🧠 Happy Friday, PokPok fam!

We’ve had a choppy week. 🦈 

With volatility still high, and entries pretty rough, let’s figure out what’s happening next.🔥 

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This Week’s Juice 🧃

• 🪓 A choppy week as the market consolidates recent volatility 👀 
• 🪙 Gold hits a new all-time-high over 2,500 as BTC lags (for now!)🚀 
• 🏦 Economy: PPI MoM @ 0.1% (expected 0.2%) 🚀 
• 🏦 Economy: Core Inflation YoY @ 3.2% (expected 3.2%) / Inflation YoY @ 2.9% (expected 3%) 🚀 
• 🏦 Economy: Retail Sales MoM @ 1% (expected 0.3%)

What’s on today?

🔷 Market Analysis ✨

🔷 Our portfolio allocation strategy 📈

🔷 Yield Farming Opportunities 🚜🥛

🔷 VC Investments & Token Unlocks 🪙

Got any suggestions? Send us a message!

Getting up to speed!🏃 

Economic Reports 📉 

We’ve had a big stack of reports this week, let’s go over the highlights and what they mean.

Report

Result

What does this mean for crypto/economy?

Producer Price Index (YoY)

Under expected by 0.1% 🔥 @ 0.1%

Lower PPI indicated lower inflationary pressure, and potentially lower bond yields which may result in more aggressive interest rate cuts in the future.

Positive for crypto 👍️ 

Core Inflation & Inflation (YoY)

Core: As expected @ 3.2% 🧱 

Standard: Under expected by 0.1%🤘 @ 2.9%

We look at both core and normal inflation rates as Core tends to be less volatile (more important)

Both measures of inflation have reacted to the recent market impacts (Japan Carry Trade) as both YoY readings are lower.

Positive for crypto 👍️

Retail Sales (MoM)

Over expected by 0.7% 👀@ 1%

Stronger sales growth indicates more robust consumer spending which is positive for stocks and crypto 👍️ 

However, signals resilience in the consumer economy which reduces probability of aggressive interest rate cuts.

Rate Cut Probabilities

The market recovery in the past couple of weeks (such as Retail Sales) is reflected in the current Rate Cut probabilities for September.

A few weeks ago we had over 70% probability of a 50bps cut in September but now…

~25% probability of 50bps rate cut

~75% probability of a 25bps rate cut

(with further rate cuts in November and December)

Gold hits new ATH as Bitcoin lags behind 👀 

• BTC has a 0.72 (positive) correlation to Gold (using a 180-day period)
• With recent Gold surges to all-time-highs, we can expect BTC to follow in the next couple of months
• Especially with rate cuts coming through in September, we can look at similar effects of BTC breaking ATHs in the next few months
• Note: This is just an assumption as we extrapolate from the relationship.

Market Analysis ✨

This week has been pretty choppy as the market consolidates recent volatility (as expected) — we’re looking ahead to next month for any potential significant moves, however, it’s important we maintain our key levels to the downside.

Tago Ratio Update: Current “consolidation” can be seen on our indicator as the market is unsure where to move next. Our centre reference line is our “bull market” reference. A rejection of this reference point would lead us to further derisking our portfolios until next year.

BTC Dominance

• We’ve been awaiting BTC dominance to reach ~59-60% for the past few weeks
• Currently, the trend is still up as we focus our short-term trading on BTC rather than altcoins which may be hedged towards bleeding further

BTC Analysis

• We’ve formed a range between 56k-62k as the market consolidates
• Delta has been negative over the past few days signalling shorting in this range and being bought up by limit buy orders to maintain price. (potential squeeze above the highs or exhaustion towards the downside)
• We want to see a long delta at these levels to trigger a squeeze, otherwise, we may look at chopping further into the weekend.
• In the current market, we recommend against opening long positions other than at our key levels as stop-losses may be placed at unfavourable prices.

Trade Idea: Spot Grid Strategies work well during market ranges. If you’re willing to hold BTC if it breaks lows, consider using a Spot Grid to dollar-cost-average and gain from the current market range with little risk! 🚀 

Looking at the upside 📈 🚀 

• We can see excessive shorting through billions in liquidations at ~60k and ~62k. These are potential levels to watch for short squeezes to the upside.
• Yesterday, we hit a low at a confluence level which gives us high confidence this may be the low for the next few days.
• Primary Targets 👆️ @ 61.75k and current high @ 62.75k as we see the market reaction. (considering closing positions or opening shorts if there’s a lack in demand higher (delta/buy volume) marking an SFP.
• Key Resistance Levels (repeat): 64.6k, 67k, 68.3k, 69.7k 🚀 
• Make sure you take profits on longs. Don’t be greedy. We’re watching you! 👀 

Looking at the downside 📉 👀 

• Value Area Low (VAL) @ 56.25k remains a pivotal level to maintain (we will begin to scale out of short-term longs if we break this level)
• Low target if we break below VAL ➡️ 53k (potential long)
• Lower Targets (and long opportunities) 👇️ 48.9k, 44k, 41.6k (repeated)
• Reminder: The market remains in a medium time-frame downtrend, ensure any short-term longs have clear stop-losses to prevent unexpected losses or liquidations!

Ethereum Analysis

• Ethereum has attempted to break to the upside ahead of BTC over the past few days, however continues to underperform BTC.
• We’re looking at potential Spot accumulation of BTC in this range and at lows for potential breakouts next week.
• We are expecting a potential further drop of ETH over the next few days (marking a potential low) @ 2450-2500 👀 
• Key Levels to the Upside 👆️ @ 2750, 2900, 3318, 3535
• Key Levels to the Downside 👇️@ 2450, 2300, 2200, 2100, 1950

Altcoin Analysis

• We continue to eye TOTAL3/BTCUSD performance (Alts against BTC) as a potential reversal may be cooking! 🍳🔥 
• As we look at our investment strategy, we will adjust our allocations towards altcoins/high-risk investments as we see fit
• Buying up oversold altcoins is more important than we might have thought if altcoins begin to outperform BTC! Keep an eye out; and get ready. 👀 

Check out our weekly portfolio strategy updates in the Pro Section! 🤩 

We’d like to hear about your opinion on our technical analysis charts.

- Are they too messy? Would you prefer a simplification of our levels?

- …Or is everything perfect?

Give us your honest opinion, we appreciate it!

Kevin - CEO @ Tago Research

Are our charts too complex?

Yes - please simplify No - just perfect

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Investment Strategy 📈

As Altcoin Dominance looks more confident, we are looking to allocate more funds towards higher-risk investments, however before we make any changes, we’d like to see further confirmation.

Here is an overview of our current experimental allocations for crypto portfolios:

Type

% Allocation

Yield Farming

20%

Focus on projects with low token unlocks

Short-Term Strategy

10%

e.g trades (or else in USDC lending)

Risk-Off/Stable Lending

40%

e.g USDC lending

Long-Term Strategy

28%

e.g Bluechips & Long term plays

Hedging

2%

e.g Protective Puts

DeFi & Yield Farming 🚜🥛

Chain Performance

• Little change in TVL over the past week as the market balances out. We’re looking at potential increases in TVL over the next month. (Opportunity for Yield Farmers)
• Sui continues to outperform the market over the past month with a further 18% increase in TVL over the last week. If you aren’t looking at Sui for Yield Farming/DeFi, take a look now. 🚀 

Yield Farming Opportunities

1. High Risk/High Yield

• Pool: WETH-KLIMA on ExtraFi (Base)
• Current Yield: 600% APY 🔥 🔥 (leverage available for even higher APY)
• ➡️ Stake here 
• Klima is an RWA Carbon Credits platform that we found a couple of months ago. We think it’s a great buy, especially with the yield available on ExtraFi.
• As most alts have, Klima has dropped over 70% in value in the past few months, eliminating a large part of the downside risk for yield farming as of now, with lots of upside potential.
• However, we suggest that you go unleveraged here to be on the safe side.

2. Medium Risk (Bluechip)

• Pool: Jupiter LP (JLP) on Jupiter Perps (Solana)
• Current Yield: 32.66% APY 🔥
• ➡️ Stake here 
• As Solana continues to grow as one of the largest DeFi chains in crypto, Jupiter’s JLP has proven to be a consistent yield opportunity this year.
• You may even be able to earn more yield on JLP using Kamino Finance’s JLP staking pool! Currently sitting at a further 47.91% APY 🚀 🚀 (liquidation risk)

3. Stable/Low Risk

• Pool: USD+ on Overnight Finance (Base)
• Current Yield: 10.32% APY🔥
• ➡️ Stake here 
• We’ve mentioned Overnight Finance’s USD+ before and think what they’re doing is really great
• Earn even MORE on your USD+ @ 36.21% APY 🚀 on ExtraFi Lending!
• Overnight Finance has become our primary stablecoin provider. While it’s important to maintain a diversified stablecoin portfolio, we’ve found them as one of the best options to dip into!

Altcoin Zone 🪙

Upcoming Token Unlocks

Take this as “projects with high inflation” which may have sell pressure:

• $W is seeing consistent unlocks of over 1% per week (roughly) we recommend you stay away from this in a bleeding market 🔴🔴🔴
• $MANTA is also high inflation, while mostly for ecosystem funds until next year, it may result in large selling pressure 🔴🔴🔴
• $MERL- 19 August 2024 - 17.1% of M.Cap ($8.26m) 🔴🔴🔴 
• $AVAX- 20 August 2024 - 2.42% of M.Cap ($195.18m) 🟡 

VC Investment Highlights

Yesterday, Chaos Labs raised $55M from Tier 1 VCs such as Galaxy and Coinbase Ventures. While this is not a project you can directly invest in, you may be able to gain exposure by using the protocols it supports.

Website: https://chaoslabs.xyz/

What is Chaos Labs?

Chaos Labs is a risk management platform that supports DeFi protocols with audits and risk assurance (debt, safety/hacks etc.)

We’re not sure if they will have a token or not in the future, but as a rising star ⭐️ company in the space, you may want to look at its client protocols, perhaps you can allocate your yield farming or strategies here to protect against hacks, etc.

We’re working on creating a structured system for our DeFi & Altcoin sections, so we want your feedback on which altcoins or sectors you’re most interested in. This allows us to prioritise your interests and find the best opportunities for you to dive right into!

How much of your portfolio do you allocate to altcoins?

Tell us a bit about your allocations and then submit your favourite alts/sectors!

I'm a BTC Maxi, sorry! 0-20% 20-50% 50-90% What's Bitcoin? My middle name is ALTS!

Thanks for reading today’s publication! We crave your feedback — got any suggestions for a specific analysis or questions for us?

Get in touch with at contact@tagoresearch.com or pop us a message on X at @tagoresearch.

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Disclaimer: The PokPok Pulse newsletter and any curated information provided by Tago Research are not intended as Financial Advice but as educational content for insights into the crypto market. Only invest what you can afford to lose. We are not liable for any losses incurred.