Market Meditations | May 31, 2021
5 Unique insights to boost your wealth & health
Happy Monday and a warm welcome to the 500+ Meditators who joined us last week.
Admittedly, these are difficult times. Now, more than ever, the crypto community must pull together. Drawing on education, lessons and analysis to come back better and stronger than ever before. Sharing a range of insights today:
Bitcoin, Whales and Ray Dalio
BTC and ETH Technical Analysis
Arbitrum Layer 2 Launch
Improving Your Sleep: Part 1
Scan The Week
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Bitcoin, Whales and Ray Dalio
Bitcoin is on track for the second largest monthly percentage decline on record, despite bouncing from session lows in Asia. Similarly, Ether is on track to end May down 12%, the first monthly loss since September 2020. Contributing factors:
Behind the scenes:
According to blockchain analytics firm Glassnode:
The price crash was driven mainly by panic selling by new investors who bought coins during the first-quarter bull run.
Meanwhile, hodlers and institutional investors have been buying the dip in a sign of confidence in cryptocurrency’s long-term price prospects.
In fact, the supply held by so called ‘whales’ (cluster of addresses controlled by a single network participant holding at least 1,000 coins) has increased by over 25,000 BTC to 4.149 million since May 19.
Resources to learn more about On-Chain Analytics:
Long term market sentiment remains bullish, with the likes of Ray Dalio, founder of Bridgewater Associates, preferring to hold bitcoin over bonds in an inflationary environment. Short term we remain neutral and cautious, watching key levels as per our technical analysis below ?
No longer in a parabolic bull market. Market structure has shifted. Moving averages show crossover and downtrend.
$30k is a strong psychological support:
Hold this and we shouldn’t see any more major bearish price action.
Lose this, however, and the next real support isn’t until around $20k.
What’s likely happening next?
Either sideways consolidation (making short opportunities not the highest reward play)
Or bounce to retest the $45k level (this will mean passing the $40k resistance level)
If we see prices go up, we may see a test of $40k, break above, retest to around $45k. This would be a return to the mean that we have deviated from for a while. This makes long plays favourable to short plays despite the downtrend. We have tight invalidation around the $30k level.
The Ethereum trend is far more neutral. The most recent move has retraced as low as the 0.618 level.
Ethereum and the rest of the market may be a slave to what Bitcoin does next.
A long position from here does not seem favourable. Potential upside of around 20% but no clear invalidation.
Favouring Bitcoin plays over Ethereum.
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Arbitrum Layer 2 Launch
Offchain Labs has officially launched Arbitrum One, currently live on Ethereum in beta:
One of the biggest complaints from DeFi users is the high gas fees for using the Ethereum network.
The gas fees are high, in part, due to network congestion and lack of effective solutions that would enable the network to handle the volume of transactions smoothly.
This is where the concept of a Layer 2 solution, like Arbitrum One, comes into play.
A Layer 2 solution is simply a secondary protocol that’s built on an existing blockchain. The function of a layer 2 solution like Arbitrum is to help scale an application, in this case Ethereum applications, by handling transactions off the mainnet (also known as Layer 1). This is done through rollup technology, which is essentially a sidechain aggregation of transactions in a smart contract that will eventually settle to the mainchain. Arbitrum’s layer 2 scaling solution promises to improve the network’s transaction speed and throughput and claims to reduce infamous gas fees by up to 270 times.
So what could this mean for traders and investors?
One of the biggest narratives of 2021 is that of the Ethereum killer due to high gas fees and all in all an unpleasant experience relative to other platforms.
If Arbitrum successfully brings down gas fees, this could bring the attention back to Ethereum and the Ethereum Killer narrative could become less meaningful.
Conversely, if it fails then we could see the killer narrative become stronger.
Either way, our responsibility is not to predict what will happen, but create a plan for either scenario.
Improving Your Sleep: Part 1
We so often hear people say that they are feeling fatigued, struggling to concentrate and even depressed. Turns out these same people are neglecting one of the most powerful performance enhancers: sleep. Did you know sleep can:
Increase hormone health (reducing cortisol) and mimic a potent nootropic by improving memory, increasing creativity and motivation
Improve recovery of your central nervous system and help prevent injury (anti-inflammatory) and strengthens our immune system (reducing cortisol)
Increase muscle mass, strength, stamina and coordination
In this two part series we will share 12 tips to improve your sleep.
Keep Sleep Times Consistent. Try to sleep at the same time every night, give or take 1 hour.
Wake Up Without An Alarm Clock. Our bodies do not wake up randomly, sleep early in an unpolluted environment and wake up naturally without a stressful sound that will likely interrupt a sleep cycle. Typically, we need 7-9 hours of sleep.
Reduce Noise Pollution. Silence or white noise are optimal sounds to fall asleep to.
Reduce Light Pollution. Black out blinds are ideal and sleeping masks are a good secondary option. Create a dark environment at least 1.5 hours before bed.
Reduce Blue Light Exposure. Avoid artificial blue light emitted from screens at least 1.5 hours before bed. Blue light block glasses and flux are not perfect but better than nothing.
No caffeine. Ideally, eliminate caffeine entirely. If that isn’t an option, the next best play is making sure it’s not consumed within 10 hours of sleeping.
? Sharing the next 6 tips in Part 2 on Wednesday! If you want to improve your sleep and health, make sure you’re on our free email list ?
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, 31 May
NEXO Vote Proposal
One week from today on 7 June, every eligible NEXO Token holder will have the opportunity to vote for or against Nexo’s first Governance Vote proposal. The proposal asks the question of stakeholders whether they’d like to earn up to 12% p.a. interest on the NEXO Token daily or receive a once-a-year dividend. You can use our link to start earning now.
Tuesday, 1st June
MM Podcast Release #75 Psychology of Surviving Volatile Markets with Jimie ?
Jimie, also known as Your NLP Coach, is a certified Neuro-Linguistic Programming coach that specializes in developing trading psychology.
Wednesday, 2nd June
Global DeFi Investment Summit
The summit aims to bring awareness of the DeFi ecosystem to the international scene and connect blockchain & digital asset people from all over the world. Featuring speeches from Justin Sun, the Founder of Tron, and Stani Kulechov, founder of AAVE.
Thursday, 3rd June
Final Day of Crypto.Com App Exclusive Campaign
CTSI exclusive campaign: Crypto.com App users who trade CTSI within the period will have the chance to win a share of the prize pool. Campaign period: 07:00 20 May – 00:00 3 June 2021 UTC. Prize pool: USD 100,000 worth of CTSI. You can use our link to download the crypto.com app.
Friday, 4th June
Bitcoin 2021 Miami
Bitcoin 2021 will move the biggest Bitcoin event in history to Miami, targeting dates of June 4–5, with Jack Dorsey, Nick Szabo, Michael Saylor, Cynthia Lummis and Tony Hawk as headline speakers.
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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.