🌵 The Intersection of Crypto & AI 🌵

Big Brain Breakdown

Market Metrics

Total Crypto Market Cap: up 2.5% to $2.77T
Total AI Sector Market Cap: up 4.1% to $40.5B

Top Movers (24hrs):

📈Atlas Navi (NAVI): up 28.5% to $0.2887
📈TokenFi (TOKEN): up 26.9% to $0.1771
📈Kizuna (KIZUNA): up 19.9% to $0.0₇1291

Daily News

🟠 The Wayfinder contracts go live today, allowing users to stake $PRIME in exchange for $PROMPT, with 40% of the tokens allocated to stakers, potentially yielding 30 PROMPT per PRIME staked based on current supply and staking assumptions.

🟠 iExec launched an upgrade of its DataProtector tool, which helps developers create applications that allow users to control and monetize their digital assets. This tool enables secure sharing, renting, and selling mechanisms that can impact the handling and profitability of AI-generated data and content onchain.

🟠 NEL 👨🏼‍🚀 (@nellimkopi) noted that $OLAS is down 77% from its all-time high and hasn't been discussed much on Crypto Twitter recently. They observed a wallet with a 75% win rate purchasing $100k worth of $OLAS and are considering whether to follow suit. 👀

🟠 Akash announced the winners of their second hackathon, featuring 12 projects that enhance network functionality using Akash. Notable winners include "AkashPlayground" for AI/GPU, "CloudCost" for Dashboard, "AkashPay" for Fiat Payments, and "akash-llama" for late submissions.

🧠 Big Brain Breakdown

As your trusted source of alpha in the crypto space, we thought it was time to cover a topic we wished someone else had taught us back when we got started with crypto: using sentiment as a trade signal.

If you’re on Twitter, you probably see everyone always bragging about how much money they are making in crypto. Yet, it’s common knowledge that 99% of traders LOSE money.

Is everyone on Twitter part of the profitable 1%?

No.

Crypto Twitter (CT) has been, and always will be, the ultimate counter trade signal. If you follow the same trades as the rest of the herd, statistically you will become part of the 99% (rekt).

If you are trying to catch every rotation and narrative you see “developing” on CT, just know that you, my friend, are the shillfluencers exit liquidity. Investing in the hottest coin on CT is the best way to lose money and completely miss the opportunities to profit this cycle.

Now with the ceation of new AI tools, it is possible to track CT’s sentiment on individual projects and actually chart that against the token price. As a subscriber of Onchain Outpost, you are leaps ahead of the competition who only receive their insights from CT, allowing you to avoid becoming exit liquidity and increasing your chances of being in the 1%.

Here are several case studies on times when CT was completely wrong, and how extremes in sentiment can be the ultimate trade signal if you know what you’re doing.

Memecoins

PolitiFi is undoubedly a strong narrative for this cycle given the US election and the division between Trump and Biden’s stance on crypto. Back in April the narrative was HOT and multiple political memes ran hard. There was exuberance on the timeline and it was “obvious” memes like BODEN and TRUMP were going to a billion dollar market cap.

Alas, Twitter was wrong… again.

Note to self: you probably should have sold it at $1. I mean look at this euphoria that was followed by a month of punishment…..

Similarly, WIF holders got way too excited just days before the (local) top. But, WIF was going to be on the Vegas sphere! Buy the rumour, sell the news.

When CT thinks that we have entered a new paradigm, it’s probably time to take some profits and lock in the generational wealth you just made on magic internet coins. Remember, be fearful when others are greedy…

The same counter trade exists when CT gets incredibly bearish too. One red candle means “the crypto market is going to zero” according to most people, until the next green candle of course.

Here is another case. Imagine selling your PEPE stack when CT was crying that attention would never comeback after the Solana memecoin frenzy took center stage. Generational wealth missed by listening to the gurus on Twitter. Patience anon.

Blue chips

Sentiment is a useful trade signal for coins with fundamental value too. This was demonstrated recently with ETH in the lead up to the ETH ETF approval date. The consensus was that the ETF wouldn’t get approved, and ETH was trading at under 3k while everyone on Twitter tweeted “ETH is dead, I’m all in on SOL”. The next day, the ETF was approved and ETH went up $1,000.

The herd on CT was wrong, once again.

Another prime example is MKR. You can see the exaggerated MKR negative sentiment back in September last year. Looking back, this was one of the easiest trades of the cycle.

Long story short, sentiment is a powerful indicator to add to your trading tool kit. Use the herd sentiment to your advantage, and do the exact opposite of what everyone else is doing. Develop your own theses, don’t trust the shillfluencers yearning for your exit liquidity, and lock in that generational wealth when the time comes.

The market is vicious, and truly takes its prisoners. We want you all to succeed, so when you hear all of CT claiming we are in the Banana Zone and you get the urge to start looking at properties in the Bahamas, it is probably time to take some chips off the table.

Happy degenning.

Meme of the Day

Rugging you on the meme today