BRF #5: The Game Is Rigged
The Game Is Always Rigged!
There is this fairly large illusion that still exists out there that markets are fair and honest, that through all the regulation (especially in countries like the US) things like manipulation are near impossible and everyone is a good actor in the space. I would actually argue the exact opposite is true, markets are extremely unfair and skewed against the average investor. There was a recent study where apparently most people feel that way now, I can only assume that after events like the Wallst Bets/ Game stop fiasco more people are starting to see the truth.
The fact is though similar has been happening in the metals market for at least the last 20 years and most people have no idea. In fact banks paid out almost $1 billion in fines over the last 20 years for anything from insider trading to fraud. I say all this because the very same thing is unfolding right in front of you with crypto and again most people have no idea.
Lets think back to the narratives up until this point, “rat poison squared”- Charlie Munger, to Jamie Dimon (CEO Chase Bank) stating he thought it was a joke while Chase was running an eth incubator at the same exact time. The noise hit an all time high in 2017, then once they drove the market down, with help from Trump & the CFTC, things went pretty quite and no one really cared again until 2020 when once again Bitcoin started to make huge moves.
Guess what though, by this point alot of the big players were already starting to get in, it was only on the bank front end that they had to wait till $20k-$30k before they could add to 13Fs.
Now we have Jerome Powell (head of FED) coming out just yesterday telling us that the Fed is involved in a “large-scale” R&D project for a digital dollar. They hate it, talk sht about it, then try to copy it. That’s how it goes I guess and that part of human nature I don’t see changing. To me though this doesn’t speak to how much of a “new paradigm” bitcoin is, in fact it makes me more concerned that bitcoin was a psy-op all along to train people on DLT and move them out of cash.
I don’t mention all of this to intimate or dissuade you from chasing your version of The American Dream, I am just stating truths that you might not want to look at or that you might not have realized is going on. In fact I think crypto is literally one of the last risk asset classes that you can get insanely rich off in the shortest amount of time.
In This Issue:
The Game Is Always Rigged
Bitcoin Thoughts & Chart
Altcoin Charts
The Next Big Thing In NFTs
Biden Admin Concerned About Digital Yuan
Bitcoin Thoughts & Analysis
If we look at the macro, we got a nice resistance to support flip (R/S) and now continue on the march up to all time highs. We are sitting just under ATHs so we can expect it to continue ranging here or with the proper catalyst an impulse up to new all time highs.
I want to introduce something new with you here, I will go into more details at somepoint or maybe even do a video (comment below if you want to see a video breakdown) of what we call on-chain metrics. This is something newer, really just represents what is happening with supply and demand of the underlying risk asset, in this case we are going to look at miners and the amount of btc on exchanges.
If you look at this chart you will see that on the daily we are seeing very low amounts of miner outflow (aka they aren’t selling).
Next, we are also able to track exchange wallets and see how much bitcoin they are holding, which since January has been trending down, this would imply there is a supply crisis starting to happen. There are more buyers then sellers.
Some people poopoo on-chain metrics similar to those that claim news events affect bitcoin prices, but they both are a representation of psychology in the market so its important to pay attention.
ETH Thoughts & Analysis
Here is a quick look at the macro picture of ETH, I like that this for the most part is leading, I think we will see ETH and LTC lead this next rally, even though Bitcoin will break through to ATHs as well.
ETH 3-day chart
This is looking very good!
Keep in mind that usually when an asset breaks out into a price range it has never been in before, we get whats called price discovery and this is where anything is possible really.
ETH 1-day chart
Altcoin Charts
CAKE
Lets catch up on this BSC alt now that its in price discovery, all pretty easy to see now in hindsight but we were talking about this before green box was even resistance, then we see that perfect retest on the green-dotted line before next take off. I assume next stop is $30, considering that is the top of the very first candle we got when it was listed on Binance (and other exchanges) so it will touch that again or close to it (lots of traders could attempt to front run by putting their orders slightly before $30, this keeps happening and you end up with a large sell off before target price)
This has been a fun one to track, played out almost perfectly, easy to spot and track now.
BNB
This one I did not see coming honestly and from the moment it touched the bottom blue line there creating an expanded flat, it took off and hasn’t looked back. I know people still holding BNB from $20, when were were talking about it back in 2017. Now that’s a nice payday!
This is also an aggressive example of parabolic price discovery we can see in alts, which is why you can make wayyyy more money trading alts vs bitcoin. Who knows where this will stop, $1,000?
FTT
Keeping up with exchange coins here, another surprise is sam coin aka FTT, which I had a target of $30 on originally and its completely blown through that, it broke through $50 earlier today. This is another coin in price discovery.
I wanted to share a cope chart but we are maxing out email length again so I will just say that am really impressed with how well that project performed as an airdrop based project, opens up a lot of opportunities for future projects.
The Next Big Thing In NFTs
As the price of NFTs continues to rise, so will the creation of funds/DAOs that pool together their assets to purchase not only NFTs in whole but also pieces or fractions of the underlying asset.
In essence, NFT fractions, also known as “shards,” are derivatives of the underlying asset. They are created when a token representing the asset is issued, and they can be traded on a wide range of decentralized exchanges (DEXs,) such as Uniswap and SushiSwap.
Earlier this month, not one but two DAOs were formed by groups of individual investors—on the fly—with the express purpose of acquiring specific NFTs that would otherwise have been out of their price range.
Keep in mind though NFTs are still a huge legal gray area and in many cases could be looked at as securities. My biggest gripe with NFTs is that the rights you get are so poorly explained, like whats stopping someone from buying say the Beeple for $69 million and then breaking it up into pieces, re-selling for $200 million?
Biden Admin Concerned About Digital Yuan
Understand that the digital yuan (china’s central bank digital currency) has been in development (publicly) since about December 2019, and we don’t hear to much about it these days. If its anything like their social credit system then assume at least 3-10 million people are already using it. Lately though we have started to get some leaks, like the fact that there will be an expiration date on using the CBDC (similar to your Starbucks rewards points) and at least in the beginning can only be used for things that directly stimulate the chinese economy like food, transportation, agriculture etc.
The People’s Bank of China has rolled out trial issuance of a digital yuan in cities across the country, putting it on track to be the first major central bank to issue a virtual currency. A broader roll-out is expected for the Winter Olympics in Beijing next February, giving the effort international exposure.
Apparently biden is concerned with what this could mean for America’s dominance, which if we are using common sense and piecing things together this is just the next step in a 100 year long plan of china to take over everything.
China’s officials have said the main intentions of the digital yuan are to replace banknotes and coins, to reduce the incentive to use cryptocurrencies and to complement the current private-sector run electronic payments system -- dominated by Ant Group Co.’s Alipay and Tencent Holdings Ltd.’s WeChat Pay.
Below are sponsors and recommended tools of the trade! Expect this section to grow as the newsletter grows!
Binance Exchange
By far still the largest exchange, if you want to trade majors and a huge selection of alts and defi, not to mention the Binance Smart Chain projects!
FTX Exchange
For non-US residents who want to trade leverage on bitcoin, alts and trade futures contracts on crypto and stocks.
QuanTower
I am kind of kicking myself for not starting to use this sooner then I did. I was originally introduced to the team in 2019 and I have to say the project has really matured over the last few years into a great tool that just about cancels out 3 other services I individually pay for.
A tool like this is valuable because its a lightweight desktop software that connects via api so even when the front end site goes down during volatility, you can still trade. This happens the most with sites like Binance and FTX. They integrate with tons of exchanges in crypto, forex and options space. Videos coming soon!
If you want to come onto BRF as an early sponsor for our newsletter, please reach out to bullrunforever@protonmail.com or just reply to this email.
None of what I put in these emails is intended to be taken as investment advice, there is no BUY/SELL calls in these emails, nor is this any kind of signals group. There is obvious and inherent risk involved with trading cryptocurrencies or any asset, that must be taken into consideration by the investor. Any and all outcomes are your fault good/bad!