Market Meditations | March 8, 2021
Today we breakdown breakouts and how to trade them.
Bitcoin has claimed $50k and Ethereum is soaring off the back of strong fundamentals ? Now, we love a price rally as much as the next bull but instead of dancing around in our rooms with the Market Meditations podcast ? full blast in the background, perhaps it would help us pump our bags if we:
Understood what caused these rallies.
Discovered how we can use this information to predict future ones.
For we all know that those who are able to predict a breaking point are rewarded much better than those who simply follow the trend. ? Read, enjoy and share with your network. Let’s all build wealth together.
Crypto. A nice green weekend. Bitcoin jumped from roughly $49k to $51.8k on Sunday as the U.S. Senate approved Biden’s $1.9 trillion stimulus plan. More on this later ?We have seen some of those gains fade today but we stand united above $50k, a key psychological level. Ethereum is also fighting the good fight: with gains of +22% on the week at press time, likely aided by news that developers are planning to destroy some supply. In other notable developments, Taco Bell just sold its first batch of Taco-themed digital collectibles.
Legacy. Over in the land before crypto, tech stocks continue to lag behind as investors question high valuations. Goldman Sachs continues to see substantial crypto demand and the attack on Microsoft’s business email software is becoming a global cyber-security crisis.
Delighted to say this article is brought to you by FTX?, you can use my link to get a discount. We also have a comprehensive ? FTX tutorial ? which includes: a step by step on how to open an account, deposit and withdraw funds, place a buy or sell order and a stop loss. ? We will be funding 2 FTX trading accounts a month with $500 dollars and you’ll get a coaching call with Koroush to start your journey. To participate, join our ? Telegram ? .
So. Let’s start with: what happened on the weekend, why it impacted bitcoin and (leaving the best until last) how we can use this to profit in the future.
On Saturday, 06 March, the Senate passed what could be a light in the tunnel ?for many struggling Americans: a $1.9 trillion Covid relief bill ?. The legislation would send $300 in weekly unemployment benefits, include $1400 stimulus checks for Americans, and provide states resources to distribute vaccines rapidly ⛑️
Why Did This Impact Bitcoin:
We’ve spoken about narrative investing ? before. The concept that trading coins with strong catalysts can increase profit (check out our ? video ? and ?article ?to learn more). The narrative of “stimulus” has been a strong bullish narrative for crypto markets throughout 2020/2021 so this was one likely contributor to the price rally.
(Speaking of narratives, Ethereum has a strong catalyst with the news of the EIP-1559 upgrade. Make sure to subscribe ✅ to the newsletter for a full update on Wednesday!)
Now, back to Bitcoin: In order to provide stimulus, the government must print more money. The stimulus, whilst providing short term economic relief, will likely cause massive inflation ⬆️. As a response, we’ve seen investors run to inflation hedge assets with a large number choosing Bitcoin as their safe haven. We elaborate in our YouTube ? video ?
How Can We Use This to Profit in the Future:
1️⃣Keeping an Eye on Global Events Pays Off
It’s no secret that we love technical analysis but a small appreciation for global events can go a long way. The price of Bitcoin quickly rose $500 off the back of the legislation news. ?If your technical analysis led you to an open short position, awareness of the event may have led you to cover some and alternatively, if you were looking to go long and understood the narrative of stimulus packages you could have favoured buying dips for continuation to the upside. For more on this, check out a recent interview I did where I talk about spotting trends ?
2️⃣Be Aware of Correlated Markets
Whether crypto markets are correlated with legacy market and precious metals, or inversely correlated to the DXY, it’s worth taking a look at the macroeconomic backdrop to understand whether markets are risk-off ? or risk-on ✅ because it could change your trading plan ?
In risk-off environments, you may prioritize preserving capital ?, growing your account with quick scalps, and reducing your leverage ⬇️in case of a market correction. Check out my FREE Leverage Trading ? course and Risk Management ?course to learn more ??️
In risk-on environments, you might put on swing trades, utilize wider stop losses and prioritize building longer term positions, with your main priority to ride the bullish trend ?
3️⃣Meet Your New Competition
You might hate legacy markets. You might be a ride or die kinda crypto guy. However, like it or not, legacy markets are involved. When bullish (or bearish) news breaks, responsible traders ask themselves❓who is on the other side of their trade. What would incentivize that party to close their position? We know institutions have been buying Bitcoin as an inflation hedge. With more stimulus and money printing, it would stand to reason that they would not close their position, which is bullish for Bitcoin traders and investors ?
As a trader, would you rather buy dips along with the big money or short ?against them? Being aware of what big money is doing can help you form a well-informed trading plan. Check out this ?podcast ? where I sit down with Ki Young Ju to answer the question, how do you know what big money is doing? ?
The game is different. If you’re in this for the serious returns, it’s time to level up and understand the factors that are contributing to the bull run. Identifying breaking points is an art but it is also a marathon rather than a race. If you were able to pick up a few lessons from this article, you’re off to a good start.
Now, we have one question for you as you read the next section: fancy a trip to a virtual crypto casino?
? If you’re serious about levelling up your trading and investing, consider joining our community and gaining access to the full range of insights and analysis ?
TWEET OF THE DAY
CRYPTO NEWS & ANALYSIS
Crypto Casino in Ethereum-Based Virtual World?
Atari, the company that led the gaming market between 1975 and 1988 with experiences like Pacman, Asteroids, and Pong, has decided to make a comeback by creating a cryptocurrency casino ? on the Ethereum blockchain. They plan to partner with Decenral Games, the first community-owned, Metaverse casino ?.
Atari plans to create this casino in “Vegas City,” a gaming district from the Ethereum-based Decentraland’s metaverse ?. In a crypto casino, you use crypto rather than fiat to place bets and withdraw winnings ?. For example, players in the casino will be able to earn Decentral Games’ native token and play with MANA, DAI, and other Atari tokens. By using the blockchain, participants can preserve their privacy ?and be certain that games are not rigged ?
We know that when more people use a network, that network increases in value. Understanding that Atari is building on the Ethereum network, then, is bullish for Ethereum traders and investors. If you’re looking to build a longer-term portfolio ?, this news in combination with TA, your risk tolerance and personal financial goals, can help you decide whether to include Ethereum in your strategy ? Something to learn from this news is that keeping an eye ?on projects you believe in and the blockchains they are building on can help you stay well-informed ? which in turn improves your trading.
Atari itself stated that they expect to take bets worth $400 million in cryptocurrency over the next two years, which means more widespread adoption of blockchain technology. This is bullish for crypto investors since it means a new wave of people ? who have never had experience with crypto will begin experimenting with digital assets. With adoption comes more market participants and demand which over time leads to higher prices ⬆️
You won’t have much to bet if you don’t have any money though… let’s take a look at the concept of budgeting and why most budgets fail ?
PayPal announced today that it has agreed to acquire Curv, a provider of cloud-based infrastructure for digital asset security ? According to sources, how much is Curv being sold for? Answer found further in the article ?
Why Most Budgets Fail
Having a budget and sticking to it is an essential part of your financial health. It dictates how much money you spend on living expenses ? and how much is left over for investing and building up your trading portfolio.?However, most budgets fail. Meaning those funds don’t find their way into your preferred trading platform.
This is because people:
Don’t understand their spending habits.? Look over your historic bank transactions. See what you actually are spending money on and budget accordingly.
Don’t have clear goals. Take the time to formulate your financial goals.Deliberately budget to achieve these and it will be psychologically easier to maintain.
Manually enact their budget. Automate your processes?so that funds are automatically placed in the correct place. Whether this be your saving account or investment platform.
Are not realistic. Having unrealistic expectations will only lead to disappointment and abandonment of your budget.
Do not keep it up to date.? Our spending habits and our incomes are constantly shifting. Make sure that your budget reflects your current position in life.
If you avoid these pitfalls you will be able to maximise your financial success. Whatever your current situation, ensure you build up the required capital to become successful investors and traders. For more personal finance tips check out our podcast ? 8 Tips to Achieve Financial Freedom
Ok so it was kind of a trick question. News outlet Calcalist reports that Curv is being sold for between $200 million and $300 million and according to Coindesk, it is $500 million. By way of apology, allow us to explain that the price of sale is not the fundamental point here. PayPal is using the new purchase to “accelerate and expand its initiatives to support cryptocurrencies and digital assets”. One of the bears’ favourite limitations or drawbacks of cryptocurrency is that it is not a medium of exchange. In other words, it is not universally accepted as a means of payments. Whilst a PayPal acquisition does not translate to universal adoption, the support of a payments giant is certainly a leap in the right direction.
SCAN THE WEEK
On Mondays, our ‘Scan The Week’ section is designed to show our community what events and headlines we will be keeping an eye on.
Monday, 8th March
wSTRAX Uniswap & Sushi listing ✅
Stratis is a powerful and flexible Blockchain Development Platform designed for the needs of real world enterprise and financial services. There will be 300k USD added as liquidity for wSTRAX on UNISWAP at launch on 08 March.
International Women’s Day ?
A day to commemorate the cultural, political and socio-economic achievements of women. We have a great bunch of women in the crypto space. Check out: LayahHeilpern, CryptoWendyO, Dentoshi, Thecryptomist, CamiRusso, CaitlinLong_, riabhutoria, KMSmithDC, HesterPeirce, DenelleDixon, dawnsongtweets, laurashin, starkness, katie_haun, ljxie and CryptoFinally
Tuesday, 9th March
MM Podcast Release #52: Crypto Gems, Networking and Finding Happiness with CryptoMessiah ?
CryptoMessiah is a veteran crypto investor who has now been active in the space for over 7 years. He has built several successful communities, identified multiple successful projects and is currently working with Hxro.
Wednesday, 10th March
International Conference on Blockchain for Industry ?
World Academy of Science, Engineering and Technology conference that aims to bring together leading academic scientists and scholars to exchange and share their experiences and research results on all aspects of Blockchain for Industry. If you’re interested in submitting work you’ve done you can do so here.
Friday, 12th March
Hedera Hashgraph (HBAR) Mainnet Upgrade ?
Hedera will be upgrading Mainnet to v0.12.0 on Friday, March 12th 2021 at 18:00 UTC. If you’d like to review the release notes, you can do so here.
QUAD Summit ??
Step aside Avengers. The United States, Japan, Australia and India plan to hold the first meeting of their leaders this week under the so-called Quad framework, in a show of geopolitical power against China’s growing influence.
Some of the links we’ve included are affiliate, they give you rewards and discounts and earn us a commission. Disclaimer: The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision.