached an important milestone with the Nakamoto Upgrade, now "code complete". This upgrade aims to enhance transaction speeds, ensure full Bitcoin finality, and prepare for the upcoming release of sBTC. The codebase includes new features to improve Signer and Miner resiliency and has passed initial testing phases. The final testing and audits are scheduled to continue, with the mainnet release anticipated at the end of August​

Stacks is the biggest BTC beta, consolidating at weekly support. If BTC can move up and break out of its current range, we can see Stacks following.

Indicator list

Forex Markets

The Forex market is a proxy for risk on or off the environment. EUR/USD is testing range highs, and the Forex market looks like a risk on environment. The dollar is testing range low, it will interesting to see this range further plays out.

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, but is stagnating. Thus indicating a neutral environment.

Relative Strength Index

The relative strength index (RSI) is a momentum indicator that measures the speed and magnitude of an asset's 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. BTC is testing the 50 from below. This indicates we are in a choppy environment.

Trends

We utilise the 12, 21, and 36 Exponential Moving Averages (EMA), precise tools for market analysis, 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, signalling caution among investors. The market shows signs of stagnation but has yet to lose 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. We are trying to reclaim the daily trend

Bitcoin Dominance

Bitcoin Dominance (BTC.D) doesn't directly indicate a risk-on or risk-off environment. Still, deciding our allocation strategy between Bitcoin and the rest of our portfolio is crucial. 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 be a significant move up for BTC that will lead to ALTS underperforming.

ETF Inflows

Reviewing BTC ETF inflows helps us understand the money movements of institutional investors. The dynamics of spot Bitcoin ETFs have recently displayed notable volatility in their inflow patterns. This week, inflows have been both positive and negative, with the average outflows for the last week being around $11 to $99 million daily.

The Ethereum (ETH) ETF has officially started trading, mirroring the price action from the initial Bitcoin ETF launch days. In conjunction, Grayscale has been selling its ETH holdings significantly, with over $2.5 billion worth sold to date . We are now seeing some slow down in selling, potentially leading to a bottom.

Total Market Caps

When analyzing market cap indicators to gauge the overall sentiment in the crypto market, we consider three different aspects. The first indicator, the total market cap of the cryptocurrency sector, hasn't reached an all-time high but is showing bottoming signs.

The second market cap indicator, which excludes Bitcoin, appears weaker than the first and faces resistance. This situation presents a neutral sentiment for altcoins while still neutral for Bitcoin, suggesting that Bitcoin might be a safer bet than other cryptocurrencies in the current market condition.

The third indicator excludes Bitcoin and Ethereum from the total market cap, revealing a neutral outlook. This hints at chop across altcoins, except Bitcoin, which remains neutral.

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.

Equally significant is the trend in US liquidity, which mirrors the global pattern. A rise in US liquidity reflects a risk-on sentiment within the country, indicating investor confidence and a willingness to explore riskier assets. Conversely, a decrease in US liquidity signals a risk-off mood, where there's a tendency to avoid risk, favoring stability and safer investments. Understanding these trends is vital for investors, as it can guide their investment strategies and decisions.

Both global and US liquidity have started to show upward trends, suggesting a more risk-on environment in markets. This indicates that globally and US investors could have a larger risk appetite. But it is summer and can be seen as more of a ranging environment for risk-on assets.

Brent Crude Oil

Brent crude oil prices impact risk assets significantly. When oil prices rise, the cost of goods and transportation increases, leading to higher inflation. This often results in central banks raising interest rates to combat inflation, making borrowing more expensive and reducing investment in risk assets like stocks. Conversely, when oil prices fall, inflation pressures ease, potentially leading to lower interest rates, cheaper borrowing costs, and increased investment in risk assets. We are now seeing a strong rebound from oil.

Risk profile

We have decided to remain ultra-bullish on Bitcoin. We are still in a bull market and are already completely deployed at better prices. Consequently, we decided to not rebalnce the vault.

Until next week,

Flagship’s Captain team