The Only Value Investing Crypto Newsletter | 100% hype free

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CHEAT SHEET

(You can print this out at work to follow along.)

Last night Bitcoin ran up to $32,927 and our daily resistance on yesterday’s cheat sheet was $32,800.

What We Are Watching

Out of the 8000+ tokens listed on coingecko. The 4 we follow for fundamental reasons were in the top 16 gainers over the past 7 days. We are glad to see the markets honing in on quality tokens after the irrational exuberance in the spring that boosted useless tokens based on MEMEs to rise into the top 10 by marketcap.

We further breakdown our case for these cryptos here : What We Are Watching

News About What We Are Watching

• SUSHI - Binance US to list SUSHI token.

• LUNA - RenBridge now supports Terra’s LUNA. Enabling LUNA to be move across various blockchains.

• MATIC - Wyre live on Polygon allows users to onramp fiat into USDC on Polygon.

• AAVE - We’ve still heard nothing from AAVE since the rAAVE.

TAKE ME TO (BTC) MAXI TOWN

This is a more complicated one, but the points are simple.

Below 200 Day EMA

The price is still below the 200 Day EMA. If a bull run is going to start the price needs to move above the 200 EMA and hold it as support.

Declining Volume

Looking at the volume you can see the price rally from October 2020 until Jan 2021 was paired with increasing volume. Then from Jan 2021 until May the price rally was paired with declining volume. When volume is declining it can indicate a trend is exhausting and the opposite is true when volume rises with a trend. You can see this during May where the rapid price decline had increasing volume. However, ever since the rapid sell off on May 19th the volume has been declining. The may be a sign that the current downward trend is near exhaustion.

RSI Declining Resistance

One last thing. The Bitcoin Daily RSI has been in decline at a steady rate since January 2021. The price rise this week has resulted in the RSI break the declining resistance line for the first time in 7 months. In order for this breakout to be confirmed the price must move up quickly in the next week. While there are many signs pointing to a reversal this does not mean we don’t continue to chop sideways or decline further. I wont be bearish until the price breaks the $28,500 support and I am not bullish until the price goes above the 200 day EMA.

Possible Course of Action

• If you got long this week keep going with a tight stop loss.

• If you are on the sidelines wait for the price to break $28,500 to scale into a short or move above the 200 day EMA to scale into a long.

Price Action Summary

The Bulls’ Defense:

• RSI has moved above declining resistance

• Down trend appears exhausted with declining volume

The Bears’ Prosecution:

• Price remains below 200 Day Moving Average

• Price was not been able to break and stay above daily resistance level.

Recent News

• Busta Rhymes, pleased with the B-word conference, buys Bitcoin.

• Jack Dorsey says Bitcoin will be a big part of Twitter’s future.

• Bitcoin ATMs to be installed at thousands of Circle K locations.

ETH SHY BOY ZONE

ETH is back above the 200 Day EMA. It has paused at $2050 the same resistance it stalled at in late June. For upward price movement to continue ETH needs to stay above the 200 Day EMA. After that the next important level of resistance to break is $2150 (bright green line on chart).

Possible Course of Action

• If you are already long you can put a tight stop loss on your position and wait.

• If you are on the sidelines wait for the price to break below the 200 day EMA to scale into a short or move above $2150 to scale into a long.

The Bulls’ Defense:

• Price above 200 day EMA

• Daily RSI points to potential Triple Bottom.

The Bears’ Prosecution:

• Price below major support at $2,150.

• Multi-month down trend still intact

Recent News

• Reddit announces they will use Ethereum’s Layer 2 to scale their community points tokens.

• JP Morgan Gives Wealth Management Clients Access to Bitcoin, Ethereum Funds

• How Ethereum Miners Could Exploit the Network and How to Fix It

Congratulations! You bought it! Now here’s what you bought actually does…

Internet Computer Coin: ICP.

By the Numbers: ICP is $33.72 USD with a 24-hour trading volume of $177,210,287 USD. Internet Computer is down 1.6% in the last 24 hours. The current ranking by market cap is #23. It has a circulating supply of 136,899,213 ICP coins and a maximum supply of 469,213,710 ICP coins.

Foot Gun #1: This coin, which has dropped in price by over 90% since its debut just 60 or so days ago, has a max supply of 469mm. The circulating supply is 136mm. Thus the potential for future dilution that could result in a further 50% loss in value for ICP if outside buyers with new money do not buy the newly minted coins.

Given that fact whatever the pitch here is, it better be tony the frosted flakes tiger style grrreeeeeaat!!!

The Claim: The Internet Computer is the world’s first blockchain that runs at web speed with unbounded capacity. It also represents the third major blockchain innovation, alongside Bitcoin and Ethereum — a blockchain computer that scales smart contract computation and data, runs them at web speed, processes and stores data efficiently, and provides powerful software frameworks to developers. By making this possible, the Internet Computer enables the complete reimagination of software — providing a revolutionary new way to build tokenized internet services, pan-industry platforms, decentralized financial systems, and even traditional enterprise systems and websites.

Foot Guns: Just stop at “world’s first blockchain.” We have identified an ongoing perpetual footgun in the form of “this is new,” or “this does what something established does well” but better or different. Its not even that. Its also not the third blockchain, its not “major.” Add a few useful in some cases, but meaningless in most phrases: “reimagining software,” “revolutionary” new way to build.

Look - the cryptosphere is ruled ultimately by software nerds. If there was a “revolutionary” new way to build applications on yet another blockchain, do you think the price of the token associated with that would have dropped 90% on the ICO (initial coin offering)?

It is also notable that this tradable token associated with this project was backed by some of the best and brightest VC funds: Andreessen, Polychain, etc. It goes to show you that VC’s don’t always get it right.

Foot Gun: sometimes people just look and see something is down by 90% and buy it. ICP could potentially rally off this price. We wouldn’t short it for that reason (is there anywhere to actually short it in the US?). Just the same way it doesn’t pay very often to short a stock that is down 90% because the most you can make is 100% if it goes to zero and the maximum you can loose is theoretically infinite. But, as legendary short seller Jim Chanos is keen to note, “when’s the last time you saw a stock go up infinitely?”

If this coin is still of interest, feel free to read through the hype here.

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