Market Overview and Next Steps

My aim is to transform all of you into crypto experts.

The last issue was about why decentralization (of power) is important.

This issue is a general market overview.

The Story So Far

crypto has just dumped. There are many theories out there, but here is one anonymous guy’s post on 4chan by (supposedly) the perpetrator. It has since been deleted but here’s an archive

Another Youtuber got it right.
His Wyckoff Distribution fits the pattern a bit too well, so I wouldn’t believe in it too much, but the theory of Wyckoff’s Composite Man is useful. Always assume someone is out to get you, because when it comes to money, that’s true.

Who might that be, you ask? Subscribe to BowTied Bull they have a good understanding of high finance. Not an affiliate link, they don’t even know I exist.

Overall sentiment is still bullish, because the last bullrun was comparatively short and the dump was artificial. Expect normal people to hesitate a bit, which is a good chance to accumulate.

Market Overview

BTC: just dumped, good time to accumulate. Expect conservative next target of 70,000 USD.
ETH: grew much bigger this bullrun, what with DeFi and NFT sectors helping it. Has trouble servicing this many users, causing transaction fees to balloon up to 200USDT at times. This scares away new users who don’t have that much money. Although Layer 2 scaling solutions are coming like Polygon/MATIC (they just batch up transactions and periodically report back to Ethereum), they don’t know about each other.

Explained simply: you have 1 blockchain that has 1 truth (Ethereum, let’s call it Layer 1). Since it’s not fast enough you start other blockchains (call them Layer 2) that batch transactions up and submit a summary to Layer 1 periodically. Problem is of course keeping things in sync, because there are multiple Layer 2 blockchains, and they don’t know what happened within each one. And they report to Layer 1 only periodically.

This was known a long time ago but Ethereum’s upgrade to make it faster (ETH2) is late. So this year some Ethereum competitors have eaten its lunch. We talked about decentralization last issue and why it’s important (like Bitcoin community, Ethereum people value decentralization as an ideal). These new projects don’t value decentralization as much.

BSC (Binance Smart Chain): an Ethereum by any other name, but controlled entirely by one company (Binance). Gained a lot of traction because it’s well integrated with Binance and transactions are cheap.
SOL (Solana): Haven’t heard of it before but apparently it has gained some traction. Of course it is faster than Ethereum and perhaps easier to program for. But there are many projects with such features, so I don’t know why this one got more traction. Most of the tokens are owned by early investors and founders (an exception for the crypto space, but becoming more common these days)

Ethereum competitors that made big noises in 2017, 2018 have not been as successful as BSC.
NEO: remember? lol
TRON: lollol.
XTZ (Tezos): real work going on, but still haven’t heard of anybody building on top of it
EOS: along with Tezos, one of the richest competitors. looks like money can’t buy everything
ADA (Cardano): founder Charles Hoskinson has a very successful Youtube channel, so it wasn’t so affected by the dump. However, nobody’s actually building anything on top of Cardano (check their forums and smart contract dev subforum)
ALGO (Algorand): I know it works, but is anything running on it?
AVAX (Avalanche): made a good splash this year with Pangolin, their answer to Uniswap. But they have to do more than that.
AE (aeternity): used to work there, sad story.

And these were just the legit projects with hardworking, very smart people behind them (including me!).

Overall ETH is facing competition, but still is a long way from getting displaced. The Satoshi Nakamoto = God; Vitalik Buterin = Jesus meme is still true.

Action Steps
Since the market just dumped, we have a 2nd chance at entry. Look for coins that have been flat (still relatively cheap) the entire time. The market only pays attention to coins that have pumped. We are going to go early into cheap coins. Since we know that DeFi is going to be big, look for flat coins in DeFi. For more suggestions and a different take, try BowTiedBull’s article.

Important to make sure they’re legit. Rule: if any project advertises how much money it can make you instead of how it’s going to change the world/why there is a place for them in the world, it’s a scam.

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