The Banana Zone is coming

SCOOP’S TL;DR

📈 MARKET SENTIMENT

  • Bitcoin dominance is steadily rising, which is expected and bullish for the market.

  • There won't be a true alt season until Bitcoin dominance tops out.

  • Memecoins have been resilient due to their low cost and ease of trading, but they will likely bottom out as Bitcoin climbs to peak dominance before the inevitable cascade.

🔥 THE TRENDING NARRATIVE

  • The Banana Zone - What is it?

🗞️ TOP STORIES

  • Pump Fun Exploit

  • $25m 12 Second Theft

  • Binance Spot Copy

🏆 WEEKLY WINNER

  • PEPE Investor

😡 REKT SECTION

  • GME FOMO Trader

PNG. Line Break - Triple Scoop
  • Crypto Total Market Cap $2.56T - 24/hour change 3.6%

  • Crypto Market Cap Total Volume $78B - 24/hour Change -15%

    Majors - 24/Hour change

    • BTC - $67,300 - 2.19%

    • ETH - $3101- 5.06%

    • SOL - $170- 5.8%

    • Bitcoin Dominance on the Rise

      • Bitcoin dominance is steadily rising, which is expected and bullish for the market.

      • There won't be a true alt season until Bitcoin dominance tops out.

      • Memecoins have been resilient due to their low cost and ease of trading, but they will likely bottom out as Bitcoin climbs to peak dominance before the inevitable cascade.

      Bitcoin's Bullish Move

      • Bitcoin (BTC) is making a strong move, breaking above the flag pattern it has been in for several months.

      • BTC could move higher and potentially reach $70,000 in the next week or two.

      Overall Market Performance

      • The crypto market is up 5.1% today, reaching new heights with a total market capitalization boost.

      • Artificial Intelligence (AI) tokens are shining, increasing by 11.2% in the last 24 hours.

      Highlights in AI Tokens

      • Fetch.AI (FET) leads the AI sector with a remarkable 14.5% increase in the past day.

      • Pepe is leading the memecoin charge, hitting new all-time highs with a $4.5 billion market cap.

      • WIF, also listed on Coinbase perps, is expected to make another run at its all-time highs.

      Memecoins: The New NFTs?

      • Memecoins are currently experiencing a surge similar to what NFTs did in 2021.

      • Pepe appears to be the frontrunner, and other memecoins are likely to follow.

    🔮 NARRATIVES TO FOCUS ON IN 2024

  • - AI Infrastructure / Autonomous agents

  • - GPU / Cloud Computing

  • - Gaming / Game-fi

  • - DEPIN (Decentralised Infrastructure)

  • - RWA - Real-World Asset tokens

  • - Memes - (you’re not too good for them)

  • - BTC Defi / BRC20

  • - New Layer 1’s

  • - Parallelization EVM / Modular Blockchains

  • - Solana Killers

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Crypto is a narrative & trend-driven game, where attention goes, the money flows. So what’s hot?

Raoul Pal, a renowned macroeconomist, recently provided insights on what he terms the "Banana Zone". The idea has gone viral among crypto enthusiasts and essentially represents a period of the market where the graph is shaped like a banana.

In short, it is very good for the market and should lead to explosive growth for Q3 / Q4 2024 and Q1 2025.

The Bananazone: Navigating Macro Trends and Cyclical Patterns

Raoul Pal, a renowned macroeconomist, recently provided insights on what he terms the "Banana Zone" through a series of tweets. Let's dive into the theme of the Bananazone and explore its implications on global markets, particularly focusing on tech and crypto assets.

A Cyclical Liquidity Phenomenon

Tweet: "Macro Summer and Fall are driven by the global liquidity cycle that exhibits clear cyclicality since 2008." - Raoul Pal, May 13, 2024

Since the global financial crisis of 2008, the liquidity cycles have become a defining characteristic of market dynamics. Governments reset interest rates to zero and restructured debt maturities, creating a predictable macro cycle. One thing to note, macro summer & macro fall, coincidently fall in line with our weather seasons, but it isn’t the reason for the name. However, it makes it quite easy for us to reference.

The Everything Code and Business Cycles

Tweet: "You can see the perfect cyclicality in ISM (the best guide to the business cycle)" - Raoul Pal, May 13, 2024

Pal introduces the concept of "The Everything Code," which illustrates how business cycles repeat due to rising liquidity. This mechanism helps debase currency to service debt rollovers, thus preventing a debt spiral.

Impact on Asset Prices

Tweet: "The effect of that debasement is to lower the denominator (fiat currency) and that makes asset prices optically rise in value. Here is the NDX..." - Raoul Pal, May 13, 2024

The debasement of fiat currency boosts asset prices, particularly growth assets like tech stocks (NDX) and cryptocurrencies (BTC).

NDX Performance Chart

BTC Performance Chart

Tweet: "Growth assets (tech and crypto) do best as they are in secular trends based around adoption (Metcalfe's Law)" - Raoul Pal, May 13, 2024

Metcalfe's Law is a key idea in the world of cryptocurrencies. It explains how the value of a network increases as more people use it.

What is Metcalfe's Law?

Simply put, Metcalfe's Law states that the value of a network is proportional to the square of the number of its users.

Example of Metcalfe's Law

Imagine you have a social media platform with 100 users. According to Metcalfe's Law:

  • The value of the network would be 100 users squared, which is 10,000.

  • If the number of users doubles to 200, the value of the network doesn't just double—it quadruples to 40,000 (since 200 squared is 40,000).

In other words, as more people join the network, its value grows much faster than the number of users.

Tech and crypto assets thrive due to their rapid adoption rates. Pal predicts that crypto market capitalization could grow from $2.5 trillion to $100 trillion over time, driven by these trends.

The Banana Zone in Context

Tweet: "In Macro Summer and Fall tech does really well and has its own mini-Banana Zone, with Fall being the most pronounced." - Raoul Pal, May 13, 2024

The Bananazone refers to a period where asset prices, particularly in tech and crypto, experience significant upward momentum. This is most pronounced during the "Macro Fall" phase, where liquidity growth peaks.

Forecasting the Banana Zone

Tweet: "The transition to Macro Summer is relatively forecastable due to the repeating cycle...Again The Everything Code." - Raoul Pal, May 13, 2024

Pal emphasizes the predictability of these cycles, allowing investors to anticipate the transition into the Banana Zone. However, he cautions that while the general trend is foreseeable, the exact nature of market movements can vary.

Market Mysteries and The Everything Code

Tweet: "The odds of this changing significantly are low due to the current debt rollover, the election, and global issues such as China." - Raoul Pal, May 13, 2024

Despite the predictability of these cycles, Pal acknowledges that market dynamics can surprise investors with sharp corrections or prolonged sideways movements. Understanding The Everything Code offers a high-probability framework, but one must remain vigilant for unexpected market shifts.

THE CAT RACE - UPDATE

The Race is on for the cats to a billion dollars

🏋️ BARBELL’S WEEKLY PICK

In each issue, our Founder ‘Jack Barbell’ delivers a hot rising star crypto asset that is yet to explode.

You can Follow Jack Barbell on X - @thebarbell_

Last week’s Pick - $BODEN - Up 65%

Last week’s Pick - $MICHI up 25%

Pump Fun Exploit - Not Much Fun To Be Had

At a glance 🔎
  • Pump Fun allows developers to launch tokens without seed liquidity.

  • Revenue comes from users buying and selling tokens.

  • Any token that exceeds market caps of $69k can then be listed on the Raydium DEX.

  • On Thursday the 16th of May, trading had to be paused due to an exploit.

  • Smart Contracts responsible for issuing meme coins were exploited.

  • The attacker tricked the platform’s bonding curve into accepting phantom SOL tokens they had borrowed and repaid as a flash loan.

  • Bonding curves were then filled with non-existent SOL, making tokens look like they have value when they don’t.

  • Losses currently stand at around $2m.

🕵️ Scoops take: 

There is no fun to be had here.

The strangest part is that the exploit seems to have come from within the company itself…see below Tweet.

We shouldn’t view this exploit as charity despite the hacker saying the stolen funds won’t be kept but instead be transferred to some token users.

The actual known reason for the hack or how it was specifically executed is still to be determined…this is a developing story

$25m Stolen in 12 Seconds - Gone Quicker Than It Took Us To Type This.

At a glance 🔎
  • American Brothers, Anton and James Peraire-Bueno have been accused of money laundering and wire fraud.

  • The US Department of Justice said the heist is a first of its kind.

  • The brothers stole $25 million in Ethereum through a scheme they plotted months for.

  • They used highly specialised skills to exploit ETHs process for validating transactions.

  • They gained access to pending private transactions altering the transactions to obtain the user’s funds.

  • The stolen funds were refused to be returned as the brothers took steps to launder the funds.

  • They each face 20 years in prison.

🕵️ Scoops take: 

We understand that the two brothers are extremely intelligent having studied maths and computer science at the Massachusetts Institute of Technology.

However, this does not put your faith in ETH one bit that pending transactions can be exploited with such ease.

It is maybe unfair of us to say this is an Ethereum problem as it is a wider security issue but it just goes to show how volatile transactions can be.

PNG. Line Break - Triple Scoop

Binance Spot Copy - A Brilliant Introduction

At a glance 🔎

  • Binance has announced Spot Copy Trading.

  • The new offering will enable users to increase their portfolios by simultaneously copying up to 10 lead traders.

  • The purpose is to allow a straightforward approach to trading.

  • This differs from future trading which carries the risk of leverage.

  • Lead traders will earn a share of the profits and a commission on trading fees.

🕵️Scoop’s take:

We love this as retail is coming and future investors must know how best to conduct their trades.

The new offering will increase trust and confidence as well as developing key knowledge.

We are big fans.

🏆 WEEKLY WINNER🏆

$PEPE Investor

Just one week on from hitting its ATH it wouldn’t take long for an investor to share their trade.

One specific investor’s PEPE ride has been shared…strap in.

The investor spent $3k to buy 4.9 trillion $PEPE on April 15th 2023.

He sold 1.41 Trillion for $7.4m and held the rest.

The remaining 3.5 Trillion has reached a value of $38.9m

Total profit stands at $46.3m a gain of 15,718x

Bravo.

😡 THE REKT SECTION 😡

GME FOMO Trader

If you do not know by now, FOMO trading is never a way to make money.

If anything, you are other investors’ exit liquidity so you are just making other people money.

Lookonchain has shared 3 individual traders who each lost tens of thousands of dollars buying the top.

Check out the below.

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