The Cryptocurrency Trading Journal

[Daal]

I need to be careful not to spread fud

I jumped on 1 passage, but there's a lot of confirmations that are needed before we declare it's a bear market

By the time these confirmations came out, the price will be dramatically different. Seems doubtful there is even a big edge on this stuff. Woo spend 90% of the time on the podcast describing what happened in the past be it in this crash or in previous years. Its cool to learn history and stuff but at the end of the day one needs something that actually has some leading predictive power and his on-chain coincident fud doesnt seem to be it

I will say this, I never thought much of Peter Mccormack but I will take my hat off for him, he called out Woo on him being a little weird and on the fence. Woo then proceeded to blame it all on his upcoming child and said everything was alright. Heck, I dont read Woo and I could tell something was off about his statements. This guy knows him and called him out as well.
Woo was trying to hedge himself by being on the fence but Mccormarck forced his hand, very nice

As far as your sales go, it looks like you ditched your plan to hold 10 BTC by panicking along with retail. In one hand, this is bad but in the other, since you have a record of being a kool aid drinker, you went to the another extreme. That is still out of balance but its better than in the past. I suspect the fact that you quit your job had more to do with these sales than any real 'analysis'. I'm not trying to be a dick, I really think a good investor has to analyze these sorts of tendencies in order to invest better. And he has to be honest with himself

 

[Daal]

Look guys @johnarb @Daal there's no reason why you can't have in a portfolio spec longs that you will sell and core longs that you will hold to 0.

This way you capture both short term movements and the longer possible uptrend.

Absolutely. To me, this balances the downside risks AND upside risks. In a world of low returns, balancing upside risks (the chance you will miss out on big returns) is something that the top callers dont do

 

[Daal]

I will say this about on-chain indicators, there might be some value on things like NUPL and SOPR because profits tend to influence people's psychology so it could be an indicator for future market action.
But at the same time, one needs to take an asteriod of salt because as the activity starts to shift from retail to institutions, the levels where you would get a signal on that stuff will change. I have a lot of experience trading retail driven stocks (OTC/Penny stocks and low float Nasdaqs) and retail trades with a lot more emotion. The up and down moves tend to be more extreme (more inneficient) because the average retail trader/investor is a complete moron. But the institutions dont tend to make these mistakes as often. I dont think there was many institutions selling BTC at $30,000, if any at all. They also have mandates, engage in rebalancing and have to report things to clients, so I bet the levels on NUPL and SOPR will change. NUPL actually peaked out before the extreme reading from the past, so that might be the first evidence of that. I dont think the on-chain gurus will make these sorts of adjustments

 

[Daal]

Novogratz: Institutional adoption takes time

 

[Specterx]

Novogratz: Institutional adoption takes time

I think we can draw two conclusions after the recent volatility in crypto:

1) Although the narrative was there, and the infrastructure of custodial services etc is largely in place, institutional sponsorship/participation in crypto is far less than everyone (including me) assumed. The fact is, there was no huge resting institutional buy order.

2) The recent huge drop (50% in ten days, and with ETH seeing its most volatile day ever on a percentage basis) is a death blow to further institutional adoption for a long period of time - at least a year and likely longer. Everyone who was a skeptic or fence-sitter will now step away from the market entirely, while everyone who bought over the last >3 months is showing large MtM losses.

On the other hand, if the price continues sliding to 10-20k or below it means that a future BTC ETF could have a much larger impact - becoming the trigger for a new bull run. Assuming, that is, that overall liquidity conditions at the time are supportive.

 

[Daal]

I think we can draw two conclusions after the recent volatility in crypto:

1) Although the narrative was there, and the infrastructure of custodial services etc is largely in place, institutional sponsorship/participation in crypto is far less than everyone (including me) assumed. The fact is, there was no huge resting institutional buy order.

Now you are sounding like the on-chain people, describing the present, none of this has any bearing on the future. The future is a situation where NGDP is growing at a 10% rate, inflation is going up, QE is still going on, the fiscal deficit is huge, debt to gdp is huge, we will have negative fed funds rates for quite some time and the fed said they will allow inflation to run hot for a while. In fact, we have a global situation where governments are carrying much higher fiscal risk than in the past. You think somehow none of this matters and people will just immediatly all buy all at once and reprice BTC to your price targets and thats is. Yeah, if we lived in a Eugene Fama world. I say this will drive a TREND of inflation protection, much like gold did in the 70's going from $35 to $800. Especially given how the USD is also likely to trend lower. Your 'liquidity theory' seems to be completely negated by the huge trends we have seen in all kinds of markets over the years, sometimes for more than one decade

2) The recent huge drop (50% in ten days, and with ETH seeing its most volatile day ever on a percentage basis) is a death blow to further institutional adoption for a long period of time - at least a year and likely longer. Everyone who was a skeptic or fence-sitter will now step away from the market entirely, while everyone who bought over the last >3 months is showing large MtM losses.

Only if they are ignorant, anyone that bothered to do research on BTC knows that such volatility is possible. Institutions actually bought while retail was selling
https://www.coindesk.com/institutional-bitcoin-buying-spiked-around-wednesdays-crash
"That was the largest single-day outflow from OTC addresses in 3.5 months, according to data tracked by Glassnode.". Plus the other piece I posted yesterday from the guy at Chainanalysis

On the other hand, if the price continues sliding to 10-20k or below it means that a future BTC ETF could have a much larger impact - becoming the trigger for a new bull run. Assuming, that is, that overall liquidity conditions at the time are supportive.

Well, good luck with these predictions. I'm certain you are not short as no one in their right mind would. Historically this type of price action wouldn't make any sense, as I explained yesterday. From a risk-reward perspective it also wouldn't make sense to institutions to let the price drop so low. I mean, at $15K, you are risking $15K to potentially make $100-$200-$300K and the institutions know this, so they will step in earlier. This is not solely retail driven market that hands out free money all the time
In previous years, they had all dismissed this as some retail bubble, but now they wised up. I bet Goldman wont shutdown their BTC OTC desk again, institutions LEARNED from their stupidity

 

[Daal]

Retail likes to buy when its fun to buy, when things are going up a lot and twitter is doing laser eyes. Hedge funds and asset managers will actually do some due dilligence and try to understand the market they are in. The first thing you notice when you analyze Bitcoin historically is that its a great buy when its down, and the more it is down the better the buy. Its like owning a quasi-perpetual call option on crypto optimism/inflation concerns.
Somehow, you think they will allow that call option to become ultra cheap in the context of QE+Negative Repression+Fiscal Stimulus+High Debt/GDP+Vaccination(Rising Velocity)+Record M2 Growth+etc
I dont believe that, its the coincident vs leading stuff again. Once the price changes, people's behavior change. You get BTC to $30K-$25K and funds come out, which then changes the statistics and leads to the coincident folks to change their minds
The Dalio crypto fund is not even out there, and he runs the largest hedge fund in the world, and somehow institutions are done buying? Nah

 

[johnarb]

Look guys @johnarb @Daal there's no reason why you can't have in a portfolio spec longs that you will sell and core longs that you will hold to 0.

This way you capture both short term movements and the longer possible uptrend.

That's pretty much how I feel about 10 BTC's. I will never sell those even in a bear market

The problem, or I should say without me being convinced it's a bear market, I'm still hodling other altcoins like DOT and CAKE (and SFUND)

These altcoins are not conviction holds for me and plan to sell all of them in a bear market, but I will re-enter DOT the soonest if I think we bottom

I cut the DOT position (4,000 coins to 2000 coins) yesterday I mentioned on another post

Also I have another 3.5 BTC's on the exchanges which will be sold if I think we're in a bear market

 

[johnarb]

As far as your sales go, it looks like you ditched your plan to hold 10 BTC by panicking along with retail.

No, I did not ditch that plan. I will hodl 10 BTC's through the bear market

I have another 3.5 btc's on exchanges that will be sold, but I am not convinced we are in a bear market

I suspect the fact that you quit your job had more to do with these sales than any real 'analysis'. I'm not trying to be a dick, I really think a good investor has to analyze these sorts of tendencies in order to invest better. And he has to be honest with himself

I de-risked as planned as I told you on previous posts and you told me I won't do it because I did not so in the past bear markets

I remember you said I won't sell at lower prices from the top as I would be a victim of price anchoring and I told you I'm built differently

I gave an example with Badger which I sold not at the top but on the way down, Badger was a 600% profit position that I started selling on the way down when it was 400% and going lower

Badger was only an example, there were many others

I looked at my paycheck every 2 weeks, extrapolated to 1 year, and so far, I've sold enough of the portfolio for significantly more than 10 years worth. Taxes will be painful next year, but so be it

You're not being a dick. At the end of the day, I have to be responsible for my family and no one else

If you want to criticize on both sides and all sides, that is your choice, this is only a message board

[edit: forgot to mention there's enough gaslighting on ET to provide power for bitcoin mining for a long time ]

 

[Specterx]

I'm certain you are not short as no one in their right mind would.

I'm not short BTC now, but it's definitely on my radar. It will probably be at least 6-8 weeks before I take action though and that's only if the market fails to reverse the drop, back above the 46k area.