Welcome to a new week in crypto. We’re off to a great start, with Bitcoin reaching $57k in the early European hours today. What next and what’s the latest in the markets?
🇸🇻 Latest From El Salvador: Freedom or Oppression?
🚀 Technical Analysis & Our Preferred Altcoin Trading Strategy: BTC, ETH, SOL and AXS
🤝 Crypto ETF Approved… What Next? Check out our latest regulatory victory!
📅 Crypto Scan the Week Calendar: All important events you should know about this week
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🤨 Two Sides to Every Bitcoin
El Salvador has suffered its share of bumps along the road to Bitcoin adoption. In September, protestors burned Bitcoin ATMs in the streets while some citizens voiced their opposition to the country’s new legal tender.
The controversy continued last week as a cryptocurrency pioneer called out BTC maximalists for supporting mandatory adoption measures. Meanwhile, green crypto profits may help our four-legged friends stay healthy.
Ethereum founder Vitalik Buterin posted on reddit that making businesses accept any specific cryptocurrency is contrary to intrinsic crypto ideals.
El Salvadoran president Nayib Bukele announced on Saturday will use some of the $4 million gains from its BTC operations to build a veterinary hospital.
😃The government’s decision to invest part of their surplus into such a benevolent cause is a quick turnaround, considering the cryptocurrency only became legal tender just over a month ago. Meanwhile, the nation’s advancement of green mining energy via volcanoes began October 1st.
😢Vitalik has a point here. Of course, the idea of cryptocurrency is inexorably linked to financial freedom with power residing in the hands (and wallets) of the people.
A centralized authority like the El Salvadoran government forcing businesses to accept BTC as payment is at philosophical odds with forcing this compliance. However, with an internet penetration below the Latin American average at just over 50% of citizens having access to services, does the end justify the means?
🤔Change is always met with resistance in some form. In a perfect world, underdeveloped areas would embrace BTC with open arms. The transition would be smooth, and prosperity would flourish. In our less-than-perfect world hiccups exist.
El Salvador is pioneering its way into the great unknown while we wait and watch to see if Bitcoin leaves the country better than it found it.
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.
🎆 Sit Back & Relax: Crypto Cycles & Altcoin Trading Strategies
Market structure: looking strong and we’ve broken past the $53k level.
Remember, we were looking for the $48k level to break and the $50k level thereafter.
There may be further upside to $60k. So far, we look set to achieve that. That is, the uptrend has not retraced very much. However, only time will truly tell.
The next resistance we have coming up is at just below $60k.
Above $60k, we expect continuation.
Now is a good time to remind ourselves of the typical crypto money flow cycles. We see Bitcoin pump, followed by Ethereum and then Altcoins. We are currently seeing Bitcoin pump and so, we might expect to wait until we see Ethereum follow suit and to wait even longer before we see Altcoins pick up. Or, in other words, a “Bitcoin season” before some sort of “Alt season”.
✅ TIP: For more on crypto money cycles, check out our beginner’s guide on the topic here.
The crypto money flow cycle theory is especially obvious here, where the largest altcoin by market capitalization is at its lowest against BTC since the start of August!
Not quite as bullish as Bitcoin. Have rejected off the $3.6k resistance level.
Above $3.6k we expect continuation to $4k.
$4k is the big test and the breakout play for Ethereum.
We are paying close attention to alternative Layer 1s.
Solana is one of our favourites. With many projects developing on the blockchain.
Testing key support at $150.
Another Layer 1 that may see it’s turn to pump is Avalanche (AVAX). Great developments are also underway for this blockchain ecosystem.
AXS experienced a pump, broke out of the $80 resistance and nearly saw a 2x price increase.
Starting to retrace and present an interesting opportunity for Fibonacci scalp plays.
Currently at 0.382 which is a decent scalp bounce play. For instance, can enter a long position here targeting a 13% bounce to 0.236 level.
Similarly, can wait and consider an entry at the 0.5 level, which then targets a bounce to the 0.382 level.
This is one of our preferred Altcoin Trading Strategies.
✅ TIP: For more on Fibonacci Retracement, check out our beginner’s guide here.
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✅ Crypto-inspired ETF Approved
Crypto has been making headway in traditional markets. There has been much talk about bitcoin exchange-traded funds (ETF) filing to be approved. While many companies like MicroStrategy are exposed to bitcoin, there is not an ETF that currently gives sole exposure to bitcoin or other cryptos.
The SEC has just approved Volt’s Equity Crypto Stock ETF (ticker: BTCR).
While this is not the bitcoin ETF everyone has been waiting for, this is a step in the right direction. So if it is not a bitcoin ETF, what is this?
80% of the fund's assets will be invested in crypto stocks.
By crypto stocks, the fund will invest in either different companies with their assets in bitcoin or mining companies.
The remaining 20% will be invested in traditional stocks to offset risks.
The fund will hold no direct exposure to bitcoin, only indirect exposure.
Why is this important?
An ETF like this will only lead the way to direct-exposure ETFs in the future. Many, including SEC chair Gary Gensler, believe that a bitcoin ETF could happen by the end of this month.
Though one can invest [in traditional markets] in companies like MicroStrategy who have a large portion of net assets in bitcoin, an ETF such as this one will be useful to mitigate risk on the said company and shift most risk toward bitcoin.
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, 11th October
👥 Synopsis 2021
Synopsis 2021 is a 5-day international summit on the major cryptocurrency industry trends, including DeFi, NFTs, and a fresh approach to digital art. Over 60 leading industry experts from all over the world will ensure the full immersion in the world of decentralized finance and crypto economy.
Tuesday, 12th October
⚛️ Federal Court Meeting: Couple Who Sold Classified Information for Crypto
A couple in West Virginia will attend Federal Court on Tuesday. The couple sold classified information regarding the designs of nuclear powered warships to an individual they believed to represent a forgein nation for almost a year. However, the contact was an undercover FBI agent! One such transaction involved a “dead drop” to hide an SD card containing information inside half a peanut butter sandwich for which the agent paid a further $20,000 in crypto for decryption keys.
Wednesday, 13th October
✅ Strips Finance IDO
Backed by Multicoin Capital, Sequoia Capital India, Mechanism Capital, Crypto.com, among many others, Strips Finance is the first derivatives DEX to unlock fixed interest rates trading within the DeFi ecosystem. Strips Finance ($STRP) will be conducting an Initial Dex Offering (IDO) via MISO by Sushiswap for a duration of 24 hours starting on 13 October.
Thursday, 14th October
🇦🇪 World Blockchain Summit
The 19th Global Edition of the World Blockchain Summit series will take place in Dubai, UAE from 13 October to 14 October. This summit will feature a variety of presentations, case studies, and educational panels focused on teaching and empowering business owners from a variety of sectors to integrate blockchain technology into their current products.
Friday, 15th October
🎧 Market Meditations Podcast Release
Our next episode will be released on Friday! Tune in to start your weekend with us.
🌎🧘♂️✍️ 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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