November 9, 2021
BTC and ETH Are Doing Their Thing
Introduction
As we anticipated thanks to on-chain signals and technical analysis, BTC and ETH are capturing all the attention right now, finally breaking out of their macro consolidation structures. While BTC managed to decisively break its old all-time high, ETH followed suit and conquered new highs.
Green days as we are seeing now are what every crypto investor is yearning for and why observing on- and off-chain signals to build conviction, taking the right entries, and waiting patiently for the price action to unfold are the keys to crypto investing success.
While it always looks easy in retrospect, everyone who has gone through the rollercoaster ride of the crypto markets knows how difficult it actually is to remain level-headed and weather the often overwhelming volatility and omnipresent FUD storms. Congrats to everyone who has made it here!
Market Outlook
Of course, there is never a lot of time to celebrate wins in the markets, because the next leg higher or correction is always around the corner.
So, what can we expect going forward? Of course, the risk of a correction is rising with every green day we see in the markets. It’s therefore never wrong to start securing some profits.
At the same time, on-chain metrics, sentiment, and funding rates indicate that we are nowhere near the overheated levels we reached during the bull market phase earlier this year, so there might be more juice in the current run... Will we reach the same exorbitantly high levels of leverage and greed though, now that many have “PTSD” due to May's crash? It’s definitely reasonable to remain more cautious now.
Here is some advice in case you are struggling to take profits. 😉
Meanwhile, inflation in the US is hitting fresh records, further undermining the credibility of central banks and strengthening the case for Bitcoin. In the mid-term, it is a double-edged sword though (as explained in yesterday’s roundup), since rampant inflation increases the risk of central bank intervention.
Bitcoin’s Taproot Upgrade Is Happening This Week
It has been quite a while since Bitcoin’s last major upgrade, Segwit, which was implemented in August 2017 and resulted in the launch of the Lightning Network. In just a few days, the next important milestone in Bitcoin’s development will be activated: Taproot. The upgrade will likely be activated on Nov. 14th.
The Taproot “soft fork” will improve the Bitcoin network’s privacy, efficiency, and smart contracts capabilities.
Taproot will implement Schnorr Signatures, an algorithm that will allow users to aggregate multiple signatures into one for a single transaction, reducing the inherent visible difference between regular and multisig transactions.
In other Bitcoin news, we see the Bitcoin mining space continuing to mature and grow.
BTC Now, Alts Later – But Be Prepared For a Shakeout in Between
We have seen it time and time again: When BTC and ETH make major moves like they are doing right now, the huge amount of fresh capital will find its way eventually – at least partially – into altcoins, leading to the massive altcoin seasons everybody has come to love. So, while everyone’s eyes are on BTC and ETH, try to think a step ahead and not miss the catch-up price action by fundamentally sound altcoins…
To make things a bit tricky, more often than not we get some sort of sell-off after a BTC rally and just before an altcoin season… It would be too easy to just rotate from BTC to alts, right? Well, try to manage your risks and scale in and out of positions. If you play your cards right and catch only 60 or 70 % of major price swings, you’re already outperforming most other crypto investors!
Buy The Rumor, Sell the Conference?
We have witnessed more than once that projects that attract a lot of attention and hype for a period of weeks or months, often start reversing or at least stalling their parabolic price action after major news events. Often these come in the form of conferences, where developers and community members meet, which usually leads to maximum attention and speculation surrounding a project.
So, what we have seen with Fantom since its conference a few weeks ago, could well play out with Solana as well which hosts a major conference in Lisbon this week. FTM reached its local top during the Fantom Developer Conference in October and has since consolidated below its highs.
This is of course not necessarily a bad thing, it just means that hype and price action get exhausted in the short term and attention shifts away from a project for a while.
Of course, Solana still has quite a few arguments going in its favor, with a lot of development activity and growing interest in the Solana ecosystem…
Reddit & Discord Embracing Web 3
After we saw Reddit hint at a major crypto integration a few days ago, today Discord expressed its interest in the Web 3 world, teasing with a “login with MetaMask” feature. The two messaging giants embracing the Web 3 narrative will give crypto mainstream adoption a major boost.
Have You Claimed Your ENS Tokens?
If you have registered a .eth domain in the past, don’t forget to claim your ENS airdrop!
Thanks for the daily updates. I was tracking the conference and made a few trades, the best of which was TULIP. prices def peaked a few days before. All and all it was a successful strategy with gains between 15% and 114%. Clear winners were Arweave, SolFarm and Aurory