The Week Ahead - W/C 18th September 2023

Hashblock Capital is an independent Crypto research firm. We deliver actionable, institutional-grade analysis across listed tokens.

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TLDR;

• Apecoin ($APE) unlocks 11.02% of the circulating supply, equal to $54.41m.

• Space ID ($ID) unlocks 6.45% of the circulating supply, equal to $3.92m.

• dYdX V4 is scheduled to go live by the end of September. We await confirmation from the team on the chain migration date.

• RDNT launches on ETH mainnet on October 3rd. Price has started to reflect this upcoming catalyst.

• Messari’s Mainnet 2023 conference starts on September 20th - watch for project updates and releases.

• The next hearing date for the Binance vs SEC case is September 18th.

Unlocks

Given prevailing weak price action, tokens with significant unlocks have traded heavily throughout 2023 due to the imbalance between supply and demand being accentuated. These environments are characterized by the lack of a "next marginal buyer," and therefore the increased supply offered by unlocks tends to have a large relative impact on prices.

There are a couple of large unlocks coming up this week which could bring activity. In order of event, $APE and $ID both released a significant amount of tokens. This is likely to increase volatility and action within these names.

17th September - 01:00UTC

Apecoin ($APE) unlocks 11.02% of the circulating supply, equal to $54.41m. The last major unlock saw 4.23% of circulating supply hit on 17th August, and since then, $APE has underperformed the market by over 32.19%. The unlock on the 17th of September is more than twice the size of August’s supply drain, so we anticipate increased volatility in $APE in the coming days.

22nd September - 01:00UTC

Space ID ($ID) unlocks 6.45% of the circulating supply, equal to $3.92m. The last major unlock also saw 6.45% of circulating supply hit on 22nd August, and since then, $ID has traded slightly higher, as open interest showed large holders had hedged prior to the event.

Mainnet Conference

The Mainnet 2023 conference will be held on September 20-22, 2023, at Pier 36 in New York City. It is an annual summit hosted by Messari, a crypto data and research firm. The conference will bring together over 1,000 crypto leaders, builders, investors, and entrepreneurs to discuss the latest trends and developments in the industry.

The agenda for the conference includes keynotes, panels, workshops, and networking events. Some of the topics that will be covered include the future of decentralized finance, the rise of non-fungible tokens, the regulation of cryptocurrencies, and the security of the crypto ecosystem.

Projects often use these events to announce major updates, so having a pulse of the upcoming talks can prove to be a source of edge. Our picks to watch include:

• Wed Sep 20, 9:50 AM - 10:20 AM EDT - Fireside With Ripple's Brad Garlinghouse and Stu Alderoty

• Wed Sep 20, 2:10 PM - 2:30 PM EDT - Worldcoin or: How I Learned to Stop Worrying and Love the Orb

• Wed Sep 20, 3:25 PM - 3:55 PM EDT - Cosmos at a Crossroads: What Will Save the 'Internet of Blockchains'?

dYdX V4 launch date

dYdX V4 is a major upgrade to the dYdX decentralized exchange. It introduces a number of new features, including:

The new order book is based on the 0x protocol, which is a popular open-source protocol for decentralized trading. This makes the order book more efficient and scalable, as it can handle more orders and trades.

The margin trading feature allows users to trade with borrowed funds, which can magnify their profits or losses. The maximum leverage of 10x means that a user can control a position worth 10 times their initial investment.

The new staking system rewards users for providing liquidity to the dYdX exchange. Liquidity providers are those who deposit funds into the exchange's trading pools. This allows other users to trade quickly and easily, without having to worry about slippage.

The new API makes it easier for developers to build dApps on top of dYdX. dApps are decentralized applications that run on the blockchain. They can be used for a variety of purposes, such as trading, lending, and borrowing.

dYdX V4 is a significant upgrade that makes the exchange more powerful and versatile. It is a major step forward for the dYdX project and the DeFi ecosystem as a whole. The latest estimation of the V4 launch is the end of this month, however, any confirmed date is likely to see some short-medium term outperformance of the DYDX token, as the upgrade is seen to be a major update and many participants have been watching its progress and development.

RDNT Mainnet Launch

We outlined our $RDNT thesis last week and highlighted our belief that the upcoming Ethereum mainnet launch is a major milestone for the protocol that is not yet being priced in. Since releasing our thesis, the token has outperformed and reclaimed a major technical level closely watched by traders - notably the 0.2180 September range low.

With RDNT down around 35% since Binance launched futures contracts in April 2023, we believe the upcoming catalyst may cause volatility into month-end and is worth watching.

Binance vs SEC - 18th September

In June 2023, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its CEO, Changpeng Zhao, alleging that the company had engaged in a "deceptive scheme" to operate an unregistered securities exchange in the United States. The SEC also accused Binance of failing to restrict US customers from its platform and of commingling customer funds.

Last Friday, the SEC filed additional charges against Binance for failing to cooperate with the investigation. The judge in the case has granted the SEC's motion to unseal previously sealed documents, which could shed more light on the allegations against Binance at the 18th September hearing.

Legal experts have outlined three potential outcomes of the case:

• Binance agrees to comply with US regulations and provide transparency. This is considered to be the least likely outcome, as Binance has a history of resisting regulation.

• The SEC continues to investigate Binance and eventually brings the company to court. This could lead to fines, penalties, or even the closure of Binance.

• Binance delays the case and drags out the legal process. This could put pressure on the SEC and lead to a negotiated settlement, however, would also have implications for the spot ETF approval process. 

It is still too early to say what the ultimate outcome of the case will be. However, the SEC's charges against Binance are serious and could have a significant impact on the company's future.

In addition to the legal challenges, Binance is also facing other problems, such as declining trading volumes and pressure from regulators in other countries. The company is also facing competition from other cryptocurrency exchanges, such as decentralized counterparties and Coinbase.

It remains to be seen whether Binance will be able to overcome these challenges and remain a major player in the cryptocurrency industry. However, the legal battle with the SEC is likely to be a major distraction for the company and the results of the 18th September hearing could prove to be crucial to the process, and short term market sentiment.

FOMC September Meeting

The Federal Reserve is expected to hold interest rates steady at its next meeting on September 19-20, 2023. The central bank has raised rates 11 times since March 2022 in an effort to combat inflation, which is currently at a 40-year high. However, there are growing concerns that the Fed's aggressive tightening cycle could tip the economy into a recession.

As a result, many economists believe that the Fed will pause its rate hiking cycle at the September meeting. However, there is still a small chance that the Fed could raise rates by 25 basis points. The decision will likely depend on the latest economic data, which will be released in the days leading up to the meeting.

If the Fed does decide to hold rates steady, it is likely to signal that it is open to raising rates again in November. However, the Fed will be closely monitoring the economic data and could change course if inflation starts to come down or if the economy shows signs of slowing down.

As usual, there is likely to be increased volatility into Wednesday’s FOMC meeting, and any surprised can dictate price action in the short-medium term.

Hashblock Capital is an independent Crypto research firm. We deliver actionable, institutional-grade analysis across listed tokens.

Follow us on Twitter for more insights, or join our email list to get real-time analysis on catalysts, events, and flows.