This week.

1. Bitcoin and Ether price action v USD. (With some macro sauce.) 🍲

2. What is Web3? (Enters Coinbureau) ▶️

3. FIFA World Cup Qatar 2020. Tokens to watch out for. (Who are you with?) ⚽

4. The Polygon (MATIC) standard. ( The devs are doing something.) 🙌🏽

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1. Bitcoin and Ether price action.

This week, we don’t want to focus so much on the technical side of things. We don’t think they are as important as the fundamentals driving price action in the financial markets, including in crypto. So, we’ll do a quick run-through and get to the meat of the issue.

BTC/USD

Areas of interest.

• Support (below current price) $17,800-$18,200.

• Resistance (above current price) $22,400-$22,800. (See red lines in the chart above.)

If I were you, I’ll set my buy/sell orders at these prices and wait!

ETH/USD

Areas of interest.

• Support: $1,000-$1,200.

• Resistance: $1,800-$2,000.

Again, set your entries at these prices and go wait!

Macro stuff.

The financial markets tumbled earlier this week wiping out most of last week’s gains as the Fed chairman, Jerome Powell appeared to take a more hawkish stance in the fight against inflation.

Market speculators had priced in a signal from the Fed’s statement on the 2nd of November that hinted a Fed pivot from rate hike aggression from 75bps (0.75%) to 50% bps (0.50%) may be coming in December. This caused a short-term rally.

The Feds chairman then announced in a subsequent speech on Wednesday that the ultimate level of rates could be higher than previously expected, which caused an instant dump as the opposite had been priced in beforehand to front-run plebs. (Do not google what is a pleb?) 😂

In October, the Dow Jones (DOW) had its best month since 1976 settling at $32,732. The S&P 500 rallied from $3600 to a high of $3,900 and the crypto market saw Bitcoin hit $21,00 for the first time in six weeks and Ether rally to $1662 in October as rumours swelled of a Fed pivot.

During the FOMC press conference, the Fed’s chairman said they will keep raising rates until inflation hit its 2% target.

The Fed chairman shut down any remaining hopes of a pivot by saying, “The incoming data since our last meeting suggest the terminal rate of Fed Funds will be higher than previously expected (4.63%), and we will stay the course until the job is done.”

Market speculators had expected the Fed to pause or pivot once the terminal rate of (4.63%) is hit next year. In continuation, chairman Jerome Powell said, “Risk management is key here: If we were to over-tighten, we could use our tools to support the economy later on; but if we failed to tighten enough, inflation would become entrenched and that would be a much bigger problem”. 

The Fed hasn’t seen a satisfactory slowdown in US inflation. There is still substantial wage growth in the labour market, employment continues to rise by an average of 289,000 jobs per month according to Non-Farm Payroll data and unemployment has not hit an undesirable number to form concerns of deflation. And real GDP is still growing at a pace of 2.6% as of last quarter. 

Inflation is at a 40-year high of 8%, still a long way from the target of 2%.

Different reasons have been attributed to high inflation such as excess money supply in reaction to the COVID-19 pandemic as well as geopolitical conflict in Eastern Europe causing a hike in prices of oil, gas and commodities like wheat.

Jerome Powell claimed during the press conference that the Fed have the tools to support the economy later on if they over-tighten. I.e. quantitative easing, i.e. money printing. I.e. the money printing machine goes brrrrrrr.

But until then, we are in the Fed purgatory, and as a Finance professor, Martin Zweig once said, “do not fight the Fed.”

How does this affect your favorite crypto ponzi coin?

The Fed will not rest until they mop up whatever liquidity they can from the market to douse inflation. For risk-on assets like crypto tokens, that likely means the bottom is not in. But it's not all bad news. A pivot to 50bps in December as expected should provide short-term relief for crypto tokens. Even if it means the Fed will raise interest rates for longer.

We’ll keep you updated on how to play it. 🤝

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2. What is Web3?

Here’s a YouTube video from one of our favorite crypto youtubers. tsk tsk.

Watch this video and answer the questions below.

The time is 1:37am and I am too lazy to move this part to the bottom. So read the rest of the article and come back to this. If you don’t, I will know. My baba is strong.😒Emi ika.

Questions:

1. What is the most important change you believe Web3 will usher in?

2. What is the main difference between Wed 2.0 and Web 3.0?

3. What kind of application would you build on Web 3 if you could build anything?

Answer in the comments. I’ll say “the best answer wins.” But we all know that’s a twitter styled clickbait. 😂

Leave a comment

3. FIFA World Cup 22, Tokens to watch out for.

Disclaimer: This is not financial advice. Nothing you read in this newsletter is financial advice.

That said. A twitter friend’s tweet last week got me thinking.

Igwe @Ssaasquatch

If you’re an active investor, always follow liquidity. The narrative for this month is football cos of the World Cup and my bet is that liquidity will flow into football tokens. Won’t be explaining further or recommending what to buy. Goodluck

9:05 AM ∙ Nov 1, 2022

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174Likes55Retweets

We would be explaining further and recommending what to buy. 😑We nor dey fear anybody. 😑

Some of the most profitable trades in the crypto are also the most predictable. Like when Elon Musk’s tweets about Dogecoin.

The World Cup is one of the biggest events of the year whenever it comes around. 100s of millions of fans around the world will be rooting for their favorite teams. (Not named Super Eagles.)

With that much visibility, it’s a good assumption that whichever companies tie their brands to the popularity of such an event is bound to generate some buzz off it and in the case of a crypto company, buzz usually means an uptick in token price.

That being said, here are 3 tokens we are watching and why.

1. Chiliz (CHZ):

CHZ runs on the Ethereum-based Chiliz blockchain. It was the most popular sports token once.

It serves as the currency that allows users to purchase and trade sports-related NFTs on the Socios marketplace.

Sports fans and e-sports enthusiasts can use the utility token to participate in the management of their favourite sports teams.

Any World Cup-related fantasy league with prizes to be won should draw more fans to Socios. Socios is the official token partner of 62 football teams including Argentina -which should get to the later stages of the competition- UEFA and Ballon d’Or.

2. Algorand (ALGO):

Algorand is the official blockchain partner of FIFA after agreeing on a sponsorship and technical partnership deal.

As per the sponsorship agreement, Algorand will be a FIFA World Cup Qatar 2022™ Regional Supporter in North America and Europe, and a FIFA Women’s World Cup Australia and New Zealand 2023™ Official Sponsor.

No doubt this visibility cannot harm ALGO’s popularity amongst the crypto initiated who are also football fans.

3. Crypto.com (CRO):

CRO is also an official sponsor of the 2022 Qatar FIFA World Cup.

Crypto.com will build a marketing campaign around the event which starts this month by providing opportunities for new and existing users to attend matches football matches, be a part of exclusive events and or win exclusive merchandise during the event.

We expect this to mean well for the token which has lost 88% of its token value since its All-Time High price.

Honorable mention:

• Altered State Machine (ASTO.)

Let us know in the comments if you think we left anyone out.

Also tell us what teams, you’re rooting for by leaving comments. 🤝🏽

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4. Making a case for Polygon (MATIC).

Polygon’s (MATIC) business development team have set itself apart from many of the other crypto projects in the market by inking big deals with the likes of Starbucks, Meta, Reddit, Disney, Adobe and DraftKing in a bid to push mainstream adoption of crypto/web3 even in a bear market.

On Wednesday night, Instagram announced that it will enable NFTs minting and trading for US users and content creators on the Polygon Network. As covered in last week’s issue, Reddit avatar collectables have become some of the top-selling NFTs in the market. The Reddit collection was also launched on the Polygon Network L2.

Why are Web2 social media giants choosing Polygon?

Polygon was launched in the last bear market as an Ethereum Network scaling solution and was one of the biggest winners in the bull market. Over the past four years, the Polygon team has consistently shown a path towards building technologically superior solutions for web3 on the most popular and largest blockchain application layer (Ethereum.)

As Web2 giants look to enter into the Web3 space they are looking for battle-tested solutions that solve the blockchain trilemma (security, scalability & decentralization) and make users' experience as seamless as Web2.

Cheap gas fees and speedy transactions are the bedrock of Polygon’s rise as the dominant layer 2 solutions. 

Polygon acquired standalone protocols like Mir Protocol and Hermez and has embarked on a mission to build Zero Knowledge Ethereum Virtual Machine (zkEVM) that further scales its network by reducing gas fee and finality time.

When the good times roll by again, we believe that MATIC will get repriced according to its true value proposition and network effect. It is a good one to keep an eye on as we expect the $1 resistance level to get broken sooner than later.

Thank you for reading.

For comments and feedback, please write to us at ecoinomicsweekly@gmail.com.

Groovy and Oloye for CryptoRoundUpAfrica ®️

Just before we finish, we’d like to give a special shout out to Olivia. One of our subscribers who sent us a lengthy email feedback on how to make this newsletter better for everyone. We appreciate it and looking forward to your continuous feedback. 🙏🏽

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