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Hello crypto fam,

This week: Michael Saylor's Bitcoin strategy shows signs of fatigue as MSTR stock underperforms despite aggressive BTC accumulation.

Solana's TVL continues to drop, yet bullish signs like Solana futures and MetaMask support hint at potential recovery if Bitcoin maintains upward momentum.

Bitcoin's current cycle lags past peaks, but analysts suggest there may still be room for a late-stage rally as BTC matures and volatility stabilizes.

Disclaimer: Nothing contained in this newsletter should be construed as investment advice

Market overview

Top 5 cryptocurrencies by market cap | Source: crypto.news

The total market capitalization of all cryptocurrencies stands at just over $3.06 trillion today, an increase of about 1% over the last 7 days. Over the same time period, Bitcoin rose 1% to $90,092 while the Ethereum price rose 0.5% to $2,225.

MSTR slumps as Saylor's BTC play shows signs of fatigue

Michael Saylor's Strategy may be losing some momentum, analysts at French blockchain firm Kaiko suggest.

While the firm has aggressively accumulated Bitcoin, nearly doubling its holdings since the U.S. election to over 220,000 BTC, the company's stock (MSTR) has underperformed, down nearly 15% year-to-date despite Bitcoin's flat performance, the analysts noted in a research report.

Strategy's Bitcoin holdings since January 2021 | Source: Kaiko

According to the analysts, declining trading volumes in MSTR might indicate waning enthusiasm for the company as a BTC proxy. They note that activity peaked in November when Bitcoin hit $100,000, allowing MicroStrategy to issue convertible bonds to fund further purchases. However, lower volumes and increased crypto volatility could dampen future demand for its debt issuances.

"Even gamblers in prediction markets have adjusted their outlook on MSTR. This subset of the market is typically more risk-positive, but they appeared to lose faith in Saylor's purchasing prowess in mid-February," the analysts note.

Solana's struggles continue as TVL declines, yet bullish signs emerge

Solana rose last Friday nearly 6%, buoyed by Bitcoin's recovery above $80,000.

However, its total value locked has dropped by $5.26 billion, nearly 50%, from its peak, indicating a decline in demand and relevance, our market analyst Ekta Mourya wrote in a research report.

Solana's TVL | Source: DefiLlama

Solana-based meme coins, once credited with driving SOL's gains, have struggled as traders become more cautious. Data from DefiLlama shows a drop in SOL's TVL from $12.191 billion to $6.939 billion, with the decline likely triggered due to the crash of meme coins like MELANIA and LIBRA, Mourya notes.

TVL across top Solana protocols fell by up to 40%, with factors like Bitcoin's flash crash and macroeconomic issues contributing to the decline.

While some Solana meme tokens showed slight recovery, many still faced huge losses, with over half experiencing double-digit declines in the past week.

Nevertheless, there still was some positive news. CME Group announced Solana futures, with MetaMask planning to support the network. Mourya says Solana's price recovery appears linked to Bitcoin's rally, and its correlation of 0.83 with Bitcoin suggests further upward momentum if Bitcoin continues its rise toward $100,000.

Bitcoin's current cycle lags past peaks, NYDIG says

Bitcoin's current bull run isn't as wild as past cycles. At least not yet.

According to NYDIG analysts, the market is 829 days into the bull cycle, and returns are way lower than what we saw in previous peaks. In their latest research note, the analysts say the lag could be because Bitcoin is getting bigger and more mature, which means its crazy price swings might be leveling out.

Still, history shows BTC tends to go parabolic late in the cycle, so there's still might be room for a surprise rally.

Bitcoin's cycle troughs to peaks | Source: NYDIG

The chart compares past cycles (2013, 2017, 2021) with today's. As of press time, Bitcoin is up about 5.3x from its low. That's pretty shy compared to 20.4x in 2021, 111.9x in 2017, and the insane 452.8x run in 2013. Each cycle has seen lower peak returns, reinforcing the idea that Bitcoin is settling into a steadier growth phase.

Still, NYDIG notes that past cycles saw major pumps toward the end, so it's too early to say this one won't do the same. Whether Bitcoin keeps grinding higher or takes off like before could depend on how the market plays out in the coming months.

"While we have already explored many of the market dynamics in the previous section, we point out that market technicians have noted that bitcoin has now made a 'double top' formation and would need to complete the pattern before becoming more constructive," the analysts say.