🧘♂️More Alpha, Less Problems #112
Market Meditations | March 5, 2021
Bitcoin, Ethereum, Tesla and Much More.
Today, we talk strategy ✅ Afterall, when the markets are ranging, we are presented with a fantastic opportunity to pause, think and increase our profits ?
Let’s take a walk through the markets: bitcoin, ethereum, tesla and more.
Read, enjoy and share with your network. Let’s all build wealth together.
Crypto. Zooming out, Bitcoin’s broader bias remains bullish, at least while historical support levels are intact. The crypto markets are not unknown to experience instability and we continue to see a healthy level of dip demand. More mature traders and investors will not be phased. Newer members of the community will have their conviction and discipline put to the test. Ethereum is also struggling against Bitcoin, with ethereum fees pulling back from their recent highs alongside a decline in DeFi transaction volumes. However, the rise of NFTs could push transaction costs back up.
Legacy. Busy day in the legacy markets, certainly for a Friday. A risk-off tone dominates the stock markets, with all eyes on Tesla’s falling share price (we’ll brief you on this later in the newsletter). Next up, oil prices have touched the highest levels in 14 months after OPEC+ agreed not to increase the supply in April, instead waiting for a more substantial recovery in demand. Finally, the greenback is strong off the back of Fed Chair Powell’s speech last night and today’s strong NFP (employment) data. Those who read our Monday Scan the Week section would have known all these events are coming!
Delighted to say this article is brought to you by FTX?, you can use my link to get a discount. Through the FTX Foundation, FTX, its affiliates, and its employees have donated over $10m ✅ to help save lives, prevent suffering, and ensure a brighter future.
? We will be funding 2 FTX trading accounts a month with $500 dollars and you’ll get a coaching call with Koroush to start your journey. To participate, join our ? Telegram ?
Where Money is Made
Let’s kick off with the elephant in the room: all things bitcoin ?
It’s easy to be passionate about crypto and the space when everything is going parabolic ? However that is seldom where the most money is made ? By way of example, with that attitude, you would have very quickly been shaken out of the 2018 bear market which has created numerous crypto millionaires today ?
?With the market ranging we are presented with the opportunity to plan and position ourselves for the next big move. We consider this a strong alternative to panic and hysteria.
BITCOIN / DOLLAR
$51,000 – Key Resistance
$44,000- Structural Level / Support
For the long term, my stance is similar to that which I expressed last week. I will continue to favor longs as long as we can hold $44,000 ?
? More advanced traders may look to trade this range or alternatively catch a breakout if/when $51,000 is claimed.
Remember that the macro market structure still maintains a clear formation of higher highs and lower lows. While I am cautious, I do not believe the 2021 bull market is over ? It is worthwhile to zoom out, and view short term volatility in the context of a longer term picture or narrative.
I say bitcoin, you say? Ethereum. Yes, let’s take a look after the tweet of the day ?
TWEET OF THE DAY
ALTCOIN NEWS & ANALYSIS
Ethereum Game Theory
? This section of today’s newsletter is made available to our premium community only.
A lot of people are understandably invested in Ethereum at the moment. The technicals have been promising and the fundamentals are strong with both the DeFi and NFT craze relying on it ? For more on NFTs, check out our recent ? video ? However we’ve seen a lot of difficulty in overcoming resistance at $2000. Here’s a common question:
“Will Ethereum break $2000 in 2021?”
My answer: does it matter? Allow me to explain ? Consider my analysis below ?
Without even breaking all time highs we are presented with multiple opportunities to make 30%-80% returns using our key supports at $1400 and $1000. These levels are relevant structurally and psychologically ?
Let’s look at some game theory vs Mr Market. If you have not yet been acquainted with Mr Market, check out our ? free newsletter: Protect Your Profits #94 ✏️
Scenario 1: Bull market continues and our Eth longs reach new highs ✅
Scenario 2: Bull market is over and we can exit these positions on the bounces ✅
Scenario 3: For the first time ever the bull market ends in a straight line down with no respect for any technical, structural or psychological levels ❌
We’re looking at big wins in scenario 1 and 2 so I plan on taking my chances. And you?
Next up: an XRP game and a tesla story ?
What is the size of the Ripple’s lawsuit with the SEC?
Keep reading for the answer ?
STOCK MARKET NEWS & ANALYSIS
Tesla to Dump Bitcoin?
In a recent tweet, Gary Black, former equities CIO of Goldman Sachs suggested Tesla should sell its Bitcoin and buy back company shares ? This has caused FUD amongst many traders and investors ?
The tweet comes against a backdrop of plummeting TSLA shares. Since news broke that Tesla had made a $1.5 billion bitcoin acquisition on Feb.8, the shares have fallen 28% ☔️ In a similar theme, MicroStrategy’s shares have fallen 50% from their all-time-high of $1,315 on Feb.9 ?
Black’s tweet caused a debate throughout twitter, which ? cointelegraph summarises.
It seems unlikely that either MicroStrategy or Tesla will dump in the short term. In fact, MicroStrategy purchased a further 205 bitcoins for $10m today; using this opportunity to buy the dip. It is likely that these companies’ investments were underpinned by a long term fundamental or narrative, such that they are not shaken by short term fluctuations ❌
What’s more, it seems short-sighted to assume that the decline in Tesla share price is solely attributed to their bitcoin purchase. It has been publicly reported that Tesla has been reprimanded by the Chinese government over quality controls issues after receiving consumer complaints. In addition to this, the border stock market has also been experiencing volatility ?
This all goes to show that a good trading strategy should not succumb to FUD during corrections or volatility. Pick your strategy, determine your levels and stick to your plan (including your pre-determined stop loss and take profit levels). For more on this, check out our ? Risk Management and ? Stop Loss guides ? Or check out what some of the best traders and investors in the world have to say about it, in our ?Market Wizards ? newsletter.
Now, you work hard to earn your profits, let’s dive into some personal finance, to make sure we make the most of our bags ?
$1.3 billion is your number. In a recent statement, Brad Garlinghouse, Ripple’s CEO, told Reuters that “it (the lawsuit) has hindered activity in the United States, but it has not really impacted what’s going on for us in East Asia”. He went on to say “XRP is traded on over 200 exchanges around the world. It’s really only three or four exchanges in the United States that have halted trading”.
Are You Making This Key Financial Mistake?❌
When you receive a raise, what do you do with the extra cash? Do you celebrate? ? Do you buy that new car? Do you start eating out more often??
If so you could be making one of the easiest but biggest financial mistakes possible: Lifestyle Creep.
Lifestyle creep is a phenomenon that occurs as your income rises. Things you previously considered luxuries, you now consider as necessities. You think you NEED that daily coffee or those designer brands.?
Whilst some lifestyle creep is ok, too much has the potential to completely derail your savings goals. If you consider an item a necessity you will consistently spend money on that item, even if you don’t need it.
To stop lifestyle creep in its tracks, try these tips: ✅
Have a financial plan and know exactly how any extra income is going to be spent
Treat yourself strategically. Earmark a specific amount of income for a “fun fund” and know that you can spend that without hampering your long term goals. ?
Challenge your mindset. Audit your everyday purchases and for each item consider, do I really need this and does this actually contribute to my happiness?
Be goal oriented. ? Whether your goal is financial freedom or saving for a deposit – be conscious that each time you let lifestyle creep occur, you are pushing yourself away from your final goal.
MARKET MEDITATIONS REWARDS
We are delighted to be launching our Market Meditations Referral Scheme. Start sharing, start earning rewards.
From $DOGE to free subscriptions, t-shirts and a day out in London with Koroush AK, we’ve got something for everyone.
Click on the button below to generate your unique referral code and start sharing Market Meditations to earn rewards.
? FREE Educational Resources:
? Join the AK Community:
? More Market Meditations:
Some of the links we’ve included are affiliate, they give you rewards and discounts and earn us a commission.
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.