RawCrypto Monthly #4
Have we seen tops for this year? Is the mother of all alt seasons about to hit? And what the heck is a hero trade? Let's answer all of these questions in this issue of RawCrypto Monthly! ➡️
Hi all 👋
The end of the month is approaching, and with that, it's time for another RawCrypto Monthly issue. In this fourth edition, we'll briefly catch up on what has happened since the last newsletter, what I think the market sentiment is, and, of course, what I am doing right now.
📉 Market Sentiment 📈
After both Bitcoin and Ethereum reached new all-time highs of about $69k and $4.9k respectively recently, and with the end of the year approaching, we can rapidly see market sentiment changing.
Since then, we have seen a significant but healthy correction of about 15-20% across major assets. This did surprise a good chunk of people, which, to be honest, was a surprise to me. Hah! Markets don't go #uponly in the short term, and we were way overdue for a correction.
People now aim for BTC to hit about $52k and find support there. It's currently sitting at $56k, not all that far away, and we have seen two attempts so far of breaking up — both of which failed (at $66k and $60k).
From this chart, we can tell that we are likely in the same range that we will end the year in. This would mean that we have already seen the top for 2021.
It is further supported by the Stock-to-Flow model failing its predictions for $98k in November and $135k in December. They should both, in my opinion, be thrown out the window unless there are some insane catalysts.
From what I can see, people are more than ever blindly bullish. It is tweets such as this one that make me think that there are still too many bulls with too much money to deploy at ultra-high risks (i.e. leverage). Money was made too quickly, and everybody expects to lose some.
It will take a little more than a 20% correction to really scare these bulls.
I'm using Tyler as an example here because, in early 2021 I relied on him quite a bit for a reasonable perspective of the market. But since then, people (including him) have become radically bullish to an extend that I cannot help but see as a top signal.
So, what to do if we should we have already seen the highs for 2021?
👀 What am I doing? 👀
With so many top signals out there, I become increasingly cautious, which has resulted in me taking significant profits off the table. I have also sold off most of the calls I made in the Telegram group ($WND, $REALM, and $HIGH) for good profits.
If we have already seen the 2021 tops, it doesn't mean the bull market is over. It could just mean that things will calm down for the biggest assets (BTC, maybe ETH) while the action might continue in altcoins.
However, this relies on Bitcoin staying stable and not creating unnecessary drama, which is a big if. Should this happen, however, we could see the mother of all alt seasons.
Under that assumption, I am planning what I call a "hero trade". I don't plan or execute them often as they're incredibly risky. It entails flipping a major existing position into another asset. The one I am looking at is BNB/ETH specifically, and here's why:
BSC is about to hard-fork into Bruno v1.1.5, introducing a 10% real-time burn of BNB used in every transaction.
BNB makes people incredible amounts of money. I hear in the realm of $50k for $1M BNB vouched per launchpad. Pretty insane instant returns.
Ethereum has many issues and lots of drama right now. From fees that price out retail, to the foundation/team selling tons of ETH, big VCs/teams "giving up" on Ethereum, etc.
Larsson line has just turned yellow which is an indicator I’ve been following for a while.
BSC also has significant issues, from the lack of decentralization to recent on-chain problems and potential legal trouble through Binance owning it. But the fact is that people make money with BSC and thereby BNB. Most people don't care about decentralization as long as their numbers go up.
If my target ratio of BNB/ETH is reached, I will flip a good chunk (if not all) of my ETH for BNB temporarily while monitoring it closely, hoping to double my ETH position when selling it back.
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There is more I’d like to share, but I these newsletters are getting longer every month. If you have any feedback, any questions, feel free to jump into my Telegram chat or follow me on Twitter.
Until next time,
Rob
Thanks for the insights Rob!