Today’s Narrative - 📉Bearish📉

Macros

• Market consolidation persists, with no clear directional momentum, suggesting traders should stay cautious and avoid over-leveraged positions. This phase often signals preparation for a more significant move, so staying alert is key.

• $ETH is entering a favorable seasonal period, making it worth considering for accumulation ahead of its expected stronger performance next quarter.

• Holiday closures and profit-taking dominate, as traders wrap up the year. Use this time to analyze strategies and prepare for 2024 rather than rushing into trades during low-volume conditions.

• Volatility opportunities remain slim, but a spike at the U.S. open could present better trading conditions for sharp movers. Be ready to act if these moments align with your strategy.

Crpytos

• Bitcoin's recent 3% drop reflects continued short-term bearishness, but it could offer accumulation opportunities for long-term holders as BTC edges closer to key support levels.

• MicroStrategy’s inclusion in the Nasdaq100 is a milestone for BTC-focused companies, signaling institutional acceptance. Watch how this impacts sentiment for Bitcoin-related equities.

• $ENA shows resilience, holding above $1 despite Arthur Hayes selling 9M tokens valued at $10.6M across exchanges. Hayes has been a top signal this cycle, often marking local tops. His selling coupled with ENA’s price stability suggests underlying strength. Use this as a cue for confidence in the narrative. Check out Hayes’ activity here.

• $FUEL offers long-term upside, currently priced at $0.04 with significant VC backing. It’s worth considering for accumulation, as its potential for 5-10x gains aligns with the market catching up to earlier VC valuations.

• Sonic Gateway is set to launch, bridging Sonic and Ethereum L1. This ecosystem enhancement could provide a speculative narrative for Sonic-adjacent projects.

• Pendle's Dec. 31 airdrop snapshot is a reminder to stake if you’re looking to capitalize.

• Hyperliquid FUD continues, with concerns about a North Korean hack and hacked bridges. Monitor closely, as the ecosystem’s future hinges on security resolutions.

• $POPCAT could rebound, down 70% but historically renouncing hard after similar dips. Consider it for speculative plays.

• $SUI and $ENA stand out for dollar-cost averaging, given their strength in a choppy market. These coins are suitable for spot investments while waiting for improved conditions.

• Berachain’s Beramas teaser could drive speculative attention. Keep an eye on the announcement for potential trading or ecosystem opportunities.

• Aelf ($ELF) released Aevatar Intelligence, a no-code, open-source framework designed to make AI agent creation accessible to both Web3 newcomers and experts.

Our Stance

The market is still navigating a low-volume, holiday-driven phase, making it an ideal time to step back, reassess strategies, and prepare for the new year. Long-term, we maintain a bullish outlook, especially on assets like $ETH and $BTC, which are aligning with broader adoption and favorable narratives. Projects like $ENA continue to demonstrate resilience, even under selling pressure, which solidifies confidence in its potential. Similarly, $FUEL offers an attractive entry point for patient investors looking for long-term gains.

In these conditions, dollar-cost averaging into strong narratives like $SUI, $ENA, and $FUEL while monitoring speculative plays like $POPCAT and $PENDLE can provide a balanced strategy. Use year-end dips to build positions smartly, as the quieter markets can often offer opportunities hidden beneath the noise.

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📉Bearish📉

Hyperliquid: Hackers, FUD, and $60M Withdrawn – Should You Be Concerned?

It’s been a rough few days for Hyperliquid, as the platform faces fears of a North Korean hacking incident. A reported $60 million was yanked from the protocol following news that a wallet linked to the hack had ties to known North Korean cybercriminals. While the panic might feel justified, let’s break it down.

What Happened?

News broke that hackers allegedly siphoned funds from Hyperliquid’s ecosystem, leading to a $700k loss in one wallet. That wallet was reportedly linked to the infamous Lazarus Group, North Korea’s elite hacking unit known for targeting crypto projects.

The market didn’t take kindly to the news. Fear, Uncertainty, and Doubt (FUD) spread quickly, with many users withdrawing funds to avoid becoming collateral damage.

Is This Normal?

Unfortunately, yes. Bridge hacks and protocol exploits are common in crypto, with hackers targeting vulnerabilities in smart contracts or operational security. Projects like Ronin, Harmony, and now Hyperliquid have learned this the hard way. These attacks often stem from weak bridges (the tech used to transfer assets between blockchains).

Hyperliquid isn’t alone, but the association with Lazarus Group is raising eyebrows. This group has been responsible for billions in crypto theft and funds some of North Korea’s operations.

Should You Panic?

Not quite yet. Hyperliquid’s price has held surprisingly strong despite the hack, trading near support levels of $25-$26. This stability signals resilience, even amidst heightened concerns.

TLDR

We’re optimistic about Hyperliquid. The current price action suggests the market is willing to look past the FUD if the broader crypto environment improves. If you’re already holding, consider staying the course unless the price dips significantly below key support. For potential buyers, a dip to $20 would present an excellent entry point, as the project is likely to rebound as sentiment improves.

Our Advice: Keep an eye on updates from Hyperliquid. If they can address security concerns effectively, the project could emerge stronger. For now, this may be an opportunity to accumulate at discounted levels while the market stabilizes.

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