Curve Hits $1 Billion in Total Value Locked and Goldman Boosts S&P 500 Target by 20% – Market Meditations #2
Market Meditations | August 17, 2020
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Scan the Week
$12,000 Resistance Breaks!
Chainlink Stalls at $20
A Closer Look at Ethereum
Curve Becomes Third Defi Protocol to Hit $1 Billion in Total Value Locked
Binance Saw the Highest Web Traffic Among Other Crypto Exchanges in July
Bitcoins Are Being Tokenized Faster Than They’re Mined as Defi Craze Continues
Joe Biden’s $2tn Climate Change Pledge
Goldman Boosts S&P 500 Target by 20% as Strategists Catch Up
Oil Rises on China Plan to Boost U.S. Imports, OPEC+ Compliance
Stimulus, Response and the Freedom to Choose
Scan the Week
Aug 18th: NMR Coinbase listing
Aug 18th: ENQ Mainnet Launch
Aug 19th: OLT Roadmap Reveal
Aug 21st: OCEAN Token Swap
Aug 19th: UK Inflation
Aug 20th: FOMC Minutes
Aug 21st: Global Flash PMIs
Primary focus on Chainlink and Ethereum this week. Both present us with similar structures, while still bullish the latest leg up has lacked conviction. I plan to keep a close eye on breaks of key structural levels.
As always when trading altcoins we must keep a close eye on Bitcoin, today’s break of the $12,000 level implies continuation and could provide us with solid entries across the altcoin market.
$12,000 Resistance Breaks! BITCOIN / DOLLAR
$12,000 – Key Support. Recently broken resistance that will now act as support
$13,000 – Key Resistance. Claiming this level is a significant strengthening of a bullish bias
Chainlink Stalls at $20 CHAINLINK / DOLLAR
$18.7 – Key Structural Level. While this holds there is a strong probability of the uptrend continuing
$17.4 – Key Support. The first area we expect the price to bounce should the structure start to break
16.49 – Danger Zone. Below this level, we need to reconsider the trend, bearish arguments will start to hold more weight than bullish ones
A Closer Look at Ethereum ETHEREUM / DOLLAR
$421.58 – Key Structural Level. While this holds there is a strong probability of the uptrend continuing
$401.31 – Key Support. The first area we expect the price to bounce should the structure start to break
$372.08 – Danger Zone. Below this level, we need to reconsider the trend, bearish arguments will start to hold more weight than bullish ones
Curve Becomes Third Defi Protocol to Hit $1 Billion in Total Value Locked. The DeFi theme shows no signs of slowing down yet. After Maker and Aave, Curve, a decentralized exchange for stablecoins, has become the third DeFi protocol to reach $1 billion in total value locked (TVL). TVL across all DeFi protocols has now passed $6 billion, which shows the amazing growth of the sector. In early June, TVL hit 1 billion for the first time. In July, numbers managed to climb above 2 billion and August looks to be the biggest month yet by far. Read more
Bitcoins Are Being Tokenized Faster Than They’re Mined as Defi Craze Continues. Although Twitter would argue otherwise, DeFi isn’t a bad thing for bitcoin. Bitcoins being locked up on the Ethereum chain is being used to argue that ETH is better than BTC, while all it does create yet another use case and demand for bitcoins. Since Sunday last week and due to DeFi’s popularity, more bitcoins are being tokenized than are actually being mined, which is 900 per day on average since the Bitcoin halvening earlier this year. Read more
Binance Saw the Highest Web Traffic Among Other Crypto Exchanges in July. Binance finished the month with 25 million visitors, followed by Coinbase and Bitmex with 22.5 million and 6.9 million visitors, respectively. With bitcoin and altcoin prices still increasing, we can expect higher numbers for August and probably the remainder of the year. Are exchanges ready to handle the traffic increase this time? Read more
Source: The Financial Times
Joe Biden’s $2tn Climate Change Pledge. Major environmental groups were delighted by Biden’s recent announcement of environmental pledges. Such pledges were unimaginable in US politics just a few years ago and demonstrate a drive toward sustainability. Biden has pledged to clean up electricity by 2035 and spend $2tn on clean energy as quickly as possible within 4 years. As investors continue to watch for and predict the impact of a Biden vs. Trump victory on the world economy, this is not a factor to overlook. The US consumes 1/6th of the world’s energy and consequently, the election in 2020 could have a big impact not only on how green the world becomes but also how commodities such as oil and natural gas trade. Read more
Goldman Boosts S&P 500 Target by 20% as Strategists Catch Up. Goldman Sachs Group Inc. is the latest firm to jump on the bandwagon and boost its year-end price target for the S&P 500. A relentless rally off the March lows leaves strategist predictions in the dust. David Kostin raised his forecast for the benchmark to 3,600 from 3,000. Yardeni Research founder Ed Yardeni and RBC Capital Markets’ Lori Calvasina have also upped their forecasts in recent weeks. It is true that the rally has caught many investors by surprise. The S&P 500 is currently sitting at 3,372.85 which is 51% off its March lows and on a trajectory to perhaps beat its February closing record. Kostin cited Goldman’s above-consensus US growth expectations as being linked to positive news on the vaccine front. Read more
Oil Rises on China Plan to Boost U.S. Imports, OPEC+ Compliance. Oil prices rose today as China’s plans to increase U.S. crude imports countered rising tensions between the two major currencies, and as sources said OPEC+ producers almost fully complied in July with their global production cut accord. Firmer stock markets and a weaker dollar were also lending support. Chinese state owned oil firms have tentatively booked tankers to transport at least 20 million barrels of U.S. crude for August and September. Brent crude LCOc1 rose 31 cents, or 0.7%, to $45.11 a barrel by 1357 GMT, and U.S. West Texas Intermediate crude CLc1 was up 44 cents, or 1%, to $42.45 a barrel. Read more
More Market Meditations
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On YouTube we will try something new this week, instead of the usual educational content we will dive into something more personal. Avoid common beginner mistakes and get a clear roadmap to becoming a profitable trade as I share the story of my first year of trading.
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We’re also delighted to announce that the Market Meditations Podcast will be launching this week! Get comfortable while we deconstruct incredible people from around the world to extract knowledge you can use to build a richer life. Newsletter subscribers will get early access to all episodes.
Stimulus, Response and the Freedom to Choose
“Between stimulus and response there is a space. In that space is our power to choose our response.”
Many will recognise this passage from Stephen Covey’s The 7 Habits of Highly Effective People. For anyone who isn’t a stranger to the ‘Self Help’ section of the bookstore, this book is a classic, offering a principle-centered approach for solving personal and professional problems.
The basic premise is that personality has 3 main parts:
1) The receptors -> the receiving portion that looks out on stimuli
2) The effectors -> the responding side that looks toward behaviour or response; and
3) That which lies between stimulus and response whose function is to correlate and adjust behaviour to stimulus.
The third region is where our real personal values lie. Mastery over the third region reflects our personal growth and ability to influence our behaviours. We must pause in this region between stimulus and response for as long as possible, to consider our options and respond accordingly.
Some would consider mental health as the capacity to be aware of the gap between stimulus and response and mastery of one’s own emotions as the awareness combined with the capacity to use this gap constructively. This capacity is inseparable from consciousness or self-awareness.