Bitcoin still continues to consolidate. We have seen a 50% pullback on BTC’s second leg up, and it is now facing resistance at the 20-day EMA. Should we see a decisive breakthrough at this level, then we will likely see the trend continue to move higher. However, if we see the price begin to flatten, we could see a harsh reversal down.
Ethereum is also at a critical level of resistance. We should gain greater insight into crypto’s direction over the next few days.
Following the collapse of Terra Luna, we have continuously seen regulators take a hostile stance on stablecoins. This can be seen recently with the New York Department of Financial Services’ crackdown on Binance’s stablecoin BUSD. The NYDFS ordered the issuer of BUSD, Paxos, to cease issuing the stablecoin. As more countries prepare to launch central bank digital currencies, we expect to see more pressure mount on competing stablecoins.
Our philosophy on how to navigate the crypto market is simple. The only thing certain in this market is uncertainty and one must therefore embrace uncertainty. Projects that were once deemed to be untouchable such as FTX, LUNA, and 3AC have shown us that nothing is promised in the world of crypto. We continue to accumulate a wide variety of altcoins with strong fundamentals – a total of 10 in the model portfolio in addition to those we mention here – which include real-world utility, a creative vision, a competent team, and strong partnerships. Should crypto see an additional bull market, we can take heavy profits on altcoins accumulated at undervalued levels. Ultimately, in the crypto world you only need to be right about 1 or 2 coins to exceedingly an entire portfolio. Because when these coins see strong rallies, unlike 30-50% in a strong equities move, they are capable of moving 10x-100x. However, one should not go all in on any one coin because every single project is liable to experience total failure at a frequency higher than any other asset class.