DeFi is Happening #77

Market Meditations | January 18, 2021

Bitcoin’s consolidation phase or ‘bull breather’ creates a window of opportunity that anyone can take advantage of

Dear Meditators

Happy Monday and for our friends in the U.S: Happy Martin Luther King Day ??

Bitcoin’s consolidation phase or ‘bull breather’ creates a window of opportunity that anyone can take advantage of ?

Let’s explore some of these trading and investing opportunities together today.

If you enjoy the insights, remember to share them with your network. Let’s all grow richer together.



We are extremely grateful for our partner ? Phemex. This collaboration makes our free content production possible ? 

As well as receiving free bitcoin and discounts for signing up, Phemex have recently launched Crypto Asset Management ? Their savings accounts allow you to earn crypto passive income and as Warren Buffet famously said, ‘you want to find ways to make money while you sleep’.


  • Ex Canadian Prime Minister Says Bitcoin Could Be a Reserve Currency ?
    According to Ex-Candian Prime Minister Stephen Harper, Bitcoin could serve a much greater purpose, as a part of a basket of reserve alternatives to the U.S. dollar. Industry leaders now view the flagship cryptocurrency as a hedge to inflation and a story of value. Harper also commented that central bank digital currencies (CBDCs) were ‘inevitable’ to some degree. Read more.

  • Chainlink Hits Record High ?
    Decentralised oracle network Chainlink’s LINK token and other prominent alternative cryptocurrencies (dubbed altcoins) are charting solid gains as the crypto market leader bitcoin takes a bull breather. LINK set a new record price of $23.68 overnight. The previous lifetime high of $19.90 was reached in August, according to Coindesk 20 data. Read more.

  • Gary Gensler Named As Joe Biden’s SEC Chair Pick ??
    Biden’s team recently revealed their pick of Gary Gensler for Chairman of the Securities and Exchange Commission. A welcome candidate, from the crypto world’s perspective. Gensler taught classes on blockchain and crypto at MIT. Having someone knowledgeable on the crypto and blockchain industry leading the SEC could pave the way for educated regulation and guidelines. Read more.

  • Ethereum Based Options Platform Charm Goes Live on Mainnet ?
    Ethereum based decentralised options platform Charm has gone live. The project uses an automatic market maker to create liquidity and lower users’ expenses. Since the platform is highly experimental, users should be prepared to lose all their assets, Charm’s developers stressed. Read more.


The Great Restructuring: Do DeFi Tokens Deserve A Spot in The Top-20 Altcoins?

For today’s article, we start by taking a look at bitcoin’s price action and why the current consolidation phase provides a window of opportunity for altcoin traders

Later, we take a look at SUSHI and AAVE and expand on why the market might be preferring them over the rest of the altcoins.


Thoughts on Bitcoin

Bitcoin went through its first real correction last week (since the breakout in October). 

Dropping ~27% from it’s all-time high at ~$42,000. 

Bitcoin is now trading within a consolidation pattern and it will likely take a while before we see the next big impulse move. 

Bitcoin cooling off has meant that altcoins have had some room to breathe, noticeable by the abundance of trading opportunities currently present in the market. 

As long as bitcoin consolidates, altcoins should be your main focus. 

It’s a window of opportunity that almost anybody can take advantage of with the right tools in your tool belt ?


Why DeFi?

https://twitter.com/zhusu/status/1338660368793567232


Although Zhu’s tweet was meant to be exaggerated a little bit, there’s some truth to it as well. 

In comparison to 2017 ICO tokens, the projects behind some of the most popular DeFi tokens have working products with a decent and growing cash flow to justify their valuations


Total value locked (TVL)
in DeFi protocols keeps making new highs every single week and is up 25x compared to this time last year, continuing its exponential growth with no signs of slowing down anytime soon. 


Due to the reflexive nature of those DeFi protocols, some token valuations have now become even more attractive as higher token prices lead to more volume, which in turn leads to more fees that accrue back to the token holders.

One thing to keep in mind though, this positive flywheeleffect currently acting as a strong tailwind is true to the downside as well

A significant decrease in volume if the market were to turn would very likely lead to significant downwards pressure on price. Know where we are in the cycle, don’t get left holding the bag.


AAVE and SUSHI Outperform

It seems that the market is maturing and ghost chains worth billions of dollars are severely underperforming up and coming DeFi projects. 

Within that DeFi ecosystem, there are two coins that have significantly outperformed the rest of the market over the last few weeks: SUSHI and AAVE


Crypto trader Hsaka visualized this on a price performance chart shared on Twitter ?

Everything has gone up, but both SUSHI and AAVE were the better choices by far with both pairs almost going up parabolically the last few weeks. 

SUSHI / USD

SUSHI, saved from death after Chef Nomi returned the funds he stole from the dev fund, is now a flourishing ecosystem with new and innovative features being released at an incredible speed. 

It is now considered to be a DeFi blue chip and the only DEX meaningfully challenging Uniswap for the #1 spot. 

AAVE, previously known as ETHLend, has established itself as the market leader in lending and borrowing and currently has over $3 billion in assets locked up in the protocol. 

Although price is up more than 100x this year, analysts continue to believe the project might be undervalued when taking a look at the underlying fundamentals of the protocol. 

Conclusion

Bitcoin is experiencing what many traders deemed to have been an inevitable correction. During these conditions, we can explore other trading opportunities. Namely, Defi. Because one thing is certain: DeFi is here to stay.

Unlike some of the 2017 ICO coins, it is backed by strong fundamentals. These are only the first iterations of products that will take a while to attract mainstream attention and investors.  Keep an open mind at all times and never be afraid to question your beliefs. 

The upside is enormous, but many projects will fail in the process. Which is why, as always, and as is common practise amongst the greatest traders in the world: it is essential you maintain good trading discipline and ? risk management.


? There are always new trading opportunities like DeFi blue chips. If you’re serious about trading and investing, consider joining our free community and gaining access to the full range of insights and analysis ?


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, 18th January 

  • Martin Luther King Day ??
    The U.S. markets are closed today in honour of Dr. Martin Luther King Jr. The day is dedicated to celebrating his life and achievements: most notable are his campaigns to end racial equality in the United States. 

Tuesday, 19th January 

  • NEAR listing on Crypto.com (50% off) ✅
    NEAR will be listed on The Syndicate platform. All Crypto.com Coin (CRO) stakers will be able to participate in a discounted sale event for $250,000 USD worth of NEAR at 50% off. The Syndicate event will commence on Tuesday, 19 January 2021 on the Crypto.com Exchange lasting for 24 hours.

  • Market Meditations Podcast Release ?
    The Crypto Lark: Emerging Crypto Trends

Wednesday, 20th January 

  • Binance Coin (BNB) Burn ?
    The 14th burn of BNB happens this week, announced by CZ himself. 

Thursday, 21st January 

  • Market Meditations Podcast Release ?:
    Notsofast: Taking Profit on Bitcoin in 2021

Friday, 22nd January 

  • TomoChain (TOMO) Zorro Upgrade
    This release marks an important milestone and demonstrates the robust development underway on the TomoChain public blockchain. With this upgrade, a variety of important and exciting functionalities will be added to TomoChain Mainnet.’


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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. I am not a financial advisor. Every investment and trading move involves risk. Do your own research when making a decision. 


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