It's Happening #93
Market Meditations | February 8, 2021
Bitcoin, Altcoins and ATHs
What’s your perfect day? Ours is probably when the price of bitcoin smashes new all time highs ???
Such as today, when our community discovered that Elon Musk’s firm Tesla added $1.5 billion worth of bitcoin to the company’s balance sheet.
We trust you have all had your celebrations ? Now, let’s contemplate what this means from both a fundamental and technical viewpoint ?
Read, enjoy and share with your network. Let’s all grow richer together.
Delighted to say this article is brought to you by FTX?, they were one of the few exchanges that managed to stay up during today’s heavy volume! You can use my ? link to get a discount on all your trading.
Tesla Invests $1.5B in Bitcoin and Plans to Accept Crypto Payments ?
Today, the electric vehicle maker said in an annual report filed with the U.S. Securities and Exchange Commission that it has put an aggregate $1.5 billion into bitcoin under a new investment policy and that the company may acquire and hold digital assets from time to time or long term. Bitcoin’s price shot up more than 14% after Tesla’s disclosure to a new all-time high of $44,801, based on CoinDesk’s Bitcoin Price Index. The jump pushed bitcoin’s year-to-date return to about 50%, versus 3.9% for the Standard & Poor’s Index of large U.S. stocks. Read more.
Castle Island Ventures Announces New $50 Million Venture Fund ?
Cryptocurrency and blockchain venture capital firm Castle Island Ventures announces the launch of its second venture fund. The Boston-based firm, which has invested in the likes of BlockFi and River Financial, told The Block that the $50 million fund would take on a broader thesis than its first fund, which mainly identified companies building infrastructure around bitcoin. CIV II will have an added focus on firms building in decentralized finance and stablecoins. Read more.
Bill Miller Plans $400m Bitcoin Investment via GBTC ?
According to a Friday filing with the United States Securities and Exchange Commission, The Miller Opportunity Trust is seeking indirect exposure to BTC via the Grayscale Bitcoin Trust. If the GBTC shares acquisition does pull through, it will mark a significant departure from the usual investments in equities and derivatives for the $2.25 billion fund. Indeed, the trust’s website lists airlines, healthcare and financials among its core investment position focus. Read more.
New Bridge Connects Avalanche & Ethereum For DeFi Transfers ?
A group of developers has set up a new bridging mechanism between the Avalanche and Ethereum that will allow users of DeFi tools to transfer their assets between the two ecosystems. It means that developers of DeFi projects on Ethereum will be able to offer users an alternative platform on which to transact. Part of the appeal of Avalanche as a blockchain is its fast transaction times – less than a second – and low fees. Avalanche went live on mainnet last September, as previously reported. The project has raised some $60 million to date through a mix of token sales and venture funding. Read more.
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Tesla Announces $1.5 Billion Bitcoin Purchase And Pushes Bitcoin Towards New All-Time Highs
For today’s article, I take a look at Tesla’s announcement and explain what it means for bitcoin and the crypto industry. Later, we take a look at today’s price action before and after the announcement ?
Tesla, the world’s most valuable car company valued at around $800 billion announced earlier today they had purchased $1.5 billion worth of bitcoin.
There is bullish news and then there’s bullish news.
Today’s headline is a top tier one and is yet another validation for our nascent industry.
Elon Musk’s tweet ‘in retrospect, it was inevitable’ now reads differently with confirmation of Tesla’s entry in the crypto industry. Unsurprisingly, bitcoin reacted positively and instantly jumped up +10%, breaking above its forming all-time high around $42,000.
Tesla’s purchase of bitcoin does not come totally unexpected, after Elon’s positive comments last week and his Twitter bio change to ‘#Bitcoin’, which he deleted a few days later.
✅ While the market rejected the news last week, we now have a clean new all-time high which indicates that prices will continue to move significantly higher before we see the next big pullback.
To stay on top of the latest crypto market news and analysis, follow ?Market Meditations Twitter ?
With Tesla’s news, it may be that other companies will follow their footsteps over the next few months and years. In 2017, retail FOMO was responsible for creating a crypto bubble. Will institutional FOMO drive the rest of this cycle’s price action?
Tesla’s purchase wasn’t the only big news to celebrate.
Although investing approximately 10% of their cash reserves in bitcoin is a very significant move and vote of confidence by the 7th largest company in the world, Tesla also confirmed they will be accepting payments in bitcoin on a limited basis.
Bitcoin critics often comment that the currency is not a medium of exchange because nobody accepts it. This is slowly becoming old news now that first Paypal and now even Tesla will accept payments in the most popular cryptocurrency.
For more on protecting your capital, check out our ? Essential Crypto Security Guide ?
Bitcoin In Price Discovery
I touched on the importance of breaking $34,000-34500 multiple times last week.
In that area, there was a confluence of both horizontal and diagonal resistance and a break above meant the first higher high since bitcoin started its correction after hitting $42k.
The significance of that level is clearly visible on the chart and once it was broken, bitcoin resumed its uptrend.
Check out my ? TradingView Tutorial ? where I explain my setup.
Prices saw a slight pullback today before the Tesla news became public, which instantly sent bitcoin’s price to a new all-time high.
If the day closes above $42k, continuation to the upside is to be expected over the next couple of days/weeks. Losing $40k support/0.382 level will invalidate the current move.
With no historic price data to look at, looking for potential resistance is mostly guesswork.
? The first significant level to watch will likely be $50k, which is both a psychological resistance level and a fib extension.
What About The Rest of The Market?
A rising tide lifts all boats ⛵️
Although alt/btc pairs might get hurt slightly if bitcoin continues to trend, alt/usd pairs should be able to benefit from a rising bitcoin in this climate.
The implications of Tesla validating bitcoin should not be underestimated and likely speaks to their enormous, worldwide community.
On top of that, TSLA stock has been a long-time favorite of the Reddit community /r/wallstreetbets. It is not unthinkable that some of that attention might spill over to the altcoin market in the coming weeks and months.
We’ll likely see the next significant push upwards for altcoins once bitcoin finds its new local top.
And that’s a wrap. To sum it all up… The fundamentals are positive. Bitcoin’s adoption by Tesla will likely permeate the institutional air and see further adoption. From a technical standpoint, as long as bitcoin trends, it’s generally a good idea to have a strong position in bitcoin while being conservative with altcoin exposure in your portfolio. Once bitcoin cools off, another window for altcoins to outperform significantly will likely present itself again and a heavier altcoin position makes more sense.
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 February
CME Ethereum Futures Launch ?
At long last, Ethereum Futures are now trading on CME. Bears and bulls alike will have more opportunities to place positions on ethereum now. In particular, this venue is likely to be popular amongst institutional investors.
Tuesday, 9th February
Market Meditations Podcast Release ?
Jimie: Master Trading Psychology with Neuro-Linguistic Programming. Jimie (@Your_NLP_Coach) is a certified Neuro-Linguistic Programming coach that specializes in developing traders.
Impeachment Trial ?
Senate’s impeachment trial against former President Trump over allegations he incited the violent mob that attacked the US Capitol Building.
Wednesday, 10th February
Robonomics Winter School 2021 Opening Ceremony ?
A chance for anyone who wants to learn more about building Dapps, operating blockchain technologies and coding to hear from smart contract developers and software architects and meet like-minded people. You may register to attend the free opening ceremony ? here.
Thursday, 11th February
Market Meditations Podcast Release ?
DeFi Dad: Earning Passive Income from DeFi. DeFi Dad (@DeFi_Dad) is a DeFI super-user who provides education on bankless money apps on the Ethereum blockchain and currently acts as the Chief DeFi Officer for Zapper.fi
Friday, 12th February
Chinese New Year ?
Chinese New Year falls on Friday this year. And it is the year of The Ox. Here’s a ? quiz to find out your Chinese Zodiac Sign.
Sunday, 14th February
Valentine’s Day ❤️
QAID Airdrop ?
Can you think of a Valentine’s gift better than an Airdrop? The Qiswap team has announced that it will ? airdrop for $QTUM holders.
This is a special thank you to my team for their research and contributors, they make this Newsletter possible. Today we have guest contributor ? Thijs Janssen (Cryptocurrency Expert) help extensively with our main article.
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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.