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Market Meditations | May 25, 2021
Read and take action now. Hurry!
Dear Meditators
The best and only way to PROFIT is to learn. Might not seem the case when we are in a parabolic uptrend and the market is moving up only. But the easy mode is over.
Today, we are sharing a FULL market analysis. Study. Absorb. Grow.
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Welcome to Relief Rallies and ‘DeFi Explosions’
? RELIEF RALLY. The term relief rally is named such for a reason. Following a downtrend, seeing the market green again, even if for a small time frame, can certainly be a relief.
? BTC OPTIMISM. It doesn’t take twitter and headlines very long to pump out positive news again. A couple examples:
Dalio prefers BTC to bonds. “Personally, I’d rather have bitcoin than a bond” in an inflationary scenario, Ray Dalio (billionaire hedge fund founder of Bridgewater Associates) said during an hour-long conversation with CoinDesk Chief Content Officer Micheal J. Casey.
Elon Musk speaking with BTC miners about renewable energy. In a tweet, Musk said he spoke with BTC miners based in North America. “Potentially promising,” his tweet concluded. MicroStrategy CEO Micheal Saylor said he convened the meeting, also in a tweet.
Yesterday I was pleased to host a meeting between @elonmusk & the leading Bitcoin miners in North America. The miners have agreed to form the Bitcoin Mining Council to promote energy usage transparency & accelerate sustainability initiatives worldwide.
Elon Musk @elonmusk
Spoke with North American Bitcoin miners. They committed to publish current & planned renewable usage & to ask miners WW to do so. Potentially promising.
? DEFI TOKENS EXPLODE. Another positive growing narrative appears to be that of DeFi tokens. With one such headline being: DeFi tokens explode. ? Driver? Perhaps a growing bridge/distinction between productive and non-productive assets. Compare and contrast DeFi tokens with use cases vs. so-called ‘meme coins’. Certainly, it is interesting to note that DEX volumes are at a record in May:
The trading volume numbers for Ethereum-based decentralized exchanges are hitting record highs in May, with the total trading tally well over $100 billion, according to data aggregator Dune Analytics. Leading the way is bellwether Uniswap with a whopping $61 billion in volume this month.
? DOES IT PLAY OUT IN THE TECHNICALS? Let us now uncover the extent to which we see the BTC optimism and DeFi hype play out in the charts.
1️⃣ BTC/USD
We’ve been watching the $30k and $45k levels since the recent dip.
Zooming into the daily, we see we have hit resistance at the $40k level. It is a weak resistance, as we have only tested it once.
What does it mean for you? If you’re scalping, it should be a new level you are conscious of. To break it down even more, the probability of a $45k upside target has decreased.
Finally, this latest bounce has drawn our attention to the 0.382 level. Which shows some strength. To lose this level, will weaken the structure further.
Why? Because we will see a series of lower highs and lower levels. Leading to a continuation pattern which we want to be very aware of moving forward.
2️⃣ ETH/USD
We’ve bounced right off the 0.382 level.
Recall the Fibonacci basics: the further up we bounce / retrace after a move, the weaker the move. In context: the entire recent ETH move down has only retraced to 0.382 level.
That does not look bullish and if we were to bounce off that 0.382 level and test the lows at the 0 level, caution is recommended. It may begin to resemble a textbook move down after a 0.382 retracement.
Downside targets after that? The best case would be the $1400 level. Below which, there is no recent support since 2018.
⚠️ As we go through the next few sections, please note this is not the most opportune time to aggressively go into assets.
Rather, assets that show strength in times of uncertainty would be attractive choices if BTC were to resume an uptrend, money was to flow to ETH and then to Altcoins (as per the crypto money cycles) ⚠️
3️⃣ YFI/USD
Showing some strength from the lows to the 0.382 level.
Key resistance at $50k. Important psychological level.
Support just below $40k and around $30k. Last hope at the $21k level.
4️⃣ UNI/USD
Straight back into 0.382 level.
Key support at $20 level. Very important psychological level. Losing that, there is not much else support except a shaky one around $16-$18.
Key resistance around $35. That’s where the market structure may start to shift.
5️⃣ MATIC/USD
170% bounce since the lows.
One of the strongest looking assets on the market. Should the 0.382 level hold, MATIC could continue with a lot of strength.
This of course will depend on BTC and ETH consolidating sideways at the least and not making another move down because that would invalidate the setup on any altcoin that is lower market cap.
Above $2 is a breakout level.
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Just because the market isn’t pumping, doesn’t mean there aren’t opportunities. At the moment, we’re looking for talented crypto writers / researchers / technical analysts. If this sounds like you, please follow these instructions.
By COB Friday (28th May), please could you write up a short crypto segment on the recent BTC dip and send it to ? careers@koroushak.com ? Imagine you are writing it to be included in the Market Meditations newsletter. There will be two components to this:
Researching and writing an engaging and useful crypto story
Understanding and matching the style/communication/brand of the Market Meditations newsletter.
Please use the ‘Will the Bull Market Continue?’ section of this letter as an example. What makes this example good? The topic is relevant and interesting, the writing is clear and concise and it is actionable (references other resources that readers can use to continue their growth and development should they so wish to [Glassnode, Cryptoquant etc.])
⏰ We look forward to reading your writing by COB next Friday (28th May)!
Please note while we are primarily looking for writers, all talent is welcomed and there are multiple other roles at Team AK for those wishing to go beyond. i.e community manager, content creator, meme lord etc.
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