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Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool.
🙀 Fake News and Real Levels
So… the LTC chart exploded on fake news that Walmart is accepting Litecoin payments.
Some of the biggest publications in the space reported the news. Leading to a big green candle and consequent red candle on news that the news was in fact, fake.
What do we learn from this? Trading is not an exact science. Master Fibonacci Retracement, Moving Averages and more but you are still presented with the truth of the matter; we are humans and humans make mistakes. Even algorithms are programmed by humans and so, mistakes can be made there too.
Things were looking very bullish as we approached the 0.618 level.
And now? Well, we’ve retraced back down to the 0.382 level. Remember, this is a key level that we don’t want to lose.
Entry here? High risk play. Normally the first test of a level is your highest probability play for a bounce.
Bringing in the Moving Averages, we see 7 MA crossing with 30 MA. As far as the short term is concerned, this is a significant hit to the previous trend that was developing.
What do we want to avoid? Price continues to trend down and gives us another cross of the long term moving average (the 100 MA with the 30 MA and 7 MA). If this scenario did materialise, we may see a sideways market for the next few months.
We don’t report news when there is none. Ethereum analysis is the same as last time: we are watching the $3k and $4k level.
Above $4k, we expect further upside.
Below $3k, we expect further downside. At least a test of the 100 MA at around the $2.6k level.
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🇰🇷 South Korean Crypto Exchange Closures
More regulations are set to hit South Korean exchanges. This regulatory overhaul could result in close to $2.6 billion losses. There is a September 24th deadline for foreign and local exchanges to register as legal trading platforms as part of an effort to tighten oversight of South Korea’s crypto sector.
Even Binance recently suspended its won-to-crypto trading service to comply with Korean local regulations. The biggest 4 exchanges in South Korea (Upbit, Bithumb, Korbit, and Coinone) appear to be safe, but many local exchanges will go under. It will be difficult for many local exchanges to meet the regulations for some of the following reasons:
Exchanges must partner with local banks.
Customers must then have an account with that local bank.
Banks will have to absorb the risk of hacks.
Banks will absorb risks or money-laundering cases registered on exchange platforms.
It is important to think about these local exchanges and the exposure they currently give to South Korean customers. Many carry smaller altcoins that are not listed on major exchanges. If these exchanges close, this money in essence will be wiped out! The police foresee many operators attempting to embezzle or refusing to refund customers since operators will go under. The central police agency has begun to set up crypto units for crypto-related illegal incidents.
While these are unfortunate events, we should use cases like this to think about the exchanges that we are using and the coins that we are invested in. We must always make sure we understand the risk associated with all of our investments!
👁 J.R.R Token
EGold (EGLD), Elrond’s native token, soared atop the wings of a giant eagle to a new all-time high yesterday. But what exactly is Elrond?
Elrond is a security-focused public blockchain using a Secure Proof-of-Stake (SPoS) sharding protocol aimed at creating a decentralized network that is far more efficient than its competitors. Areas like increasing interoperability, scalability and speed are integral to the project.
The network uses Adaptive State Sharding in combination with an SPoS consensus mechanism to guarantee speed and security for its transactions.
Elrond improves throughput by partitioning information on the blockchain, and combines three different types of sharding (network, transaction and state) in order to take advantage of the best each has to offer.
Each shard is responsible for a part of the state and transaction processing. Every shard can only process a portion of the transaction in parallel with other shards.
The metachain, an ever-watching eye, runs a blockchain on a special shard to notarize and finalize the information from shards, among other functions.
Elrond claims to be capable of performing 15,000 transactions per second at a fraction of a penny per, seemingly solving the scalability issue plaguing many projects in the crypto world. The recent demand for Ethereum alternatives may offer some explanation as to why Elrond has joined the ranks of Solana and Avalanche in rising prices. Many projects are gaining momentum as investors demand solutions to slow transaction speeds and high gas costs.
On Mondays, our ‘Scan The Week’ section is designed to show our community what events and headlines we will be keeping an eye on.
Monday, 13th September
Tuesday, 14th September
💱 Kraken dYdX Listing
dYdX is a decentralized Layer 2 trading platform built on Ethereum offering a range of financial products. dYdX’s native cryptocurrency, DYDX, is the platform’s governance token. Deposits and withdrawals are available starting now and trading will begin at approximately 15:30 UTC on September 14.
🇺🇸 US Inflation Data
The US consumer price index (CPI) will reveal how much prices increased last month. It will likely help shape the Fed’s plans next week when they discuss economic stimulus.
Wednesday, 15th September
🤝 Digital Asset Summit 2021
DAS is the institutionally focused crypto conference for asset managers and financial services professionals. Industry leaders from the world of finance and digital assets including Dan Morehead, Mark Yusko, and more will gather to discuss crypto from the perspective of industry practitioners.
Thursday, 16th September
🎮 Raydium NFT Drop
DropZone is an initiative by Raydium to promote the growth of NFTs on Solana while supporting project teams with the infrastructure needed to launch new collections. CyberSamurai, a project that consists of 5,000 unique algorithmically generated 8-bit Cyberpunk inspired Samurai Warriors will be the first NFT to launch on Raydium.
Friday, 17th September
🎧 Market Meditations Podcast #93: Alex Thorn
This week we welcome Alex Thorn, Head of Research at Galaxy Digital, a crypto-focused financial services firm with over $40 billion of assets under custody.
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🌎🧘♂️✍️ Stories in this newsletter were written by Kyle F., Misael Calleja, Nick T., Max P., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Gerasimos P.
Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.
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