DataFi wrote this article 2 weeks ago, today seeing that Jump Trading has taken action, the team would like to share our personal perspective. Please read and DYOR.
The content will only focus on answering 4 main questions:
Bullish or Bearish with HFT?
Why would the Market Maker push up the price?
When do they push?
How much is the expected price push?
The following is our analysis. Hope to discuss further with readers.
1. WHY BULLISH?
DataFi will analyze two groups of wallets that have a high correlation with price lines, including:
📌 Top Holder: Actively collecting HFT
General trend 14D: Top Holder collected an additional 8.67M HFT, at the same time our Team also recorded 4.45M HFT withdrawn from CEX exchanges.
However, to better understand the behavior of the Top Holder wallet group, DataFi will consider the 30 EOA wallets with the highest netflow in 30D:
All 30 wallets increased their token holdings by ~8.67M HFT (~$2.77M)
3 large Market Makers including GSR, Wintermute and Jump Trading accumulated a total of 3M HFT
With the above wallet group, when considering wallet age, DataFi discovered a group of Fresh Wallets:
Contains only HFT
Wallet age < 30 days
Balance from 300k - 1.6M HFT and net withdrawal from Coinbase at the same time period.
👉 There is a high possibility that this is an individual/organization that wants to hide the act of collecting $HFT. The total balance of this group of wallets is 5.69M HFT.
Besides, the group of wallets < 30 days old is the group that collects the most $HFT in 30D. These wallets are all Fresh wallets and total Inflow ~ 4.23M HFT.
👉 There is a high possibility that sub-wallets of organizations and individuals have the power to influence the price of HFT because it is not the behavior of normal retail.
🎯 Conclusion: Top Holder is quite bullish on HFT.
📌 MM: Re-accumulate
There are 3 familiar MMs that HFT Holder is interested in:
(1) GSR:
They have continuously accumulated HFT from February 2023 until now. The current balance is 33M HFT ~ $10.7M.
(2) Wintermute and Jump Trading:
December 2022: Receive a total of 46.2M HFT from Treasury wallet and Airdrop. 40% balance has been distributed and re-accumulated from the end of June 2023 until now
Current balance = 28.5M HFT (not including unaccounted team wallets)
👉 Thus we see:
Jump Trading and Wintermute have delivered a relatively large amount of goods but the remaining 28.5M HFT is still a problem. Total balance of the above 3 MM = 61.5M HFT ~ 35% of circulating supply
🎯 So do they push up the price to distribute? Let's continue looking at question 2.
2. WILL MM PUSH HFT ANYMORE?
There are 3 reasons that DataFi thinks they will push up HFT prices in the near future:
First, all 3 MMs above participated in the Seria A round at a price of $0.4/token, meaning they are currently at a loss of 20%. This is a fairly low ROI compared to previous projects Jump Trading and Wintermute price => Price driving force
Second, MM's initial total balance = 46.2M HFT, and currently, the balance = $61.5M HFT ~ 35% of circulating supply. This means they are more proactive in controlling supply => confidently pushing prices
Third, HFT's current daily trading volume is $5-10M, supply on CEX ~ 89.2M => To distribute, MM must push prices to stimulate retail demand.
The question is how much will the price increase? Let's continue looking at question 3
3. WHEN WILL PRICES INCREASE TO WHAT LEVELS & WHEN?
Comparing the context in the previous price push and the current one, the team sees the following:
Previous price push: MM holds 46.2M HFT, BTC increased from $16k -> $25k and HFT increased by $0.28 -> $0.95
Current period: MM holds 61.5M HFT, the team expects BTC to grow back to the 30k mark in Q4/2023 and the current HFT price is $0.28
👉 It can be seen that in the current period, MM is holding more tokens than in the previous price push, besides, the market context will hardly have a strong breakthrough like in early 2023. That's why the DataFi team has higher expectations for MM's price push compared to the previous push to stimulate demand from the retail side, specifically the price range of $0.7-$0.95 or possibly higher, the $1.15 mark.
Thus, we have enough basis for price growth. So the next question is whether MM will push now or not?
4. Will MM push now or not?
👉 Consider tokenomics:
From November 5, 2023, HashFlow will start paying vesting for Private Round x3, Seed Round x16, Series A x0.8 funds
🎯 There will be pressure to release from the funds participating in the Seed + Private round, on the other hand, all 3 MMs above are participating in the series A round. So October will be a good time to push up the price of HFT, coinciding with the accumulation points. extreme of the options market.
👉 Consider "motivation":
Emerging MM IS GSR will want to push prices to build its reputation like DWF Labs, debuting in a downtrend context to make it easier than when the market is uptrend. Some projects that are being priced by GSR such as IMX, MASK,.. are showing signs of starting to increase. Although there is no basis to confirm this, it is still a possible factor.
5. CONCLUSION 🎯
🎯 There are many signals supporting the increase in HFT prices. The next thing you can do is reassess the fundamental analysis of the HFT project to determine whether you should place your hopes on it, long-term or short-term. Then combine technical analysis to determine the appropriate entry/SL/TP area, don't rush.
🔍Disclaimer: This is DataFi's perspective, not financial investment advice.
