Bitcoin Will Surge Again
Hopefully, people are now beginning to understand the current fragility of the Crypto market. This is not an isolated scenario, all markets are extremely fragile at the moment. It’s a risk-off environment, which means “Smart Money” is not looking to buy just yet. There may be a few nibbles but markets are not moved by nibbles. What we have seen and are likely to continue experiencing are modest pumps to the upside, which ultimately go nowhere. This will continue until markets receive a significant indication to change gears. A shift to a risk-on environment will ultimately trigger a resurgence in Crypto and stocks. Provided, there are no events similar to a China ban, I expect Crypto to skyrocket. The only problem is that this could take a lot longer than many have envisioned.
You Need To Get This!
A bottom does not necessarily imply the beginning of a bull market. It merely means that prices are not going to be heading lower. It does not suggest that prices will begin climbing. There is the chance that once a bottom is in the market continues to drag along. It may take some time to shake off the “caution” and shift into a risk-on environment. However, once it’s “risk-on”, things will begin to accelerate rather speedily. All things considered, you can’t realistically expect a risk-on environment with high inflation and high-interest rates. The shift takes place together with these dynamics. Until there is enough of an “adjustment”, the transition simply can’t take place.
Smart Money & Levels
Institutions and large players are always looking at the charts. There is never the aspect of “hope” but rather probable outcomes. This is why once certain levels are triggered they exit. I have addressed this before, most notably when we breached $30K and then $25K. Smart Money does not partake in risk outside of the technicals. Once a certain level is breached it becomes clear that the applicable asset is going to drop significantly further. Once again, to another measured target. What many fail to realize is that Smart Money is generally accurate for one simple and logical reason.
Regardless of whether a move is a good move or not, put enough volume behind it and it becomes accurate by default. Volume moves markets and this is how Smart Money continues to dominate. Large investors play within the rules that they know other traders worth their salt are respecting and then they operate with significant volume. It’s almost a done deal unless “retail” manages to muster up an army like in the case of WallStreetBets. However, even in such situations, the move is temporal. It’s merely a trade and not necessarily a change in the trend or direction of the market.
This is still very much a trader’s market. There have been a few very convincing pumps, even as I am writing BTC is pumping towards $21K after collapsing to $18.5K briefly. As I mentioned in my post from the 7th of September, a bounce is extremely likely at this point. It is however still just that a bounce, until proven otherwise. With an inverse head and shoulders now beginning to form on the S&P, it will be interesting to watch unfold. Until next time, keep your head in the game.
The Crypto space has garnered a significant amount of attention over the past couple of years. As a result, we have seen laws and regulations being implemented across the globe. What has been even more disturbing is the inconsistency. Laws being passed and then abandoned, only to be replaced by new and ever-changing policies have left many feeling uncertain. When your entire income is reliant upon Crypto, it becomes a problem. Those with full-time jobs are not too impressed by the constant state of change and uncertainty, but it’s not a deal breaker for them. Those reliant upon Crypto as a full-time income are in many cases forced to consider extreme alternatives.
A Tough Call
Unfortunately, sometimes the only option left is to relocate. If the level of taxation and regulation is unfavorable in terms of being able to earn a livable income, one might have to consider the difficult decision to leave “home”. Many are seeing this as an unavoidable next step. Laws and regulations are currently extremely staggered and inconsistent, no matter where you are in the world. Apart from a few locations that choose to look favorably upon the Crypto space, the majority are suffocating citizens via obdurate and sometimes, rather unnecessary laws and restrictions. I think the majority can understand reasonable regulation and taxation. However, moderation is not a term one can use to describe the approach of many governments around the world. There are however a few countries that seem to have handled the “challenge” fairly well, at least for now anyway.
A Thought To Consider
Not only are those who are being heavily restricted leaving, but also those who are now “Crypto Wealthy”. Many OGs are now not only wealthy but generating significant amounts of Crypto every month. If another country has zero Crypto taxation, it’s a bit of a no-brainer to relocate, isn’t it? Those with significant Crypto wealth will obviously seek to protect that wealth. The same can be said of those who are now being “marginalized” via regulations and taxation. They too will seek to protect the little that they have, as well. This is where certain countries are attracting “money”, while others are losing a significant portion of their tax base. It may not be that extreme at these stages, but consider how far this trend could actually extend if governments push “too hard”.
Everything comes down to balance. As I mentioned, the majority can understand and accept reasonable regulation and taxation. They might not necessarily embrace it, but they can understand the need for it. This is where balance plays a key role. Tip the scales too far in the favor of Uncle Sam and you stand the chance of losing more taxpayers, it’s that simple. One can speculate as to the reasons behind Musk’s move to Texas, but a tax cut is definitely one of them, in my opinion. Many praise Buffet and one of his key principles is to find legal ways to reduce your tax bill. If Cryptoneurs can match or better their lifestyles while simultaneously reducing their tax bill, what do you think they are going to do?
At the end of the day, the countries that embrace Crypto stand to benefit from what other countries are losing due to “overreach”. This makes logical sense, but when has greed ever been logical?
With all the negativity in the air regarding the macro environment, as well as a full-blown Crypto bear market, it’s good to think back on one’s own Crypto journey. I suppose for newcomers it can be a bit of a “sad story”. However, time spent in this market does tend to be rather rewarding over the long term. No matter how much money you throw at this market you can’t escape the dynamic of time. You can’t “buy your way” when it comes to time in the market. Even wealthy investors are beginning to realize this. Those with money often think that they can bypass certain hurdles, but not here! This is another aspect that I really enjoy about the Hive ecosystem. You may be able to invest truck loads in order to increase your HP, but you can’t buy your reputation rating. This is built over time by being active and engaged within the community. No system is perfect, but Hive appears to have one of the better-designed “economies”.
How Far We Have Come
When you consider the humble beginnings of Bitcoin, it is truly amazing to see all that has been built over the past 13 years. Not only in the Bitcoin world but Crypto as a whole. The sector has experienced tremendous growth and adoption in such a short time. Being a part of this “story” has been truly rewarding in so many ways. The financial reward has been staggering, but so have been all the achievements and victories along the way. Overcoming numerous bans and finding a place amongst institutional investors has been a tremendous victory, despite the negative consequences that are likely to follow. Unfortunately, if we are to see global adoption, we must sacrifice certain “ideals”. This will always be the case. The only ones who get to have their cake and eat it are government entities.
A Personal Reflection
Crypto has been my most financially rewarding endeavor. It has also been rewarding in so many other ways too. Being involved with something that began as an idea and is now changing the world is also extremely rewarding and encouraging. It’s almost a privilege to have been involved with Crypto during its formative years. Having gained a fair amount of knowledge and understanding over the years has also been something that I interpret as extremely valuable. Having the knowledge of how to create wealth is even more valuable than being wealthy. Many individuals attain wealth, only to later lose it. If you have the applicable knowledge, you can simply recreate your wealth, while those who lack this “understanding” are not so fortunate.
Considering all that I have endured and experienced in this market, I am convinced that it is still the best bet going forward. Momentary pain is inconsequential when I consider future prospects. Pain is also a tremendous opportunity for the brave of heart. Even though many abandon Crypto during these bearish seasons, I understand that it is a two-edged sword. Yes, my current Crypto holdings will incur temporal loss but newly acquired assets will also see tremendous upside in the years to come. The fact that BlackRock is now in the picture also brings a tremendous amount of confidence. Once certain “players” are in, there subsequently comes confidence and further reassurance of future prospects.
If you are battling to maintain a healthy outlook during these uncertain times, take a moment. Consider all that you have experienced, the tremendous gains over the years, as well as all that you have learned. Even if Crypto went to zero, all that I have experienced and gained has been worth it. It’s been an incredible journey this far, despite sometimes being in deep dark valleys. As with everything, this too shall pass! See you in the next one!
No Surprises Here
Many are surprised to see BTC below $19K again and yet for some of us, this is exactly what we have been expecting. This is probably a good time to begin “analyzing” the voices you are paying attention to. Personally, I have taken mental note of many who have been consistently incorrect in terms of their predictions and outlooks throughout this bear market. Despite many having “good intentions”, it doesn’t really count for much in the world of markets. Markets are binary in nature, meaning that the only thing that counts is being right. You make money being right and lose money being wrong. Provided, there are ways to hedge yourself, including designing strategies that can still be somewhat effective in the face of challenges. I am not quite sure how people were able to envision upside, considering the macro environment. For many, I think it’s simply a case of a lack of knowledge. Understanding how markets operate and the rules that govern them is imperative. One simply cannot enter the market void of this knowledge and understanding.
There Is Some Form Of Solace
The fact that pretty much all markets have corrected sharply is at least evidence that the “disconnect” amongst market participants is being kept in check by the market. When what is expected to transpire (according to the rules of the market) does not occur, we are all reduced to gamblers. Making informed investment decisions gives you an edge, as the majority avoid extensive research. Let’s go back approximately two weeks to see how the price action has performed in view of the expected outcome.
In the article, “The Week Ahead – What Are The Charts Saying?”, I suggested the levels that I was expecting, especially in regard to the S&P. The screenshot below is where the S&P was trading at the time of writing.
I expected the S&P to drop a lot lower even though it had already lost 2% on the day. Let’s have a look.
There might be a bit of a bounce here and there but I would think that by the end of the week. or even next week, we are likely to hit the 3900 level.
The S&P is currently trading at the 3900 level at the time of writing, as seen in the screenshot below.
As mentioned in the abovementioned article, this is a very important level. What transpires over the next few days will be extremely important in terms of deciding the short-term direction. Will the macro environment permit a bounce at this level? This would create the formation of the right shoulder of an inverse head and shoulders pattern, which is a bullish pattern. We will have to keep a close eye over the next day or two to hopefully gain further insights from the market.
Thanks for the visit and as always, this is not investment advice. Happy trading!
It’s Never Too Early
Planning your strategic approach to the next bull market is something that should begin now, while your emotions are safe. It’s actually the best time to begin considering how you are going to navigate your way through the next euphoric phase. It is extremely difficult to remain level-headed and objective when prices are skyrocketing. Unless you have a predefined plan, chances are you will not act. Yes, you can always adjust and reorganize your strategy prior to the actual bull run but you still require a “core plan”. Getting this in place now will allow you to enter the next bull run with a greater level of confidence, as well as a greater chance of success.
One of the most fundamental aspects of preparing for a bull market is distinguishing between the assets that you plan to offload and those you will hold indefinitely. Holding onto certain coins and tokens can be done for multiple reasons. Future income generation is one, as in the case of HIVE. Avoiding an extremely large tax bill can also be a strong motivation. Whatever the reason, once there is a clear distinction it becomes a lot more “clinical” and easier to execute at the appropriate time. Many become emotionally connected to their holdings, which can be a very disastrous move. Having a clear-cut, predefined plan of action is imperative.
When To Lock In Gains
I don’t think that one can make this decision based on price alone. What if your expected price target is not realized? That is unfortunately what happened to the majority in 2021. Many were expecting $100K, myself included. Had the China ban not been an incident, I believe that we would have actually surpassed $100K, to be honest. This was very well-timed, quite similar to the ban in 2017, I think it was. However, this was of a much greater magnitude. The fact that BTC surged back stronger to surpass the previous high of $65K was extremely bullish. Especially, as it bounced from an extremely low level of $29K. I did address this idea in an earlier post some months ago. Anyway, back to the matter at hand. A formula that incorporates price, timeframe, and technical analysis is the safest approach in my opinion. To simply isolate a single indicator or metric is not recommended.
Hedge Your Viewpoint
Even though I expected BTC to move higher, I began locking in profits during May of 2021. This was approximately 40% of my portfolio at the time. I then continued unpacking during the first half of 2022. In a similar way that I expect prices to move lower, I am hedging my own viewpoint by very modest allocation. A bear market is different from a bull market in that you cannot lose money by waiting too long. The only thing that you lose out on is potential gain. This means that you can adjust your “relativity ratio”. Preservation of capital is the core focus behind this idea. Solid risk management is extremely powerful and should supersede your desire of increasing your portfolio. If that doesn’t make sense to you, then you have a few painful lessons ahead. Those who understand this choose to position themselves uniquely, compared to the average Crypto investor.
A good plan will incorporate many of the aspects that I have just mentioned. However, there are many other ways to wisely position yourself for the road ahead. A worst-case scenario doesn’t necessarily need to unfold. However, what is important is, have you made provision for it?
“Always look for the positive in every situation”, is a mindset that I have always held to. However, in modern society, it seems as if human effort, intelligence, and the application of “knowledge” are becoming more and more scarce. This is actually a lot more saddening than many may realize. Technology is booming and advancing at an alarming rate while human intelligence and intellect appear to be on a significant decline. When the creator becomes inferior to the creation. I think that this is the tragedy that Albert Einstein predicted many years ago. When you strip down his statement, the above can be seen as the essence of what he predicted. Current “voices” have warned of the destructive power of AI. Humans are in essence submitting themselves to technology. What does this mean, and how will it affect us all?
An Inevitable Shift
Despite the risks, a shift to “systems” that are run and organized via the blockchain is the only way that we avoid a complete structural collapse. Given, that this would take some time to unwind, it is the eventual destination. Perhaps, you are sheltered from experiencing the absolute failure of systems being run and operated by people. People don’t want to work; if they do, the job is not done correctly. In many cases, it is not even done! Unacceptable breaks in communication, logistics, and basic outworkings are way too prevalent for a successfully run society and economy. DAOs and blockchain-based systems are able to eradicate a lot of human error that is currently so frustrating. “Necessity is the mother of invention”. The time is fast approaching when it will become necessary to implement systems and structures that actually work. Many have said that blockchain is a far superior way of getting “things done”. What they may perhaps have not considered is that it will eventually become a necessity.
Unless you are looking out for something, chances are you won’t find it. Being involved in Crypto has me constantly aware of the current failings and simultaneously aware of how blockchain could fix them. The term, “Bitcoin fixes this”, has been overplayed. However, there is still a lot of truth to it! Bitcoin and blockchain in general can remove a lot of friction and failure, given the opportunity. As blockchain-based systems are adopted and incorporated, the technology will eventually be seen as a superior and effective alternative. It’s inevitable! It might not necessarily play out as many envision, but I believe it will play out, one way or the other. This is where many of us are trying to position ourselves for an outcome that we believe is on the horizon. Many of us have also been expecting this for many years and continue to anticipate a “revolution” if you will.
Revolutions Are Part Of History
History paints a picture of significant change taking place in society, economies, and technology over time. These are commonly known as revolutions and are part and parcel of human development and advancement. It is quite clear to anyone who has stopped to ponder where we are in terms of change and improvement. We are standing at a precipice… change is no longer an option.
Passion Fuels Creativity
When you consider an avid gardener, you will immediately think of someone who is always planning. In a similar way that a passionate gardener will begin imagining a “solution” for every barren piece of ground, a passionate investor seeks out “opportunity”. A passionate investor is always on the lookout for new and viable opportunities. Not only that, but a motivated investor will seek to improve and enhance existing investment structures. It is this drive and vision that ultimately separates the average investor from the truly successful. It is always important to think in terms of percentage gains and not dollars or BTC. Not Everyone has access to wads of cash, but given the opportunity, many can generate impressive percentage returns over time.
The Perfect Foundation
If you are able to consistently produce great returns, in terms of percentage of invested capital, then wealth is the eventual outcome. This is how passionate and dedicated investors eventually generate wealth. Continued implementation of their strategies and dedication over time eventually yields more meaningful results. Once again, this is where compounding plays a vital role and will always be present in some way, shape, or form amongst passionate investors. When you are motivated to reach a goal, creativity takes on a life of its own. Multiple strategic plays, as well as compounding, are key in the creative process of great investment strategies.
Great Results Spark Determination
Once you begin to see results, further encouragement is triggered. This ultimately unlocks even more passion and dedication, and before you know it you are making significant progress. Enjoying the process is an imperative aspect of success. Not only in the Crypto world but in any aspect of life. Very few people are able to excel at something they don’t really enjoy. Being passionate about creating streams of income will enable you to push harder and further. It will fuel the tenacity required to succeed. There are many who stop and start along this journey. They want the results but simply lack the sheer passion and determination to see it through.
It’s always a great idea to comprise a visual representation of your income portfolio. This can be done as a spreadsheet and so easily monitored. Keeping track of how certain income streams are performing and experiencing growth can be a great motivation. An underperforming stream can also act as a motivation. It can signal the need to “get busy”, by revealing areas that require attention. No matter how passive an income stream may be, it will always require some attention, especially if you wish to see it increase over time. “Taking stock” is always a good exercise to bring things into perspective, while simultaneously providing a “health check”.
Develop a love and appreciation for investing and developing streams of income, and before you know it you will be viewing it as a beloved hobby or sport. It is also important to remember that not everyone enjoys this “side of life”. However, for those of you who do, be encouraged! This can be a truly rewarding journey that continues to yield fruit well into the future.
Authority Comes Down To One Thing
A lot of people view “authority” according to numbers. In particular, followers, likes, and general engagement. I however view an authoritative voice via the only true metric, accuracy. Being well-connected, ranked, and “worshipped” won’t bring accuracy to your voice. No matter where I go I find there is always a form of this dynamic. I can revisit many “influencers” posts from three to four months ago and be entertained by a constantly changing narrative. What this actually reveals to the more knowledgeable reader is that this is evidence of someone “following the market”. It’s actually become extremely amusing to watch so many adjust their stories to meet the market. Yes, I understand that as price action matures and events unfold, there is adjustment. However, a well-informed projection has factored in many of what is to be expected in a bearish phase. Long-term charting is also observed, and key levels of support and resistance over many years are also observed and respected. The macro environment is also factored into the thesis. As I have mentioned, this has been one of the largest points of failure among Crypto investors. Tremendous Ignorance exists in regard to “higher level” indicators that exist outside of Crypto.
Acknowledgment Is Not Authority
People seek acknowledgment and therefore give credit to fame instead of accuracy. I don’t expect this to ever change. That is why I have even personally admitted that I don’t ever envision an extensive reader base. I could list numerous points in the market where my calls were disregarded and later proven to be accurate. Perhaps in a bull market, it’s a little different, as my bias will be bullish. However, if I were to put out what people want to hear there would be little accuracy and it wouldn’t be beneficial. Sometimes you have to take on the responsibility others refuse to. After all, it’s easy to come out guns blazing with bullish “stories” originating from a silver-tongued charlatan. The machinations of many influencers are often undetected due to their “positive” viewpoint.
Is It Time?
Looking back on my own analysis reveals that I had expected a bottom to strike for Crypto in September to November. My initial target of $18K was fairly accurate. However, the price action and events that followed motivated me to consider that my possible worse-case target of $12K to $13K was now quite probable. Once again, this was met with much skepticism and possibly still is. Many are now bearish because they have finally been convinced but now you have to remember what I said earlier. There comes a point where you simply cannot promote a bullish thesis. What this then results in is many influencers becoming bearish and you have the same dynamic in reverse. Now there is the chance that many are overly bearish. It’s very difficult to begin making decisive moves regarding the start of a possible trend reversal due to the macro backdrop. There is so much I need to expound upon but a blog post simply won’t be able to do it justice. This is why one should never place too much weight on a single publication.
Anyone publishing analysis will be presenting a thesis over multiple publications and in order to accurately interpret the content, one needs to peruse earlier publications and gain a more comprehensive view. Confluence is always an essential aspect of effective trading. I believe we are entering a time that will be a good opportunity for accumulation. However, I am still awaiting further downside. The macro picture is very tricky at the moment and I am not yet convinced. I will keep readers updated. However, my viewpoints should never be considered investment advice. Thanks for the visit, see you next time!
A Strange Asset
Bitcoin is a rather unique asset, being extremely volatile in the short term and yet displaying amazing returns over the longer term. Traditional investors are unable to accurately class and explain Bitcoin, which leaves the asset being classed along with risk-on assets. This is the obvious but yet not so obvious issue. Being a unique asset, it cannot truly be aligned with or classed alongside any existing asset class. Bitcoin is unique and as such, ultimately needs to establish itself outside of existing molds. This is something that I have addressed before and believe to be a key progression in Bitcoin’s journey. Until such a time, I believe that BTC and the broader Crypto market will be “marginalized” by association with existing markets. This I find to be a bit of a concern, as it could take some time to actually unfold, if at all. It is the obvious “next move” for Bitcoin, but that does not necessarily imply that it will materialize. Obviously, we are all hoping that this takes place. However, the future is in no way guaranteed and we can only work with what we have.
The Essence Of Investing
This becomes a bit of an issue, as effective investing involves positioning yourself for the future. In Bitcoin’s case, a strong decoupling is imperative, if we wish to see the asset perform as it should. This causes concern if traditional markets remain suppressed and under pressure for an extended period of time. Many analysts believe that the stock market is likely to take years before regaining new highs. Bitcoin is likely to still appreciate due to other catalysts but it will definitely be weighed down by the broader market. However, breaking away in a real and meaningful way will be a game changer for the asset class. Bitcoin is not a tech stock, it’s actually not a risk-on asset, despite extreme short-term volatility. Perhaps, this is open to personal interpretation, but I view it as a fairly safe investment vehicle for the long-term investor.
This is something that is a bit frustrating for earlier adopters like me. An asset class that was originally unique is now lumped together with the very asset classes it was meant to supersede. Global adoption will obviously require this sort of shift, but only initially. After “acceptance” into the “gang”, Bitcoin can go on to establish a unique “identity”. Hopefully, this becomes the reality in time. Personally, I would consider it rather sad, if BTC never breaks away into its own unique class. It’s similar to a racehorse only being allowed to gallop around in an enclosed area. Bitcoin needs to be truly unleashed and this can only occur once a significant decoupling takes place.
An Ideal Shift
It would be great to see the Crypto market rallying while traditional markets tanked. A scenario where strong demand dictates due to unique and superior properties. This is how Bitcoin should be operating. Likewise, it can also edge lower while traditional markets appreciate. Bitcoin is unique, so why is it not classed as such?
Yet Another Opportunity
This might not necessarily be something that everyone would consider, but for those looking to monetize their unused bandwidth, there are a couple of opportunities out there worth considering. Many are open to the idea of setting up small passive income streams that can be used to accumulate Crypto over the long term. What is quite attractive about this particular idea is that these opportunities enable you to earn in dollars, while withdrawing in Crypto. This allows users to protect their earnings while working towards the withdrawal threshold. In other words, a heavy correction in the Crypto market is not going to eat away at the earnings you have already accrued. Simultaneously, one is also able to wait for an appropriate moment to cash out. Taking advantage of a heavy correction enables users to receive more coins and ultimately increase their holdings over time.
It All Adds Up
While the earning potential is not enormous, it is passive and once set up, continues to generate Crypto for users. Depending on a number of factors, users can expect to earn an additional $2 to $15 per month selling their unused bandwidth to companies such as Honeygain and Peer2Profit. Many are most likely familiar with Honeygain but I have found that Peer2Profit is actually way more attractive, due to the easily attainable withdrawal threshold. Those utilizing Honeygain will be aware of the withdrawal limit being a little steep. Users need to accumulate a balance of $20 in order to qualify for withdrawal. Peer2Profit, on the other hand, now offers withdrawals from as low as $1! Many of the withdrawal options on Peer2Profit are set at $2 but the introduction of TRX has allowed users to withdraw earnings from as little as a dollar! This also enables users to test the service while being able to experience the withdrawal process in a relatively short amount of time.
Accumulation In A Bear Market
Using multiple opportunities such as these and others can see users stack up a fair amount of passive Crypto over time. When you factor in the significant discount of a bear market, these modest amounts can really grow significantly in the next bull market. One can also use these Crypto earnings to purchase micro-caps that show future potential. This particular approach can be extremely viable, if well-executed. Cardano, a top Crypto project produced more than a 10.000% return from the previous bear market low to the previous cycle top. Remember, micro-caps that succeed, outperform the returns of larger projects such as Cardano. When you consider that these earnings are passive and are likely to appreciate significantly over time, it becomes even more of an obvious move. This then is yet another way to accumulate Crypto during a bear market without incurring “financial risk”, so to speak.
As mentioned, it’s perhaps not a model suited to everyone, but for those who are comfortable, it’s an additional effortless Crypto income source. Please conduct your own research and ensure you are comfortable with the workings involved. Always remember that this is not investment advice but merely me sharing my experiences as I journey the Cryptoverse.