Turn Your Brain Off, Szn

(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! This finally doesn't feel gross to say anymore after the last few weeks we've had in the wonderful land of magic internet pictures and money. Things continue to look up and up since the beginning of 2023 – the music is getting louder. I'm still cautious, but that being said it does feel like opportunity is everywhere right now. For example, I'm writing this at 4am EST because I'm so excited to be here again I can't sleep. In my humble Penguin opinion, we're still in a bear market rally. I think this can continue for a few more weeks, months, potentially? NFTs have come a long way off the November bottom but what we're seeing now is the fungible tokens starting to heat up. While this isn't great for our jpegs, eventually, the rotation to riskier assets, like pictures, will take place once ETH is settled somewhere. Emotionally, the best strategy these last few weeks has been "turn your brain off" and don't overthink it. If you are still actively trading, I think this strategy will continue to work up until the blur airdrop at least. There's a ton of craziness going on right now, in a good way, so I'll do my best not to rant too much and keep this short and sweet. Let's dive in.

Market Overview

This may sound controversial as there's still a ton of Bear cope on the timeline but the NFT market is healthier than most think. To recap: 2 weeks ago, I was relatively bearish myself. Many collections have done a 3x off their November lows, blur bidding was coming to an end, and Yuga Labs had an upcoming mint that I believed would devastate the market. Luckily for me, I am severely bipolar when it comes to building a thesis on internet pictures. Things flip on a dime here and admitting you're wrong quickly, changing your plan, and not going down with the ship has been quite helpful in staying alive. Like I said above, I am still very *cautious*, but things are looking much better than I had anticipated.To highlight some reasons – the Sewer Pass mint and Dookie Dash really has not gotten as much attention as I'd think outside of Yuga NFT holders. While these folks are typically the loudest on twitter and command large followings, it seems to be isolated to those who are "all in" on Yuga. While this is not me, this is fine with me since it hasn't been a liquidity suck like I'd expect. This is because a lot of the liquidity moving to Sewer Passes came from folks selling their MAYC and Kennel Club (will reflect on this below in blue chips). For the most part, it's a bunch of people having fun playing some game and buying apecoin.

Moving on, the Porsche mint is struggling to mint out 7,500 NFTs at a .911 ETH price point (currently at 1,600). This is also positive. A lot of us are tired of these big brands/corporations coming into the space with something that seems like a pure grift. Vague roadmap with vague utility but it's a big corporation so they must be successful. Nope, we're smarter than that and aren't wasting our money. "Oh but Wilson, these are new entrants coming to buy our bags, this is how they get introduced". I disagree with this as I don't think anyone with a Porsche is looking to buy a digital picture of a Porsche, as they probably have better things to do.Next up is the data. As always, I like to just use the main Trends and Index's page. I don't larp as a data scientist like a lot of NFT twitter does because as always, there is no need to overthink NFTs. These are jpegs that are traded for millions of dollars, it's not supposed to make *that* much sense.While we're still down from the giga-pump we had 2 weeks ago (a lot of that was Captainz volume), volume is up week-over-week. To pat myself on the back, I predicted how the week of November 15th would be the macro NFT "volume" bottom (not price). This seems to be playing out and is the most important data point to look at in my opinion. We're now in a ~2-month NFT trading volume uptrend. This entire market is driven off of momentum and the point of death is no volume and undercutting. As long as this continues, things will never be "terrible".

Finally, bad decisions are facing consequences quickly in this market. If you FOMO into a hyped project you're going to get wrecked (usually). Let's look at this guy below.

He sold a Fidenza (Elite tier NFT art) to buy a rare Mutant Hound Collar at the Pico Schmico Omega Giga Top. Within 24 hours, this has turned out to be a terrible mistake. Like I said, it's "turn your brain off and don't overthink things" season. From the second I saw this happen I knew it was clearly one of the worst trades I had ever seen. The market is healing.

Blue Chips

Here's the week-over-week Blue Chip stats from Blur around 5am EST.

If we look back to the market update, as you can see, all of the Yuga assets are down. After their free airdrop, this liquidity has moved to buy either more sewer passes, or into the tier 2 Blue Chips as we can see by the price appreciation of Azuki, Doodles, Moonbirds, Penguins. This is a healthy rotation.Notably here, Punks are flat again week-over-week and by remaining a 63-68 ETH stablecoin since October, manage to flip back and forth with BAYC.

The Tier 2 projects all have a lot on the line though and I expect aggressive moves within the next 4 weeks – mainly Doodles and Penguins which are teasing big announcements. Doodles specifically has gotten a ton of FUD regarding how quiet the team is, and I expect a 20%+ move post announcement (unsure of direction). No, their partnership announcement didn't move the needle, this needs to be regarding Doodles 2.

The main outlier here is Clone X which cannot seem to catch a break and is slowly bleeding while the other 4 start to crawl upwards. The next few weeks will be critical for this team as well.Overall, the best projects are going up while degen stuff continues to trade hands. All is well.

Musings

I'll keep this section a bit shorter today. I'm feeling good right now and have been doing my best not to overthink things. While fungible tokens are clearly outperforming NFTs right now, the trend is that a ton of alt-coins have been flying lately with 20%+ moves. This is a precursor to what we're seeing now with NFTs, where we're getting a few degenerate free mints that are basically doing a quick 20x+ .This is where I feel like I've been needing to "turn my brain off" and not overthink things. Similar to buying doge and shib, these projects are just so memeable and funny, they're almost programmed to go up. I think the recent pump in Miladys is a good example of something that could be perceived as quite obvious in retrospect (which I clearly mid-curved).While I'd like to not *shill my degenerate bags* to 5,000+ people in this newsletter (I do this in discord instead 😂), I think there is a ton of opportunity out there right now which is why I am so antsy.

Whether you're looking to play the "trending project" game and sweep a few meme collections or bet on a big announcement from Pudgy Penguins/Doodles type teams etc., there are big swings happening on a daily basis. While by no means do I believe I have "found" the opportunity I describe below yet, I am confident that it's brewing right now.

Of course, I'd be foolish not to manage my risk and take profits on the way up. Yes there is a ton of bear cope on the timeline and this rally isn't over yet, but it's still a bear market. Things seem *hot* right now, because they are, all things relative. NFT market participants have goldfish brains and we seem to forget that we're not even doing 1/5 of ETH trading volume we did in the bull market, Blue Chips are down 50%+ in ETH terms and *still* 70%+ in USD terms – besides Penguins (of course I had to throw this in there).

Wrap Up

I had a phenomenal ending here but my quick fingers accidentally deleted like 5 paragraphs and I am irate to say the least (see above). Beehiive will not let me go back and undo this action and retrieve my deleted wisdom.

So I'll leave you with this instead. As we enter or remain in this "mini bull market" keep in mind that when those folks you haven't seen in discord since May/June come back asking what to buy, or when you hear the "wen moon" and "wen 10 ETH floor", or when your normie friends start asking if this is a "good price" to get back in, we'll be getting close, to the end.

Cheers,

Wilson