🧘♂️$5,000 ETH?
Market Meditations | May 7, 2021
Dear Premium Meditators
Today we share analysis on our Top 3 coins.
In the future, we will be taking charting requests from our premium community.
If you’d like to be involved in shaping the content we send out, don’t forget to join and engage with the Market Meditations Discord. Link here.
Read, enjoy and share with your network. Let’s all build wealth together.
Crypto. Bitcoin holds support, faces resistance at $58-$60k.
Legacy. S&P 500 and Dow Jones Industrial hit record highs on Friday after weak U.S. jobs data eased worries about the Federal Reserve reducing its massive stimulus program anytime soon.
On Friday we provide fundamental and technical analysis on the coins we are trading. To trade any of the coins mentioned you can use:
FTX Crypto Exchange (5% Fee Discount): https://ftx.com/#a=KoroushAK
USA FTX Crypto Exchange (5% Fee Discount): https://ftx.us/#a=KoroushAK
ETH/BTC
In yesterday’s newsletter we looked at Ethereum fundamentals. Ethereum is a hot coin at the moment, hitting new all-time highs as excitement continues to build ahead of the London hard fork and the implementation of EIP-1559, which is expected to take place in July.
Specifically, we focused on bullish on-chain analytics. Today, we look at the technicals. In case you missed our previous analysis:
Now for the technicals.
One Day
You’ll notice we’ve opted for the BTC pair. Assuming BTC stays in the $50,000-$60,000 range this will set our upside ETH target at ~$5000 dollars.
This is an aggressive target given the break out of the ETH/BTC pair alongside the strong fundamental support.
Invalidation 0.05 BTC.
LINK/USD
Stated simply, Chainlink is a bunch of non-connected computers that individually validate and translate real world information for the blockchain. Check out our DeFi 101 article for more information on DeFi, Chainlink and a podcast with @DeFi_Dad. The fundamentals for Chainlink are strong:
Use cases. It is the most widely used oracle solution in the smart contract economy providing a large and growing market of potential data consumers.
Community. Link marines have diamond hands who don’t often sell their bags. This support feeds through to social media which creates strong hype and momentum. The recent $DOGE rally shows social media hype and momentum are forces to be reckoned with.
Accessibility. Very easy to take ETH and swap it for LINK. Further, it is listed on every single major exchange, providing liquidity and ease of purchase. This contrasts with coins that are only available on DEXs with complicated user interfaces.
Over to the technicals, zooming out on the weekly, we can see a very strong uptrend. With the long term moving average moving steadily, barely touching the 30-day moving average. Zooming out further, we see that despite recent sideways consolidation, the bullish trend is intact, with higher highs and higher lows. Let’s take a closer look at the One Day chart.
One Day
Expected to see a major breakout where we hit $50. Now options going forward:
$42 is our key structural level to see continuation of bullish price activity.
Fibonacci tool provides us with 2 potential entries: One at the 0.236 level confluent with $46. Or more conservatively we might see a bounce off of the previous high at around $43. Below that, we may see more sideways price action.
Easiest upside target: Right below the $60 level minus 0.382 extension which gives us $59.47. If we continue to bounce off the 0.236 we could extend this target past the $60 level but it’s very important to note whether we bounce off the $43 or $46 level.
ADA/USD
ADA, the native token of the Cardano smart contract platform, has joined the altcoins hitting new all-time highs this week. In terms of the features of the project, you can think of Cardano as version 3.0 of the blockchain if you compared it to Bitcoin (version 1.0) and Ethereum (version 2.0). That is to say, Cardano is said to improve upon the work of Bitcoin and Ethereum in three core ways:
1️⃣ Scalability
2️⃣ Interoperability
3️⃣ Sustainability
More on this on our Cardano 101 newsletter for those interested.
One Day
$1.9 – Extension Target
$1.5 – Invalidation
ADA is trending yet again and market structure points to continuation.
$1.56 was our ideal entry confluent with the 0.382 level but until we see a clear breakout past $1.75 we’ll be looking for more opportunities to enter.
The Eisenhower Matrix
Do you find that you are always busy, but never seem to get anything done. Many of us do. President Eisenhower however did not. As well as the leading the allied forces to victory in Nazi Germany, he was responsible for implementing the Interstate Highway System (improving the efficiency of the entire US economy) and creating the National Aernautics and Space Administration (NASA).
In his pursuit of productivity he established that there are “two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent”. So he created the Eisenhower Matrix, a framework which he used to prioritise tasks and increase efficiency.
This is a 2×2 matrix with importance, or the magnitude of the consequence of a task, on one axis and urgency, or the immediacy of the consequence of a task on the other. A task can therefore fall into one of these 4 quadrants.
Do. If the consequences of a task are both immediate and of significant magnitude, simply do it now. Making a large trade that meets the conditions of your trading system would fit into this quadrant.
Decide. If the consequences are of significant magnitude but not immediate, schedule a time to make sure it gets done. Examples include amending your long term asset allocations or creating a new trading system.
Delegate. If this task does need to get done urgently but it is not important, give it to someone else to do. This normally includes menial tasks such as admin.
Delete. If neither important nor urgent, do not do the task and stop thinking about it. This could be watching TV or staring at old trades without objective.
The Eisenhower Matrix is a tool we can all use to focus on the tasks that really matter, increasing your productivity and more importantly your profitability.
DeFi Masterclass: Boost your Income
In this episode, we pick out the highest value insights into the DeFi space from previous guests.
Key Takeaways:
In DeFi you can earn yield through lending or market making
Lending is simply loaning an asset to a third party in exchange for interest. Market making is when a user provides liquidity to an automated market maker (AMM) such as Uniswap, earning a % of the trading fees of the asset that you have provided liquidity for.Look for new projects to earn high yields
Many protocols pay APYs far above the rates that the market dictates in order to attract new users. Look for new projects and you can benefit from these artificially high rates.Track smart money
Look at successful projects, dive into the wallets of the majority token holders and see what else they are invested in. You can also track whether this smart money is selling or accumulating your investment. To take this to the next level check out Nansen.ai.Apply traditional finance metrics to DeFi projects
Use metrics such as daily revenues and P/S ratios (market cap ÷ revenue projected over a year) which allows you to compare DeFi projects on a relative basis. One resource for this is Token Terminal.To gain exposure to early stage DeFi projects, consider fair launches
There are many projects in crypto that publicly announce their launch, offering their token under the same conditions to all parties. Look out for these launches and dive into their discord groups to assess the founders, the developers and ultimately the risk.If Ethereum network fees are too high check out networks such as Binance Smart Chain and Polygon
Although these chains may have their own disadvantages, the low fee environment will allow you to get involved and better understand the DeFi space.
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.
