Institutions buying the Dip - Flagship Vault Update Week 28

Over the past seven days, the Portfolio Vault's share price has increased from $56.55 to $57.54, a 1.73% increase. Regarding BTC and ETH, the Flagship portfolio vault outperformed BTC by 0.03% and ETH by 2.03%.

Portfolio Vault Assets update

Bitcoin

Bitcoin is up 1.7% this week. Inflows into the nine exchange-traded funds (ETFs) tied to Bitcoin have ticked. This week, we have seen average inflows of $175 million. In other news, the German government has consitenly been selling its BTC. Addresses linked to German and US governments have recently sent over $1 billion in bitcoin to exchanges, including Coinbase, Bitstamp and Kraken, and some to OTC desk operator-slash-market maker Flow Traders.

Regarding technical indicators, Bitcoin has lost the low range and is currently ranging below the 200-day moving average. The 200-day moving average is one of the well-tested supports, even in TradFi. A loss of the 200-day moving average will lead to increased weakness and probably lead to a sell-off to the 48-52k region.

The Open Network

Over the past week, TON has seen a 0.2% decrease. TON has recently flipped Ethereum in Daily Active Addresses. TON surpassed Ethereum in DAA; in June, TON surpassed ETH on 10 of 11 days. On June 3, TON set a record with 568,300 DAAs, which Ethereum hasn’t reached since September 13, 2023.

TON has been one of the strongest alts in the space and one of the strongest alt blockchains. It is one of the few assets in this space that maintains its daily trend. TON has again broken its all-time high, and millions of users flow into the TON ecosystem. The summer of TON might be starting before our very eyes.

Pendle Finance

Pendle has decreased by 4.68% over the last seven days, continuing its long-term and short-term trends. Pendle has recently lost $3 billion of its TVL with the June expiry as a result of diminishing airdrop farming hype and lower yields

Pendle has remained in its range but is exhibiting weakness. It failed to make a new high and has not made a new low in market structure for now. If Pendle can make a higher low, it would show that we are in for a volatility crunch, with one side needed to break.

Solana

Solana has increased by 8.91% 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 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 0.8% 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 has rejected its daily trend and is testing its previous lows. We want to see a range from here. Losing these lows would insinuate a further downward trend.

Bittensor

Bittensor has been up 11.7% in the last seven days. The Bittensor blockchain is still halted after an attack on several user wallets.

While Bittensor has been underperforming these last few weeks, 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 down 4.69% 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.

Ondo's technical indicators are also bullish. It's one of the few adults that has held its daily trend. With the ETH ETF, the tokenization narrative can catch a bid with Ondo being the lead RWA narrative and backed by Larry Fink. Ondo can be a top performer.

Stacks

Stacks is down 14.1% in the last seven days. The Stacks foundation have announced the approval of eleven Critical Bounties that drive Bitcoin L2 development forward. Approved bounties range from Runes & Ordinals scaling to Signer automation. Read all about it here.

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 looks strong, and the Forex market looks like a neutral/risky environment. The dollar is looking neutral. It has lost its range high break out and its daily trend.

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 has now lost the 50 on the daily level, indicating ,more ranging

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 have lost the daily trend, indicating more range and chop.

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 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 positive, with the average inflows for the last week being around $150-$175 million daily.

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 neutral signs.

The second market cap indicator, which excludes Bitcoin, appears weaker than the first and faces resistance. This situation presents a neutral to risk-off sentiment for altcoins while still bullish 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 an even more bearish outlook. This hints at a potential increase in bearish sentiment 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 despite seeing a loss of trends and a more bearish environment. We are still in a bull market and are already completely deployed at better prices. Consequently, we have decided not to rebalance the vault. As such, the vault allocations are:

Until next week,

Flagship’s Captain team