First off, Bitcoin is not dying. To kill something like Bitcoin is going to take a lot more than this. But this is a very healthy market correction. It’s beginning to feel like the diet where you can eat anything, as long as it’s spinach. Sure, it’s arguably healthy. But how long do you really want the ‘healthy thing’ to go on?
Since we eat our own cooking and adhere to our professed preferred methodology for investing in cryptocurrencies we maintain two separate portfolios – one for long term holding, and one for trading.
We also measure our success in how many BTC our combined portfolios are worth at the end of the day. The reasoning for this is hard for most new cryptocurrency traders to understand. And to be honest, on a day like today, when Bitcoin is down over 50% from its fiat all time high (ATH), this strategy can seem a bit quixotic at best. We promise to explain the reasoning behind this in another post soon. But suffice it to say, when you see your portfolio’s fiat balance drawdown as much as 40%, you can find small comfort in the fact that the BTC value of your portfolios are at their ATH. Hey, we’re winning at something!
Now, don’t misunderstand us. We do not hold only BTC. In fact, today wasn’t as bloody as it could have been because we have been shifting some of our underlying assets in both portfolios because of the repeated weakness we have been seeing in BTC. This includes balancing more of our long term holding portfolio into ETH because we were significantly overweight BTC and we feel that ETH will at least reach its previous BTC ATH of .15BTC. It is currently sitting at .11BTC. There are others we have there as well but that’s another post. This one is already going to be long enough.
For our trading portfolio we hold mostly altcoins. But this trading portfolio makes up less than 40% of our crypto holdings. And we spent today looking for others to add. And here we are going to talk about three – Chain Coin (CHC), LBRY Credits (LBC) and DigiByte (DGB). You can do your own FA research on them. Because today we are just going to talk about TA for them.
We chose these three because of their upside potential in what we believe to be the coming altcoin season (the time when bitcoin goes sideways or down and everyone piles into altcoins looking for the next bitcoin). Now, what you are about to read is NOT financial advice. We are merely doing and sharing our TA research and identifying possibilities for future small (right-sized) positions. Our goal is to find cryptocurrencies which have the potential for a parabolic rise based on previous behaviour when traded against BTC.
It is 161% off of its recent BTC high. Which would be a healthy move if it were to retest, and a breath of fresh air after the past few weeks.
But the real interesting part of CHC from a TA standpoint is if it breaks out towards its ATH in BTC.
Even if you miss the top (which you probably will), but can catch the deadcat bounce off the ATH, you would still be looking at unbelievable gains of 3,521% from the current price.
But before you go piling into CHC, take a look at the hidden bear div we also found in the current chart.
This would seem to indicate the CHC is not done falling yet. Or at least has mixed emotions about where to go in the near term. And if it continues its downtrend, the absolute historical support floor is 63% down from here.
So we are probably waiting and watching, until something changes.
LBRY Credits (LBC)
Next up is LBRY Credits (LBC). Again, do your FA here. From a TA perspective LBC is very similar to CHC. It is in a descending wedge off a recent run, and has the same bull div in the RSI which CHC had.
It also has a lot of potential from a BTC ATH retest perspective.
But with the same hidden bear div in the RSI as well.
Watchful waiting seems to be the name of the game for LBC as well.
Finally we have DGB. This one was a huge runner last altseason, and we picked up some bags of it when it below 200 sats. So now we are just watching and waiting to see if history repeats itself.
It has more of a consolidation pattern happening with a bullish RSI divergence.
It’s BTC ATH is another 400% past where we are today. With even a good 3x potential if you miss the high and sell the deadcat bounce.
But again, there’s a pesky bearish div in the RSI.
Waiting for Altcoin Season
So basically, we are waiting on all of these to perk up and have their day in the sun during the next altcoin season. In the next article we’ll go into why we weight the probability of another altcoin season favorably based on historical precendent.
One last note – with all three of these, we admit we are not the best at knowing the nuances of hidden RSI divergences. So we may have done this wrong. But at least it was better than watching king BTC getting kicked while it was down with Bloomberg and the rest of the mainstream media beside themselves with glee.
Stay safe out there everyone. Here be dragons.