Fed Hike Ruins the bottom? Elon+Doge+Twitter, All eyes on Arbitrum, Reddit Avatar NFT's Killer App

Fed Hike Ruins the bottom? Elon+Doge+Twitter, All eyes on Arbitrum, Reddit Avatar NFT's Killer App


Hi everyone, welcome to issue #5 of the VirtualBacon Newsletter.

In this week's issue:

  • Bitcoin - Too early to call bottom
  • Ethereum - New uptrend developing
  • Bitcoin Dominance - Bull Trap?
  • Fed Hikes Interest Rates by 75 Bps
  • Elon + Doge + Twitter
  • Reddit Avatars - NFT's Killer App?
  • All eyes on Arbitrum (Odyssey Reboot?)
  • Top Performing Cryptos of the Week
  • Upcoming Events to Watch

Bitcoin - Too early to call bottom

Although Bitcoin has had a significant bounce, it's still within the long term range between the 18.5k support and 24.5k resistance.

We have warned in last week's newsletter against calling the Bitcoin bottom too early.

Zooming out shows the clearer picture around the recent move. 24.5k is the previous lower high made in August. In order for Bitcoin to reverse the downtrend since November 2021, it needs to make a higher high above the previous lower high.

Therefore, Bitcoin needs to at least reach 24.5k before we can consider this a a potential long term bottom.

If Bitcoin can retest 24.5k, it would complete the first step of a double bottom pattern and signal a long term reversal.

On the downside, 18.5k needs to hold in order for Bitcoin to avoid a larger crash. If 18.5k does break, the next support level down is around 12k which is the bear market peak in 2019 and the consolidation in the summer of 2020.

Before either of these scenarios happen, Bitcoin is technically in a sideways chop period between 18.5k and 24.5k. So exercise caution and don't jump to random predictions too quickly. Wait for the next move to be confirmed before acting.

Ethereum - New uptrend developing

Ethereum is still looking strong as a new support level is made at 1200.

As discussed last week, in order for Ethereum to break out of its downtrend, it needs to make a higher low followed by a higher high. This is the classic reversal signal from a downtrend into a new uptrend.

Looking at the Ethereum price action since last November, we see a clear downtrend as indicated by a series of Lower Highs (LH) and Lower Lows (LL).

This is why the recent bounce on Ethereum is so important, as we have formed the first Higher Low (HL) in the past year. A higher low is the first signal before a major reversal.

Following the recent rally, we need to watch the next few weeks closely as the recent higher low at 1200 needs to hold in order for the reversal scenario to continue for Ethereum.

If Ethereum dips back below 1200, the higher low made in October would be invalidated and the downtrend continues.

If Ethereum does stay above 1200 and bounce back in the short term, it would create a strong signal and we can wait to monitor its reaction at the 1950 resistance.

The final area to watch for Ethereum is at the 1950 resistance. If Ethereum can break above 1950 and form a new Higher High (HH), this would produce a classic trend reversal signal. Following this signal we are likely to see 3-6 months of uptrend for Ethereum to rally into the 3k ranges.

Still a bit too early to call the bottom on Ethereum, but it is looking brighter than Bitcoin as early signs of a new uptrend is forming.

Bitcoin Dominance - Bull Trap?

Bitcoin dominance has had a retrace this week, as a few large alts like ETH and DOGE had major rallies this week. However, beware of this move as we are still in a risk-off cycle for Altcoins and the risk of holding Altcoins here is still high.

Back in April we had a similar bull-trap on Bitcoin dominance where Altcoins briefly rallied but got destroyed when markets dumped in June.

I continue to focus on accumulating BTC and ETH in this risk-off period, as it gives me a good balance of safety and risk.

If you are in profits from some of the short term narratives like Chiliz/fan tokens highlighted in our newsletter, remember to secure profits.

We are still in a bear market. Focus on accumulating Bitcoin and Ethereum, and wait for the opportunities to come. Personally I will keep waiting until Bitcoin Dominance reaches close to the 47% level before buying into Altcoin positions for long term holds.

If you want to buy or trade Bitcoin and Ethereum, consider using my Binance Affiliate Link


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Fed Hikes Interest Rates by 75 Bps

FOMC day November 2nd.

Hikes By 75Bps; Target Range Stands At 3.75% - 4.00%

Interest Rate On Reserves Balances Raised By 75Bps To 3.90% From 3.15%

Unanimous Fed Vote In Favour Of Policy - Prepared To Adjust Policy As Appropriate, 'Highly Attentive To Inflation Risks'

Ukraine War Creates Additional Upward Pressure On Inflation, Weighs On Global Economic Activity


Slow down sometime, Maybe 50bps in December

Terminal rate higher

Premature to even talk about pausing

Soft landing still possible but narrowing


Elon + Doge + Twitter

Elon Acquired Twitter on Friday, the 28th.

After buying out Twitter, Elon revealed his plans to build the "everything app", with Social Media, Payment, and a bunch of things rolled into one.

Elon Musk’s plan to turn Twitter into a super app is a step closer now that he owns the platform
After spending months trying to back out of the Twitter deal, Elon Musk said the Twitter acquisition would help to create X, an “everything app.”

He called this the X app, referring to the vision of X.com, his first company before it became PayPal.

People are speculating that DogeCoin could be merged into Twitter to complete this vision of an online peer-to-peer payments system.

While he hasn't said anything, DOGE has already rallied 140% this week.

Smart money has been buying $DOGE, as they believe Musk could use twitter as a platform to pump/promote DogeCoin.

Charles Hoskinson, founder of Cardano, thinks it’s possible for Doge and twitter to somehow merge.

But can this really be done?

Elon has been advising the Core Doge Devs since 2019, and joined the Doge Foundation over a year ago.

Elon has certainly been a top Doge proponent, as he has previously used the coin as a payment method, and even here he teases the use of it for Twitter.

In the past, Elon has proposed to use an exchange as a second layer to minimize DOGE transaction cost.

Layer-2 rollup solutions are also widely adopted on Ethereum and easy to implement.

TwitterX could have a wallet, exchange, and layer-2 all built in.

With 500 million users under his company and unlimited resources, this merge is only a matter of Elon's will.

Will he make the most entertaining outcome actually come true?

Reddit Avatars - NFT's Killer App?

Announcing Reddit's New Avatar Builder! : r/changelog

Reddit is the internet's largest forum platform, with over 430 million active monthly users, and 5th most visited website

The founders of Reddit have been vocal crypto advocates for some time now, with Reddit releasing 4 one of a kind Ethereum-based in June 2021, CryptoSnoos.

Polygon, Reddit Co-Founder's VC Firm Launch $200 Million Social Media Web3  Fund – Bitcoin News

In December 2021, Reddit formed a partnership with Polygon, and would use the sidechain to make Reddit’s “Generation 1 collectable avatars”.

These NFTs were generally loathed by Reddit, with Gen 1 avatars taking months to sell out.

Last week, Reddit’s Gen 2 avatars took 24 hours to sell out.

What changed?

Reddit branched away from web3 lingo, opting out of calling them NFTs, instead avatar collectables.

In fact, many fail to understand they have any involvement with a blockchain, as reddit has seamlessly integrated polygon wallets onto their platform.

Reddit didn't just copypasta other's ideas, they made a collection where any two NFTs can be combined into one, furthering user customization.

This has allowed Reddit to single-handedly onboard over 3 million new Polygon wallets, or less than 1% of Reddit’s community.

With the sheer size of Reddit, and how successful their NFT avatars have been, it would be fair to assume these could be a lucrative investment to accumulate, however, there is no hard cap on these NFTs and there are currently 86,000 Avatars.

The most popular strategy around CT has been focusing on collecting the first 2 generations, prioritizing rarity/traits.

Avatar Floor Website: https://www.redditfloor.com/

Opensea: https://opensea.io/category/reddit-collectible-avatars

Analytics: https://dune.com/polygon_analytics/reddit-collectible-avatars

All eyes on Arbitrum (Odyssey Reboot?)

There’s currently a lot of speculation around Arbitrum’s Odyssey coming back in the coming weeks.

The Arbitrum Odyssey
in collaboration with Ratwell & Project Galaxy

Arbitrum Odyssey was a 8 week community initiative that rewarded NFTs to users who complete a variety of tasks within the Arbitrum ecosystem.

Odyssey was paused due to a network congestion and put on hold until Arbitrum completed the Nitro upgrade. This upgrade has completed on August 31st, and Odyssey should resume soon.

Here are the previous weekly requirements:

Since Odyssey was canceled during week 1, there are week 1 NFTs that would likely qualify holders to an airdrop. You can buy the week 1 NFTs here:


While there is no official announcement about what the use of these NFTs will be for, many others and myself believe these will be used to verify which users qualify for an airdrop.

Arbitrum odyssey speculation is at an all time high, as airdrops have came in the spotlight, due to recent airdrops Blur and Aptos.

Arbitrum has also been dominating Ethereum's transactions, accounting for 62% of all Ethereum traffic this past week.

All eyes are on Arbitrum, Odyssey, and the eventual $ARBI airdrop.

Top Performing Cryptos of the Week

Mask Network

Mask Network is an infrastructure to connect Web3 features to social media like Twitter. Their browser extension directly integrates MetaMask with Twitter to allow Ethereum transactions and messaging in Twitter.

Binance launched a Bluebird Index, a new Twitter-themed cryptocurrency index that tracks the performance of BNB, DOGE and MASK.

Seems that Binance is investing heavily in the future of decentralized social media and Twitter, and MASK network is at the forefront of this narrative.

DogeCoin (and other meme coins)

People are speculating that DogeCoin could be merged into Twitter to complete this vision of an online peer-to-peer payments system.

While he hasn't said anything, DOGE has already rallied 140% this week.

Smart money has been buying $DOGE, as they believe Musk could use twitter as a platform to pump/promote DogeCoin.

Other elon/dog related meme coins like Shiba, dogelon, babydoge, and safemoon have all gained from this meme wave as well.


No news spotted other than a recent annoucement of Helix, a DEX built on the Injective Layer-1 for cross-chain trading.

Hints of high social activity picked up by LunarCrush as well, maybe some news coming up


With world cup hype starting to pick up, more people are paying attention to Chiliz as the premiere platform for issuing football fan tokens.

Mina Protocol

Mina is a ZK/Privacy focused layer-1, and they have been delivering a slew of updates this year. The upcoming bridge to EVM chains, ZK Oracles, and other infrastructure upgrades could have contributed to this rally.

Personally I remain cautious on Privacy focused usecases of ZK technology, as they are under heavy pressure from regulation.

For the upcoming "ZK" hype wave, focus on scaling solutions utilizing zk, such as zk-rollups and zk-starks, instead of privacy projects.


Klaytn announced a buyback and burn program which directly and indirectly started a recent rally.

Klaytn Foundation | Klaytn Foundation Buyback Announcement
The 3Q Klaytn ecosystem updates will cover key initiatives the Klaytn team is currently undertaking in our continued efforts to achieve an optimal and sustainable Klaytn ecosystem.

More research on the buyback program and price action. Exercise caution as this announcement was coupled with a partnershi with Alameda as their Market Maker, and FTX has listed $KLAY Perpetual futures on the same day.

Definitely more active market making coming. How the overall buyback program will attribute to price and when they will stop, nobody knows.

Upcoming Events to Watch

  • November 3: ZRX expo and announcements
  • November 3-5: Elrond EGLD X Conference (and announcements?)
  • November 4: Solana Breakpoint Conference (and announcements?)
  • November 4: Filecoin Virtual Machine + Metamask integration
  • November 21: FIFA World Cup (Algorand, Chiliz, Football Fan Tokens)
  • December 1: Theta Network Metachain launch
  • December 31: EOS Trust EVM Launch
  • December 31: Chiliz Mainnet 2.0 Launch
  • 2022: Arbitrum $ARBI Token Launch
  • 2022: StarkNet $STARK Token Launch
  • 2022: zkSync Token Launch
  • 2022: Sui Network Mainnet Launch
  • 2022: Curve Finance Stablecoin Launch
  • 2022: DogeCoin Twitter Integration?
  • 2022: BitMex $BMEX Token Launch


That’s it for this week's newsletter.

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