Hello everyone,
I am pleased to present my second investor letter specializing in crypto-assets. The goal is to inform you about the current state of the crypto-asset market from my perspective. This letter is not investment advice!
Over the past few weeks, the market has dropped sharply following several «bad news» events in the ecosystem, as well as a fading of the bullish euphoria.
First of all, we had the announcement from Elon Musk saying that he would no longer accept BTC as a payment method to buy Tesla vehicles. He justified this by saying that he had «realized» a negative environmental impact of the Bitcoin mining industry.
Then, we had yet another announcement from the Chinese government about the ban on trading crypto-assets in China. It should also be noted that China has been looking to adopt its own digital Yuan on a private blockchain for some time now.
Furthermore, following Elon Musk's tweet, numerous debates began regarding the environmental impact of the Bitcoin mining industry.
Following this wave of market declines, a cascade of leveraged position liquidations amplified the drop. We are currently in a period of extreme fear, whereas a few weeks ago we were in extreme euphoria.
This event is quite rare and specific because all Bitcoin health indicators are in the green, but we have entered a short-term «mini bear market» from a technical analysis perspective. In the medium term we are neutral, and in the long term we are still in a bull market.
However, a break in the Bitcoin price below the 30,000 $ floor would be a sign of a reversal of the long-term upward trend.
If we break the 45,000 $ ceiling, we could continue on our long-term bull market.
The number of new entrants to the market is still increasing and we are currently at levels at which many institutional investors have entered. Moreover, we have been able to see the company MicroStrategy continue to buy Bitcoins. We also had a tweet from Elon Musk announcing that the company Tesla had not sold any Bitcoin.
Institutional investors continue to accumulate Bitcoins and are not selling. The «weaker hands» are selling and the «stronger hands» are buying. Many new entrants, especially retail investors, found themselves at a loss following this significant downward wave.
Based on numerous sources on the Bitcoin blockchain, we can assume that the price of BTC is currently inexpensive compared to its current fundamentals.
Institutional investors continue to accumulate Bitcoin and are not selling. «Weaker hands» are selling and «stronger hands» are buying. Many new entrants, especially retail investors, found themselves at a loss following this significant downward wave.
According to many sources on the Bitcoin blockchain, we can assume that the price of BTC is currently inexpensive relative to its fundamentals.
From my perspective, we could see the price of Bitcoin fluctuate in a range around 35,000 $ to 45,000 $ for several weeks or months until the trend turns back up for a new bullish leg.
Many altcoins (crypto-assets other than BTC) have lost a lot of value following the deflation of this euphoric trend that we could see in all mainstream media in recent months.
This recent drop also stems from the meteoric rise we've had in recent months for both BTC and Altcoins.
During this decline of nearly 55 % in the price of Bitcoin from its peak, our portfolios experienced a latent decline of approximately 22 %. This occurred following the strong performance of the past few months.
If you have any questions, comments, or would like to know more about our service, please feel free to contact us: crypto.assets.manage@gmail.com
— Warning —
This is not investment advice, no one can predict the future.
You are solely responsible for your own investment decisions.
We are not responsible for any losses resulting from a decision made based on the information in this letter.
