Preparing for the next bull market!
Market Report #46
Introduction
Hi everyone, welcome back to a new newsletter, thanks for all the recent signups, in this newsletter we usually cover more macro focused updates on the crypto markets, the wider macro and my take on crypto assets. The macro outlook is usually one of the most important pictures to paint for investing and always will be a key factor on the crypto markets as a whole, let us take a look at price action and some of the things that have been on my mind over the last week or two.
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Price Action Overview
BTC over the past 2 weeks has pretty much done nothing, moving up and down a few percent, low volatility and the most boring price action possible, this is the type of market were traders are better off focusing their time on other ventures, doing research on new and interesting projects and not soley focusing on price action.
BTC gets heavy sellers at 30k and heavy buyers at anything below 26k right now, both sides are confident that the market will break into their bias direction with a flip of either support or resistance taking us back into a trending market. The fact of the matter right now is that nobody really knows which way the market is going to break, trying to time a breakout before hand is likely going to leave you chopped.
The good news right now is that as long as we continue to hold at this level (26k) for an extended period of time, the more likely we are that sellers will eventually get exhausted, as volatility continues to drain from the market. One interesting thing to point out is that compared to 2022 is that when price stalled at key levels we used to see market bidders easily lack conviction and start pulling bids, resulting in price usually just melting back down, now deep into this 22/23 bear market we are seeing more conviction with longterm buyers, likely due to us probably already on the other side of the market, and the halving less than a year away. It is easy to lack conviction in the early stages of a bear market, but now after 1.5 years, longterm buyers are finally seeing the risk to reward being a worth while hold.
Low timeframe, absolutely nothing to update, up 2%, down 2%, same thing everyday for the past 3 weeks, just keep an eye on the range BTC is currently trading, wait for a breakout on either side, and attempt to trade the market when we establish a trend.
ETH same old, same old, actually don’t think that anything has changed since writing the last newsletter around 3 weeks ago, price action was only up like $10 since that time and price has rejected this resistance once again and just pushing sideways.
Using ETH we can see a little more clearly just how wide this upper part of the larger macro range we have to trade between in this sideways market, the high being around $1950 and the low being $1600. I said in the previously newsletter that if price did end up trading below or around $1600, it would likely be a place I would add to my longterm holdings, I do not think that we will see too much sell pressure over the coming few months, sure we can drop 20/30% if we get some macro news coming from the US, but all in all, the worst is likely behind us and personally I want to start buying sooner rather than later, due to how fast we are approaching the next BTC halving event and ETH is already in a pretty perfect deflationary state.
Honestly all in all, not much price action information to update right now, not going to try and force a position on either side and would personally rather wait for a break in either direction to establish some type of trend and just buy spot for longterm hold.
Position for the next cycle
Price action right now is actually the least most important thing traders should be doing, spending time watching LTF sideways price action is the most unproductive action in this current market. Truth be hold, many of you already know this but trading doesn’t really bring the best returns in a bull market, traders usually have to stick to a specific plan and usually exit a trade way to early to ride the trend.
Speaking from personal experience and honestly just knowing lots of people who have found success in the crypto space over the past 5/7 years, nearly everyone I know has made significantly more gains from believing, finding and research projects and then dollar cost averaging in throughout the entire bear market. Dollar cost averaging may sound like a pretty rookie tactic but it works, time and time again, the most traders try and complicate their strategy and start using leverage everything falls apart.
So the halving at the moment is now less than a year away, this is historically a significant moment in any bear market, as usually just a few months later the market starts to pick up significant volume and buying power and the bull run begins. Obviously trying to time a bull run is hard, “hence the dollar cost averaging” but this is how you accumulate larger positions and wait for the markets to turn around.
The market IS going to turn back around, and probably in or around a year from now, these prices will seem relatively good entry points, stick to spot positions only, focus on researching new and interesting projects over trying to trade price action. There are so many projects that are currently at 10/50m market caps that are going to explode next cycle, and this is how you want to be spending your time, finding these projects and integrating with communities. For example, I spent a good chunk of time the past 2 months really looking into Ronin Network, now one of my biggest positions and likely will continue to be a major position because 1) I know the valuation and entry price right now fits my criteria for a undervalued project, and 2) I have strong conviction in the sector, team and project that entry price doesn’t matter longterm.
Trying to build passive income, trying to generate multiple streams of revenue, and stacking your positions as high as possible over the next year should be the main goal, finding certain key sectors that you think could perform well in the future, such as gaming, DEX’s and AI, all of these sectors are personally my favourites and areas will have dominate growth. This might sound like pretty basic information, but sometimes people forget just how high the market can run, and some of these new projects will do insane growth over the coming few years, try focus on conviction over price action.
So where are we in this current cycle? How long do we have accumulate? both super important questions, because you want to start accumulating and buying longterm holds between Panic and Relief, these are the neck points of the bottom of the bear market and will bring the majority of the upside while not actually having to time the bottom to get an entry like most traders will make out. I would personally take a guess and say we are currently around the ‘hope’ area in the current market, already passed the worst point of pain, but now slowly trending up and moving sideways while we wait for more positive macro conditions like the halving and macro economics.
Personally as we have already passed the peak of depression in this bear market cycle, in my own personal opinion, and I still have a significant amount of capital on the sidelines, I actually believe I will start to ramp up my buys more aggressively in the second half of this year. Why? Likely because we have already been in this bear market for maybe just shy of 2 years, not sure I can count on the fact we will continue to go sideways for a significantly longer period of time, and the privilege of having time in this bear market will likely come to and end sooner rather than later.
As market participants it is our job to trying to find the most optimal risk to reward, and for longterm entries, I think adding more aggressively over the second half of this year is going to work best for my own personal positions. I currently have around 50% in stables, ready to deploy, by the time September rolls around this number should be 20% as even if i want to be fully allocated, I always like to have some stable exposure.
The days of being a relaxed bear are over, being scared of more downside, and fearful.
This is the perfect market for accumulation and longterm buys will always win.
Position Changes
Set bids for 1.6k on ETH, and 26k on BTC
Starting to buy $ETH on a weekly basis
Added a large position to $APEX(Bybit Dex)
Holding a large position in $RON, now Staked
Reduced $FKPEPE and $BOBBI to my meme coin exposure
Holding a large position in $XRD
Thank you for reading this Newsletter; if you did enjoy it and would like to stay up to date with any of my technical analysis moving forward, please do subscribe. I am currently trying to write something on the markets at least once a week.
Thanks for always taking the time to read, I appreciate the support, and writing this newsletter is always the highlight of my week.
Great write up as always
Excellent analysis and giftful sharing with us, dear CC. Thank you. Be well.