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TFIN September-October Analysis Report Part 1

For the past two months, I was closely monitoring BTC moves using technical analysis, fundamental and quantitative analysis, as well as less known and tested methods. Unfortunately, there are no clear signals on the market direction for October, but it’s not as important as you might think – I am planning to make money regardless of the market direction. Before jumping into my plans, we need to analyze the current market situation. So what should we know?

  • Data shows that October is the most volatile month on the market. This means that we can easily see 10-25% price changes in Bitcoin this month. Given the current price, it means that Bitcoin can move anywhere from 37 to 57k range
  • Lots of doom and gloom from various economists and “Reputable experts”. That being said, they were saying the same in August and September. Despite occasional hiccups and 5% market corrections, overall global markets keep moving. I keep hearing that  Evergrande can lead to a series of bankruptcies of businesses in China and investment funds worldwide, as well as possible default of the US government on its debt. I am almost certain that none of these will happen this year- despite recent inflation, lockdowns, energy crisis, unemployment rise, and commodities shortage, world economics has demonstrated surprising elasticity and ability to adapt, hence I dismiss doom and gloom predictions and actually anticipate quite a bright future ahead of us. Between April-June I was quite confident in a serious market correction that would throw BTC and world markets into a free fall, but despite shortages, debts, monstrous inflation we are still here, watching BTC rallying over 50k, and stock markets reaching their ATH. Will that last forever? Absolutely not, but it seems like 2022 will be another bullish year, because institutional investors continue to accumulate BTC, ETH and other tokens.
  • According to the report from WSJ, Stablecoin issuers including Tether and Circle could soon be subject to bank-like regulations. This is a double-edged sword. On one hand, we might see some significant crackdowns on stablecoins, on the other hand, we might see the incorporation of Stablecoins into the banking system, leading to a Bitcoin surge.

So what does it mean for Cryptomarket?

  • If the market won’t stagnate or enter a bearish phase, ETH is likely to go over 8k in 2022, hence it’s a good idea to re-enter ETH if it moves below $2000.
  • BTC continues to hit resistance at the 48-50k range, which prevents BTC from further advancement. To ensure further bullish move, BTC needs to move above 50k (on 1D graph) and hit the 56-57k USD zone. If BTC fails to stay over the 50k resistance level on a weekly graph, we might see a sharp decline back to 40-42k.
  • Despite anticipated October corrections, it’s unlikely that price would go lower than 28-31k USD range – this is my red line. In case of an unprecedented “Black swan” event, BTC should drop and stabilize around 37-40k. Again, if this will happen, it likely will bounce back within weeks.
  • Unless we will have some major “black swan” event, BTC should reach ATH either by January or May 2022.

My current positions and analysis:

  • Most of you know that I made some great gains from Cardano (ADA) and HODL this asset for a long time. Everyone is waiting for Cardano to take off in October-November, after the full launch of smart contracts (called Alonzo), however, I am not so optimistic about Cardano as its ecosystem is small, they have a small developer pool and Cardano is losing its steam. I sold 20% of all my ADA for $3 each. Buyback plans: $1.60 and below. If the price won’t go below $1.80 that’s okay too, I still have plenty of tokens. I plan to exit at $4 and $8
  • Pancakeswap – I have somewhere around 426 staked tokens (~8000 USD), with approximately 57 of them generated from farming (~1k USD). Tokens are stored in the pool, with a juicy stacking of 70-90% APR. Considering that my initial investment already doubled, by next August I hope to double the number of tokens. CAKE market capitalization peaked at 7 billion earlier this May. Currently, CAKE capitalization is at $5.4 billion, which means that we still got some space for growth. So far, CAKE offers the best staking rewards, but it might not be the best long-term hold, and I will sell 35% of my tokens at $30
  • Solano: In my opinion, it’s a great project, however, its price is unlikely to go more than 400% in the following months. Just a few weeks ago, Grayscale added Solana’s token to its large-cap crypto fund – $494 million Digital Large Cap Fund closed last Friday with a 3.24% SOL position. You can also earn 6-7% APR if you stake Solano, hence I recommend to HODL it if you already have SOL tokens, but would avoid buying new tokens, unless the price would move below $74
  • Tezos: Another decent project, although it’s close to ATH value at the moment. The best entry price for Tezos remains in the $2 – $4 range. Token offers a lucrative 5 to 7% APR if you stake XTZ, although I wouldn’t recommend buying Tezos at this moment. Exit point: $14. Long-term exit point: $21
  • Helium is another long-term project that is focused on creating decentralized wireless networks using cryptocurrency. So far, they were able to deploy over 200 thousand hotspots transmitting low-frequency data around the world – and most of this growth has happened over the last few months. It was recently announced that the network is going to support 5G infrastructure, increasing its capacity. Overall, in my opinion, this can be a solid x5 project. Great entry price $12 – $15, decent entry price: $18. Mid to long-term exit price: $80 – $100 (2022-2023).
  • dYdX is a decentralized margin trading protocol built on the Ethereum blockchain. The protocol allows users to lend, borrow and make bets on the future price of crypto assets through its decentralized exchange (DEX), and its ultimate goal is to bring trading tools normally found in traditional markets, such as forex and stocks, to the blockchain environment. It offers one significant advantage: The layer-2 scaling solution, which allows platform users to execute trades with zero gas costs, lower trading fees, and reduced minimum trade sizes. I personally do not hold this asset, mainly for two reasons: it’s on the ETH platform, and it has serious competition. That being said, a small allocation of money towards this DEX token is unlikely to hurt. Good entry price: $11 – $15 per DYDX governance token. Exit: $44-$50

Additional tips:

Cardano doesn’t have a solid DeFI ecosystem, but if we will look at other blockchains, it’s clear that DeFI DEX AMM tokens give solid returns – CakeSwap, Uniswap, Sushi, etc. The good thing is that Cardano is still in its early DeFi stages and there are no functional AMM exchanges, which opens opportunities for those, who want to enter the market early. So far, we know only about DEX AMM on Cardano:

1. https://cardax.io/ Not much to say yet about this project, besides that they are aiming to be the largest DEX on Cardano network.

2. Cardaswap.finance  – Uniswap on Cardano chain. They closed pre-sale and are currently working on the delivery. The project looks weak and I am not sure if it’s even genuine.

3.  Sundae Swaphttps://sundaeswap.finance/ probably the strongest candidate for being “Cakeswap of Cardano”. The project hasn’t been launched yet but if you are interested in DeFi farming on Cardano chain, I would definitely follow them.

 

Summary: BTC has all chances to reach up to $66k by the end of this year, and possibly 100k in 2022. Either way, it’s a good idea to keep some cash ready to enter positions wisely, and then ride the 2022 bull. I have no doubts that October is going to be a rollercoaster, and we should be ready for some unexpected corrections as well as sudden price surges -treat them calmly, as Bitcoin is set for another bullish run.

Tokens that I will review in part 2: SRM, LUNA, SECRET, VECHAIN, VRA

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