Don't Be Greedy
Market Report: 11th July 2019 — Subscribe to our newsletter.
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CRYPTO NOTE
The daily view from our desk
An armoured truck carrying thousands of dollars in cash crashed and dispensed notes all along this freeway — mass opportunism ensued. In another scene of desperation, 250k people have pledged to storm Area 51 to uncover the alleged alien secrets. And finally, more stupidity, as this mum was arrested after driving her kids in a paddling pool on top of her car.
DON’T BE GREEDY WHEN ALTCOIN BAGHOLDERS ARE FEARFUL
BITCOIN’S DOUBLE TOP IS NOT YET PROBLEMATIC FOR BITCOIN ITSELF, BUT IT IS FOR ALTS
We told you this battle wasn’t going to be easy. And that the double top was a very plausible scenario. But did you prepare for it? Once bulls failed to pierce through $13.1k for the third time, did you adapt your stops? If not, meditate a bit, focus on the next trade and consider Alex Krüger’s thread. It will tell you the difference between having stop-orders and having a potentially successful plan.
What next, now that bitcoin dumped nearly 16% from yesterday’s local top — achieved after a nice 6% climb over the day. Well, remember the entire market is down — so there’s no reason to trust those who are clamouring for an alt season, as UB argues. Even if everyone is fearful about alts, the traditional advice recommending investors to be greedy at such times — being mindlessly repeated by many — is unlikely to apply here because the fearful ones are just a few with heavy bags. And such advice is only applicable in the midst of generalised fear. So, even if the bottom for alts has possibly occurred, a pump is not the next step.
DON’T BE FEARFUL WHEN BITCOIN WHALES AREN’T FEARFUL
BITCOIN MIGHT HAVE STARTED TO CORRECT, BUT REMEMBER THIS IS STILL A BULL MARKET
Meanwhile, another dump, another adjustment of the bright side of bitcoin’s parabola. And that can be done for weeks to come, provided the original cryptoasset keeps threading sideways. However, the question is whether today’s 5% recovery from the overnight bottom is just a dead cat bounce or a positive sign. Here, Mr. Chief suggests looking at the $11.9k level to assess the situation.
It’s also important to note that some will try to blame these dumps on minor events, like the comments on Facebook’s Libra made by the Chairman of the US Federal Reserve. Maybe this had an impact. Maybe not. What one must understand, in all previous bull runs, bitcoin faced larger drawdowns without any catalyst, as Quantamental greatly shows here. So, these bad days are normal and to be expected. After all, without them how could you even try to buy the dip?
WHAT YOU CAN’T MISS TODAY
DON’T LEAVE FOR THE WEEKEND WHAT YOU SHOULD READ TODAY
▪ Kevin Rooke reminds Bitcoin’s average transaction fees are at an all-time low for periods in which BTC has been above $13k (as of yesterday, that is).
▪ BitMEX’s Arthur Hayes reminds more than 95% of the startups fail. So we shouldn’t have been surprised — nor worried — when more than 95% of the ICOs failed. Great interview with Angie Lau, editor of Forkast News here.
▪ Mohamed Fouda writes “probably the most important research report Token Daily has published”. Learn all about “Decentralised Finance” on Bitcoin here.
▪ Justin Camarena found an invalid Bitcoin block today, which wasn’t accepted by the network as BitMEX Research shows here. For more context read Stop and Decrypt’s excellent piece explaining how the original blockchain works.
▪ Garrick Hileman, from Blockchain.com, just published a 147-slide deckdetailing why cryptoasset awareness is not a driver of adoption. Summary here.
QUOTE OF THE DAY
NOT EVEN $20K BACK IN 2017
“Experienced traders can sometimes identify high odds of a LOCAL top or bottom in real-time or shortly after the fact.
But nobody can reliably call a long term top or bottom in advance. That’s guessing. Larger time frame tops/bottoms only become apparent after the fact.”
- By Alex Kruger