Sirwin
Sirwin

Crypto Market Update and Investing Report 11.18 How far can this dip go?


Overview

  • Major News
  • Market Update
  • BTC Technical Analysis
  • Crowdloan: Acala
  • BTC 4 year cycle pt.2
  •  

Major Market News

 

Market Update

  • Bitcoin continues downwards and hit as low as 56.6k. BTC dominance hoovers around 43.50 as some altcoins counter the market trend.
  • Total Market Cap (TOTAL) drops as low as 2.4 trillion
  • Metaverse and Games continue to climb despite the rest of the market

          SAND +14%

          MANA +12%

          WILD +8

          CHR +14%

  • Algorand (ALGO) reached as high as $5.50 last night after a listing on Korean exchange UpBit. Price quickly returned to previous levels and currently sits at $1.86. I have reasons to believe that ALGO could be the next layer-1 to make a large run.
  • Dollar Index (DXY) post a 60-week high of 95.62.
  • TerraUSD (UST) continues its strong ascent to a $6.5 million Market Cap

 

Insight

     The last report featured on-chain analysis that favors a market correction as opposed to a complete sell-off. Click here to read that report. Long-term holders were not reducing positions and exchange reserves showed no significant inflow. The next logical step is to explore probable areas for price rebound.  

 

Technical Analysis

     Technical Analysis (TA) is showing that price is headed towards an important, well-tested trendline that began on Jun 21. This trendline began at the bottom of the summer downtrend and was well-tested in late September. There is a slight increase in volume during our current sell-off which isn’t too worrisome unless it continues to increase.

     The chart includes a line marker for the November 26 futures/options expiration. Expirations are often inflection points for the market and should be closely monitored. The trendline and expirations date line up with an important support level around 53k. It’s possible to see a lot of action in that zone and it could be where the reversal ultimately occurs.

BTC 1 Day Chart

A typical pattern seen during corrections is an initial dip, a small relief up and then a larger dip down. This pattern occurred in Sept and could be developing again. It’s a common place for traders to jump back in too early.

     TA is used to show us historical price patterns but in no way guarantees what will occur in the future. It’s a common misconception that TA is a fortune telling device. TA is just another instrument in a bag of tools to aid in calculating possible outcomes.

     Tomorrow we’ll explore the expirations on November 26. We’ll look at the options chain, leverage volume and max pain in hopes of making the best-informed decision.

 

Crowdloan Guide: Acala

     Yesterday I made a mistake and predicted that Moonbeam would most likely win the first Parachain auction, but Acala was the actual winner. I apologize and I hope nobody missed the auction riding on my sole word. I will still talk a little about Acala in case you already invested or would like to invest in the future. In the future I will try to avoid the same mistake.  

     Acala is the self-proclaimed defi & liquidity hub of Polkadot. Sharing the name with a wrathful deity in the Buddhist religion described as “remover of obstacles and destroyer of evil”. A retail investor can only hope that Acala aids in destruction of our current financial system and lives up to its name.

      On a lighter note, Acala is a layer-1 smart contract platform that is Ethereum-compatible and scalable. The parachain will feature a decentralized Acala Stablecoin that will be backed by DOT and some other cross-chain assets like BTC. Acala will likely include common defi products such as a DEX, aggregators, yield farms and leveraging instruments to name a few. Gas-fees will be insignificant which will help in recruiting users from Ethereum. Acala is backed by some of the largest venture firms in crypto such as Pantera, Coinbase Ventures and Polychain Capital. They have a large variety of influential partner projects too.

     The ACA token will serve as a network utility token and will grant governance of the network with voting rights. Distribution is not amazing with 20% reserved for the team and 20% for strategic investors but this is common for large projects. 17% will be allocated for the Crowdloan. From what I interpret, they will allow voters to decide what to do with their treasury fund. After a Parachain slot is reserved, they plan on having public sales of their token for those of you who didn’t get participate in the Crowdloan.

     Acala, like Moonbeam, will be very influential in the Polkadot ecosystem and the fact that Ethereum protocols could easily extend to the Acala Parachain, makes it important out of the gate. The stablecoin backing by DOT and “other assets” is slightly worrisome in this regulatory climate but it’s a small detail that requires further exploration. I personally invested into Acala through the Crowdloan. I recommend that you explore their website and read their whitepaper if you are interested in investing.

 

Notable Events

  • The first Move-to-Play game Genopets (GENE) is listing on FTX today.
  • Velas (VLX) an up-and-coming layer-1 platform, is listing on Kucoin tomorrow.
  • Summoner Wars, with 50 million downloads and its parent company Gamevil are to join the Terra Ecosystem
  • Redditor uncovers that PlanB predictions were discovered to be 10X of where price reached last cycle 4.3K (43k), 6.3k (63K), 9.8k (98k). I can’t find the post now but the redditor claimed to have read it on the Ben Cowen Telegram.

 

NOOBIES lesson of the day

4 Year Bitcoin Cycle Pt.2

     This is a two-part series, to read pt.1 press this link.

     In the last report I introduced you to the Bitcoin 4-year Cycle and explained some of its background. Today we’ll learn about the four different phases in the cycle. Those phases are:

  1. Exponential Highs (Bull Run)
  2. Correction (Start of Bear Market)
  3. Accumulation
  4. Recovery (Start of the bull market)

 

Exponential Highs

     We are currently in this phase. This phase is the most exciting phase in the cycle. It attracts the most market participants and creates the most hype around bitcoin and crypto. A large majority of its gains are made during this time. In this phase, predictions get exuberant, bitcoin newscast appear and the Lambo talk begins. The end of this phase occurs when euphoria hits the market. Euphoria is the most dangerous time and unfortunately when most of retail enters the game. Participants begin to believe that Bitcoin will climb forever until it ends abruptly.

 

Correction

A majority fall victim to the euphoria and end up losing the gains they made. The correction phase unravels quicker than any other, as the market enters a fear frenzy of selling. There are few buyers willing to accept prices and so price quickly spirals down. You can see small cap altcoins lose 99% of their value and BTC will fall as far as 80% in a matter of weeks.

 

Accumulation

     This phase is the quiet phase in Bitcoin. There is little news, attention or hype surrounding bitcoin in the mainstream. Few people care anymore, and many have lost hope for a recovery. This is when the smart money is accumulating. The price gets driven down and bought up at lower prices contributing to its sideways action. This phase is long, dull and Dollar Cost Averaging is the best strategy. This is phase when the real money is made.

 

Recovery Phase

      This phase starts around the time of the halving. It’s when hope begins to kindle again. Bitcoin price slowly climbs and modest gains can be made. Many enter and exit bitcoin during this phase because of lingering fears of the last cycle. Those who hold through this phase are rewarded in the exponential phase.

     These phases can be laid out easily, but the reality is that there are no clear lines to identify when one starts and ends. Its even harder to navigate emotions that come with being active in the market. These market cycles are common in new technology and are strongly tied to the market drivers of fear and greed. This is not meant to cause fear but rather as serve as a guide of what to expect when you participate in crypto and not fall victim to some of its pitfalls. Life changing money is very possible in this very young technology, but it doesn’t come free and easy. The best things usually don’t.

 

Tomorrow

  • Options Expiration
  • Max Pain price
  • Trade Update on MANA

 

Thanks for reading today’s report. Feel free to drop me any suggestions. My editor is out of town today so I apologize for any grammatical mistakes. If you’re new to crypto and want a subject covered in the NOOBIE lessons, drop a line in reddit or email.

 

Make those gain!

Have a great day/night fam!

 

Trader Gabi

Twitter|Medium

 

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Gabi_
Gabi_

Market Research Analyst . Crypto Enthusiast. Hours of research condensed into a daily five minute report.


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