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š° Is Ethereum (ETH) Overheated? Time to Face The Facts!
š 6 ETH-Beta Alts On Our Radar!
šø MEMEoirs of a Degen!
š¢ Biggest Announcements
š Banterās Take
GM Degens,
What if nothing ever really changes and history always repeats? Weāre seeing ETH finally play catch-up, but itās fair to ask whether itāand the broader crypto marketāis running too hot right nowā¦
We donāt think so, at least not yet. Today, weāll dig into why, and weāll also explore our favorite Ethereum (ETH) beta plays as ETH pushes back toward its all-time high (ATH).
Letās dive in!
š Market Catch-Up
Top 100 coins Daily Performance - Banter Bubbles
Source: CoinMarketCap
š° Question of the Day
Is Ethereum (ETH) Overheated? Time to Face The Facts!
The weekend rally rewired sentiment, with Ethereum (ETH) finally snapping above $4,000 and not looking back.
Now everyone is asking the same thing: are things getting overheated, or is there still room to run? The straightforward answer is: leverage is high and risk is rising into CPI, but the classic late-cycle froth still isnāt flashing full red, which leaves room for continuation if data cooperates.
Letās start with open interest (OI), which has swelled north of $100B, a level that fuels trend continuation but also makes markets fragile around data printsālike the incoming CPI.
With CPI on deck this week, even a small surprise can trigger outsized moves and liquidation cascades as perp venues hunt liquidity. Add a weekend CME gap on BTC as a technical magnet and itās setup for volatility clusters around the release. Therefore, the āoverheatedā narrative is hard to dismissāstructure is stretched, and macro is the fuse.
But, ETH sits at the center of it all. This is the main reason that many are considering whether the market is overheated or not. The issue is that the sentiment is getting ātoo bullish.ā We just saw:
Joseph Lubin (Ethereum co-founder) predicting ETH could flip BTC market cap within a year.
Tom Lee has forecasted Ethereum could quadruple or more, reaching highs around $16,000 or greater, referencing its momentum similar to 2017 and Wall Street adoption.
Be fearful when others are greedy, right? However, looking at the metrics, it seems that ETH still has room to run, and as such, the answer is that it probably isnāt overheatedānot yet at least.
ETH just printed its highest weekly close since the 2021 peak, with ETH/BTC reclaiming longer-term trend levels and historical RSI behavior showing it often breaks above 70 for another leg before fading. There are fresh signs of capital flow and accumulationānet capital change favoring ETH versus BTC on certain datasets and a pickup in large ETH holder cohorts. If ETHās relative leadership holds, BTC dominance rolling over has historically set the stage for ETH strength to spill into alts, with TOTAL2/BTC breaking multi-year downtrends and long-horizon momentum approaching a decision point.
Furthermore, ETHās MVRV Extreme Values point to more room to run, as Aliās chart shows below.
At the same time, the āweāre at the topā story is missing a few other signaturesā¦
A composite of 30 bull-market peak indicators is still at 0/30, hinting that we are nowhere near the traditional blow-off top yet. Retail proxies tell the same tale: Google Trends for BTC are creeping up, but still at lows. While ETH spiked harder, and some altcoins have gone parabolicāwhich signals risk-on appetiteāYouTube crypto views are still far below prior times ETH was at $4,000, and Coinbase app rankings remain well below 2021 frenzy readings. In other words, retail is watching, not stampeding.
Click below to see all 30 bull-market peak indicators on Coinglass.
Source: Coinglass
Of course, none of this negates the core risk: when open interest is this high, macro becomes binary-feeling, and CPI is the volatility calendarās main act this week. The setup can be ātoo good to be trueā right before it either extends cleanly or punishes crowded longs, which is why risk controls matter more than narratives in the next 72 hours. As usual, none of this is financial advice, and you all need to do your own research.
Final Thoughts
Is the market overheated? Parts of it areāpositioning and narrative around ETH are undeniably hotābut the classic top-of-cycle signals and retail intensity arenāt flashing red. That leaves room for upside if ETH keeps leading and CPI doesnāt disappoint.
Respect the setup. With OI this high, weāll tighten risk into CPI, consider smaller position sizes, use clearer invalidation levels, and stay mindful of liquidation dynamics on perps. Volatility clusters are highly likely.
If ETH strength survives the CPI test, an altcoin rally becomes more probable. Weāll start with quality ETH-betas where fundamentals are accelerating (see below) and avoid overextending into illiquid ones until dominance and liquidity confirm the rotation.
Bottom line: trend says up, leverage says careful. Let CPI be the judge this week.
Now on to those ETH-betasā¦
š Degensā Den
6 ETH-Beta Alts On Our Radar!
On a quick side note, Pump.Fun (PUMP) is pumping hard, as we predicted over the last few issues. Overall, the narrative around PUMP metrics is changing:
The number of tokens bonding on Pump.Fun is going up
Competitor market share is going down
PUMP buybacks have been quite consistent and larger than before
But here is what everyone excited the most: We said Pump.Fun was going to start shipping updates and features and we are seeing the first signs of this with founder Alon posting about it on X. All sings pointed to it, and we called it. So hit subscribe below so you donāt miss out on the next move. š
But now, over to our main focusā¦
Weāre leaning into an ETH-led rotation, but doing it with quality ETH-beta plays that have real traction. Hereās what weāre looking at and the reasons why each makes the cut.
Pendle (PENDLE)
First, weāre looking at Pendle (PENDLE) for its on-chain yield markets going mainstream.
Source: DefiLlama
TVL is at fresh highs (~$8.5B) with growing annualized revenue; strong product-market fit.
Newly launched Boros funding-rate swaps are live. Boros is a Pendle product that lets users trade perpetual funding rates on-chain by swapping fixed vs. floating exposure via tokenized Yield Units, enabling hedging or speculation on BTC/ETH funding.
High average value per user of $350k, and rapid expansion across ecosystems, including launch on HyperEVM 10 days ago.
Aave (AAVE)
Next, weāre looking at Aave (AAVE) for dominance in on-chain lending and credit.
Aave is leading market share in lending TVL and active loans; revenues and fees are ramping.
Net deposits are crossing $60B; last week, Aave got closer to the top 40 of US banks by size.
Chainlink (LINK)
Weāre looking at decentralized oracle Chainlink (LINK) for the institutional rails and RWA narratives.
Many are calling LINK the ābankerās coinā: Swift, UBS Asset Management, and Chainlink completed a pilot showing how tokenized fund subscriptions/redemptions can settle via Swiftās existing rails, effectively bridging tokenized assets with the fiat payment systems that 11,500+ institutions already use.
Chainlink launched Data Streams for U.S. equities and ETFs, bringing real-time, high-throughput prices for assets like SPY, QQQ, NVDA, AAPL, and MSFT onchain across 37 networks (on-chain derivatives and RWA use cases right there.)
Weāre also looking at Lido (LDO), ENS (ENS), and some others.
Catch the full list in todayās Crypto Banter with Ran.
Reminder: High open interest plus CPI this week means sizing and risk control matter to us. We like these names for their fundamentals and ETH beta narrative, but weāre keeping position sizes disciplined into the print and planning entries with invalidation in mind.
You can catch Kapoor, who is trading Ethereumās leading decentralised exchange (DEX), in todayās issue of The Daily Candle. Click below to head over and see his āTake Profitā levels. And donāt forget to subscribe to it too! š
šø MEMEoirs of a Degen!
š¢ Biggest Announcements
Executive Director of White House Crypto Council Bo Hines Steps Down to Join Private Sector
š Banterās Take
This week could turn sharply bullishāor get ugly. Open interest (OI) is elevated, and a hot CPI print could trigger mass liquidations if it surprises to the upside.
We remain bullish, but this is a time for disciplined risk management and a clear headāno chasing hype, just planning our moves in advance.
See you all tomorrow!