Did the Market Overreact Last Week?

SEP 16, 2021 • 4 Min Read

Disclosure: Delphi Ventures and members of our team have invested in tokens mentioned in this report. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice.

Key Takeaways

  • Despite poor market conditions last week, ETH/BTC is still above its latest trend line break. Price was consolidating within a channel before breaking out. And after breaking through, price came back to re-test the upper trend line — typically a sign of continued strength.

  • After last week’s sudden nuke, sentiment in crypto markets plunged hard from a state of greed right into fear in a single day. Given the last 10 days of movements, it’s safe to say this was definitely an overreaction. But this highlights how fragile sentiment currently is in the market, making it a ripe environment to chop traders up and catch leveraged positions offside.

  • Stablecoins on Ethereum hit a total capitalization of $80B this month, indicating capital inflows to crypto — and specifically Ethereum — aren’t slowing down.

  • Hop Protocol is a cross-chain liquidity product that enables seamless interaction between L1s and their rollups. The protocol has grown its liquidity by a fair amount in the last month without any token incentives. Assets supported are currently restricted to USDC, USDT, and MATIC. Hop currently offers users the ability to move assets between Ethereum, xDAI, Optimism, and Polygon.

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