Reports of my death are greatly exaggerated (Part 2)

(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

Gm everyone. I am so back. Sort of. In my ~20 months of writing, it was nice to take my much needed first week off. A lot has happened to markets over the last 2 weeks. I mean, a lot. ETH is solid above $2,000, Doodles/Moonbirds/Clones are solid below 3 ETH, and Franklin has sold his Apes. It hasn’t looked worse for digital pictures on the blockchain since November 2022. Today, I’ll go over why I think we’re in the process of bottoming. While it’s a fools errand to predict long-term bottoms, I’m expecting some sort of aggressive bounce within the next month or so. As usual, I’m referring to the “volume and general sentiment” bottom - as I think projects like Penguins bottomed at 3.5 and others like Azuki’s bottomed a while ago.

Anyways, if interested, here’s my post from Nov 29th, 2022 - 2 weeks off the last bottom when we were buying Lil Pudgys at .12 ETH:

Let’s dive in on what’s been a jolly o’l good time in the NFT markets lately. Everything is so bad that even Franklin has sold his Apes. Now, buying the blood isn’t an easy task nor is it for the faint of heart. Also, you don’t want to end up sweeping up a falling knife like Moonbirds at 10 ETH for the sole reason it’s down 75%. Just because something is cut in half, doesn’t mean it can’t be cut in half again, and again…

If we take a look at the current state of things, well… nothing looks good. Sentiment is low and as ETH continues to pump to the heavens, nobody wants to hold pictures anymore. Big behemoth projects backed by mega corporations with 9 figure valuations have also disappointed their most loyal holders. Overall, it seems that we’re in some sort of blend of apathy and anger.

Adding insult to injury, volume on Blur is the lowest we’ve seen since the airdrop. Have you jumped into a non-alpha group discord lately? If you haven’t, even some solid 1 ETH+ projects discords are an absolute ghost town. I mean, with shitcoins like $Pepe (no I don’t own any) and some other nonsense pumping 20x in a day, it’s tough to care about jpegs. Everywhere I go it seems like everyone is angry at something.

The above is a metadata change to all projects by Truth Labs (goblintown). This really rubs me the wrong way. Imagine complaining about illiquid shitcoins with pictures becoming liquid and all of a sudden your project now goes down? Not to mention gatekeeping royalties on a collection is “usually” a sign that things financially aren’t looking so good.

It isn’t easy to watch. People are hurting and are down bad and everyone wants to point a finger at one another. Of course, in this crazy picture casino it’s tough to imagine most have good risk management. Anyways, now I that I am harping on everything that is ‘very bad’ - we can move on to why I think we’re going to have some sort of mini-revival in the near future.

Almost every “blue chip” has been sent to 0, VCs blown out have moved on to AI grifts, NFT influencers haven’t been right about anything in 6 months +, whales are capitulating, complaints about more liquidity in an illiquid market, and die hard project supporters finally selling and FUDing their personal “digital identity” for the last 18 months.

There’s not many more signals I can see that don’t scream “bottom”. Back in November, collections were trading 12 ETH at $1200 and making it into the top 100 volume. NFTs were “dead” with little hope of ever coming back. While many collections have been falling knives since - we’ve seen the emergence of aggressive bull trends in projects such as Azuki, Miladys, Penguins, Captainz, Kanpai Pandas, and a few others. If you simply had bought the right pictures!

It’s also important to note which projects are holding up well right now. Azuki is basically the only project that has been going up over the last month out of the ‘time-tested’ blue chips. A lot of respect for this community – they essentially have an infinite bid at this point. Some other solid projects like Captainz have been ripping off of ponzinomics and Milady’s memeing their way to the moon. While Penguins are technically in an uptrend since the November “sentiment and volume” bottom, they’re off 50% from the ATH. These have been hurt more than I expected. I was a dip buyer in the low 4s, but I did not expect 3.5 - and I’m happy to publicly say I don’t think we go lower than this again. Overall, outside of these projects and Yuga eco stuff, there’s few worth focusing on right now.

Don’t forget how fun the jpeg casino is during stages of mania. We saw this post Blur Airdrop. This will come back at some point and I do believe it will be before Memorial Day weekend. The key will be to see if this lasts more than 2 weeks. Remember, if alt coin cycles are one month or 2, aggressive NFT cycles this bear market have been a few weeks max, followed by months of stagnation and a slow grind down.

Speaking of duds and disappointments, I may have to cancel my credit card and claim fraud after the recent reddit NFT turnout. Kidding, sort of. When Reddit NFTs (or Reddit Digital Collectibles) launched a few months back, we saw plenty of 10 ETH+ sales, topping the volume charts. This time around, most of the collections that minted for ~$10-$200 have barley seen even 2 ETH of volume. This was an absolute dud and while every alpha group was all over this, only a few folks and some bots were able to make out with big wins, unlike last time where almost every mint was a 10x+.

Tying back in to the broader bear market thesis – we’re not getting any new entrants here to buy our bags. New entrants will mint anything they can get WL for or that makes them feel special. Hardened veterans like you all are smarter than that - we watch etherscan, check volume, and monitor for anything that may come off as suspicious. With how successful reddit NFTs were last time combined with the fact that it took some time to transfer, there was no choice but to buy as fast as possible while also trying to snag the highly regarded artists. Of course, if everyone thinks they are early then nobody is early.

Overall I am confident we see a bounce. However, to be transparent with you all, there is a major flaw in my argument. If ETH continues to pump, there is nothing any of us can do and our pictures will continue to be dragged lower and lower. I don’t make the rules. Unfortunately, I can’t tell where ETH goes next, but if we don’t pump hard and either chop/trend down, I feel good that the time to buy some high quality projects and grails is now. Other seasoned traders clearly feel the same. If you follow NFT Whale alert and some other sales bots, there’s an influx of grail Azuki sales for 100 ETH+ as well as multiple rare Penguin sales as well.

As shitcoins pump and inevitably dump, we can only hope that the degens move further on the risk curve and pump the shitcoins with pictures. For all those reading, I hope you found this to be a helpful and sobering take on where we are right now. Thanks again for your patience with my week off and hopefully we get another mini cycle post Blur airdrop #2 to make it all back!

Cheers everyone,

Wilson