🧘‍♂️Altcoin Deep Dive

Market Meditations | March 19, 2021

Dear Meditators

The weekend starts here. With this newsletter ?

On Wednesday, we talked you through the fundamentals of Grayscale’s 5 new altcoin trust funds. Today, let’s take a look at the technicals ?

Because, technicals + fundamentals = you on the path to Building Wealth ?

✅ We’ll also dive into Ether, Compound Interest and a very special podcast on How to Invest in NFTs.

How can we improve your experience with Market Mediations? Share your feedback ? here


MARKET BRIEFING

  • Crypto. So far this week, bitcoin’s price has failed to make new all-time highs above $60k ⌛️ After the breakout above $58k, there was a pullback toward $53k mid-week. Such a move is normal as the bull market typically moves in waves ? That is, the market will find a new equilibrium of buyers and sellers, after which it will decide where to go next. In other news, billionaire hedge fund mogul Alan Howard has been revealed as a shareholder in CoinShares and Latin America’s first Bitcoin ETF receives approval in Brazil ?

  • Legacy. The S&P 500 and the Dow dropped today ? with banks leading the way after the U.S. Federal Reserve ?? said it would not extend a temporary capital buffer relief put in place to ease a pandemic-driven stress in the funding market ?


Delighted to say this article is brought to you by FTX ? Not sure how to start using FTX? Well, we have a comprehensive ? FTX tutorial ? for beginners. 

Did you know we’re funding 2 FTX trading accounts a month with $500 dollars?? You’ll even get a coaching call with Koroush ? to start your journey. To participate, simply join our ? Telegram


MARKET MEDITATION

Diving Deeper into Grayscale Coins

Grayscale Investments (the world’s largest digital asset manager) is digging into the world of DeFi, with 5 new trust offerings ? Today we’re going to perform a high time frame technical analysis on these coins.

Every crypto market analysis begins with a macro overview of Bitcoin. So, without further ado…

BITCOIN / DOLLAR

One Day

While Bitcoin has slowed down, it does maintain a bullish market structure and a strong uptrend ? The most important level remains psychological resistance at $60,000, coupled with the current structure we should see fireworks after claiming this level ?

? As always remember to consider invalidators ? key levels that invalidate current bias. ~$54,630 confluent with the 0.382 level is pivotal to maintain the current structure of the market.

Now on to our under-performing friend…


CHAINLINK / DOLLAR

One Day 

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?It’s profitable to look where others don’t and $LINK has been a laggard in 2021. Currently we’re presented with a neutral-bullish structure. Key resistance at $32 and a structural support at $28.39.

I have plenty of patience when it comes to chainlink ✅ The community is strong and the project is deeply embedded within crypto with over 400 company partnerships ?

Now, over to Filecoin ?


FILECOIN / DOLLAR

One Day

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Filecoin has been an exceptional performer gaining 200% over the last month ?

It’s too late now, it’s already pumped

When I bought DOT at $5, FTT at $3 and LINK at $3 people said the same thing. As traders our job isn’t to buy the bottom or sell the top, it’s to make money in between.

$70 and $60 present opportunities to enter ✅ albeit this is a high risk play with a large extension target past $100.

If you’re keen to learn more about how to trade trending altcoins, make sure to check out this video ?


ALTCOIN NEWS & ANALYSIS 

Ether Lottery Ticket 

When it comes to success in the markets, it is critical to assess market sentiment ? In other words, whether market participants are bullish (positive✅) or bearish (negative❌) on an asset. You then make your own assessment, determine the R:R and, if it seems worthwhile, you enter the market based on your viewpoint.

? There is no shortage of indicators or tools that try to determine market sentiment. From candlestick charts to momentum and oscillators. However, isn’t the best tool one that not everyone already uses or is aware of? Indeed it is, because it may give us signals that are not yet ‘priced’ into the market ?. Here is where we can look at ? options markets ?

This week, we saw a pair of wildly speculative Ether options trades on the over-the-counter institutional crypto trading network Paradigm ? A total of 1,644 call options contracts on Ether, with a strike price of $25k and an expiration date of Dec.31 ? Was that complete jargon for you? You have two choices: 

1️⃣Check out our Crypto Options trading guide to get up to speed
2️⃣Read the translation in plain English: whoever bought these contracts stands to profit if there is a serious Ether bull run by Dec. 31

The cost of buying these options was about $82k. And, if the position is held open until expiry and Ether is trading below $25k on Dec.31, the buyer gets nothing ? $82k down the drain ?

This purchase means that someone with deep pockets either thinks Ether will rise above $25k by the end of the year ? or that Ether’s price will push much higher in the coming months, such that the buyer can sell the contract in the market, for a profit ?

Now, analysis of two options trades is not enough to shape a trading strategy ❌ but, the process we have gone through together, should set you up with a new way to assess market sentiment. Keep an eye out for options bets and what they convey about the market’s expectations on the price trajectory of assets.


PERSONAL FINANCE

Harnessing the Power of Compound Interest

Albert Einstein ? once said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.

So what is compound interest and how can WE be the ones to earn it

Compound interest is the interest paid out on your principal investment AND on any interest already earned. Simply put, it is interest paid on your interest. ? To understand just how powerful this effect is, consider the below table. This shows how much an investor who saves $10,000 every year and receives a 7% APY will make over 30 years.

In the first 10 years, they invest $100,000 and receive a comfortable $38,000 in interest. ? By year 20 they have invested $200,000 however have earned $210,000 in interest – they have doubled their initial investment ?. By year 30 they have invested $300,000 however earned $644,000 in interest, over tripling their initial investment. ?

What’s more, this example assumes a 7% APY. By using ? our passive income guide you can start earning more than 10% APY on your stablecoins.

Compounding can also be applied to other areas of your life. When we learn about a topic we construct a mental framework. ? When we continually add knowledge to this framework, not only do we benefit from the knowledge itself, but our ability to gain knowledge also increases.

Now we understand the principals, let’s talk about how you can use the power of compounding to build wealth ?:

  1. Start saving as soon as possible.? In the above example only $38,000 of interest was earned in the first 10 years vs $435,000 in the last 10 years. It all comes down to time in the market. 

  2. Capital preservation is king. ? The true cost of losing a dollar is actually far higher than a dollar because you have lost the ability to earn compound interest.

  3. Commit to continuous improvement and be patient. ⌚ Over time, these improvements, in any area of your life, will compound beyond what you thought possible.

  4. Do not hold too much cash. ? Cash does not earn any interest and as such cannot grow exponentially. If you’re not sure how much is too much, or too little, check out our emergency fund guide. 

  5. Pay off your debt, starting with the highest interest rates. Just as savings increase exponentially, so does debt. The higher the interest rate, the more extreme this effect will be.

Apply these tips to your everyday life, harness the eighth wonder of the world and it will be you who earns it, not who pays it.


PODCAST

How to Invest in NFTs with Andrew Steinwold

CLICK HERE TO FOR EARLY ACCESS ?

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With the level of momentum NFTs have been picking up, we are absolutely delighted to provide our premium community with early access to this podcast. 

@AndrewSteinwold is the founder of the first ever NFT investment fund Sfermion. He also runs NFT newsletter and podcast, Zima Red

Who better to talk us through this exciting market and how we can best position ourselves as traders and investors. 

Key Takeaways:

  1. NFTs (non-fungible tokens) are unique digital assets that derive their value from scarcity. ?

  2. The current NFT space can be broken down into 5 different categories: collectibles, game assets, virtual land, crypto art and other. When creating a thesis, consider these distinct categories and the individual characteristics of each. ?

  3. Collectables derive their value from the narrative surrounding the asset. Do your research and understand key narratives in the space.

  4. Game assets ?️ derive value from their utility within their environment. Play the game, understand the best items and you will create a solid framework from which to invest.

  5. Virtual land ? can be valued similarly to physical land. Consider location, what is currently placed on the land and what can be built on it.

  6. Crypto art ?️ derives value from the reputation of the artist. Embed yourself in the space and create an understanding of the culture.

  7. Avoid investing in NFT’s purley for financial gain. This will ensure you remain happy if the price drops and increase your chance of success. By connecting emotionally with an item, you have proven the item is capable of creating that connection. ?

  8. Founders and their teams are the key to successful projects. Invest in teams that are obsessed with their product or the problem they are trying to solve and you will have more success than investing based solely on ideas. ?

  9. The NFT space is incredibly young and therefore has a high level of associated risk. Carefully consider any investments and do not invest any money you cannot afford to lose. ?

  10. Do not treat failures as mistakes.❌ Instead, use them as opportunities to learn and improve. ✅


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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.