Thread by @swombat

Daily market health update

Current status: late bull euphoria

IMHO.

I could be wrong about this, of course... but having lived through the late bull euphoria in September, I get a sense of déjà-vu... been here before.

Btw, if you want more info on how these are calculated, check this thread:

https://twitter.com/swombat/status/1478794518745001984

- and follow me for daily updates and commentary on these stats.

Now I don't want to sound like some kind of perma-bear. And I'm not. I was (on @Llamaverse_) cheering the incoming bull market as the graphs started to trend up back in mid December. I'm not trying to throw cold water on everyone.

But...

Now, the first criticism ppl will throw back is, "but there's all these projects pumping everywhere!"

And yes that's true. And it was true in September as well, which is why I made lots of dumb investment decisions back then that you can see in swombat.io/transparency.h…

It's important to look at what is pumping and why, though, rather than just take the general mood of the market and assume that it's representative of the health of the market.

https://twitter.com/Zeneca_33/status/1480029206998306818

I am going out on a limb here. I could be entirely wrong in my assumptions. Also, maybe something huge will happen (e.g. Coinbase NFT launching tomorrow) that will bring lots more attention to the market and spin up a new bull phase.

The charts do not:
- predict the future
- explain why what is happening is happening

All they do is look at what is actually happening, unemotionally. Then I add some commentary which I hope is helpful to make better use of the data.

What *is* happening is that the top nine (Pudgies is still on timeout) have been in a long slow decline for day. Here's the 6-hour stacked bar chart:

They're still seeing more activity than in deep bear... so we're not in bear mode yet. But we're not seeing the spikiness that would be there during a bull. As a reminder, look to the early part of this chart to see what a bull market looks like on the bluechips:

Adding my own analysis and sense... I am in a number of alpha groups and whilst there are different opinions, what I'm hearing from more experienced traders is that we are near a market top.

I tend to agree.

.@sabby_eth (thanks!) pointed me to this and called it a top signal. Why is it a top signal? Well, let's look at the projects in question and see whether we can understand why they're pumping by so much.

First: Doodle Frens is a derivative of two other projects, one a 2nd-tier bluechip, the other one a recent release that's also part of this pump - I'll look at Alien Frens in a later tweet in this thread.

Doodle Frens doesn't even have a website.

Similar for Croodles. Pure derivative (Creatures and Doodles). The roadmap is just to do some giveaways as mint proceeds. What's next? Nothing. The founders have literally already said they're working on the next project. Croodles is DOA. But it's pumping.

Croodles and Doodle Frens respectively have 300+ and 150+ eth of volume in a very short span of time. And let's look at one of the projects they're based on, Alien Frens.

I looked at Alien Frens during mint and decided to give it a miss. alienfrens.io Why? because there is no value there. It is pure ponzi. All the roadmap items are things on my thread about roadmaps, highlighted as amber or red flags.

https://twitter.com/swombat/status/1463577582826397701

And yet Alien Frens has inexplicably shot up to an enormous floor of 3.4 in a matter of days! It's worthless, purely hype driven, and yet it's "worth" 3.4 eth.

In the alpha groups I'm in, there is a lot of disbelief and excitement and euphoria. "OMG, everything is flying" "Fluffy polar bears at 0.28 eth!" "Phat Pandaz taking off!"

Phasers are set to FOMO.

Every1 making bank! What abt u? wdym u didn't mint crazy cockroaches? Buy now!

So.

Let's take a deep breath.

I don't know what will happen.

I don't know how long this market euphoria will last.

I don't know what's driving it.

I don't know whether something will happen to bring more money into the market.

There's a lot of things I don't know.

I do know this:
- The top nine volume is still trending down, for days now. Established bluechip projects stopped pumping days ago.

- The crypto market functions as a BTC->Eth->Alts->Shitcoins cycle where they each pump in turn as people chase profits. I see no reason why the NFT market would operate differently, as people's motivations are the same.

- There is a strong feeling of euphoria and fomo across the market - but at the same time more experienced traders I speak to are calling a market top.

- Projects with no long term investment value are pumping out of nowhere as hype sloshes about the market, feeding the fomo.

And finally:

- I would rather miss out on a crazy lottery opportunity than be left holding bags for months like the last time this happened in September.

So: I'm investing as if the music is a few notes from the end.

Keynes famously said "The stock market can remain irrational a lot longer than you can remain solvent."

Luckily (or not?) there's no way to short the NFT market, so the only risk I'm taking by staying out and taking profits is to miss out on bigger profits.

For me, that feels like the right decision. So I'm selling into pumps where I see them at the moment.

Remember I'm just some dude on the internet and make your own decisions, but I hope this information is useful to you.

Peace to all ❤️

gm & gl

PS: Follow me for daily market health stats and analysis. RT just for the sake of it, to help me reach more people. Like if you like.