TA: Bitcoin and the Cryptoverse
If you're ready to explore some of the coins in the digital token market, come on this journey with me.
Earlier this morning, I gave some brief technical thoughts on the “Magnificent Seven.” Between that article and my rant from last night, I think my frustrations are pretty clear. The stock market looks great having gone up for almost two straight weeks, but beneath the surface there are clearly some issues. First off, the broad market isn’t actually doing very well and it’s essentially 7 behemoth companies that are keeping the index up. The market breadth is terrible.
For me, I’m essentially seeing one of the worst possible outcomes play out in my equity portfolio. My stocks aren’t going up because I don’t hold the Magnificent Seven names and my market hedges are losing too because the Magnificent Seven keep pulling up the index. It feels like in the Big Short when Michael Burry got the fundamentals right but still lost anyway (until he didn’t).
How can the value of an insurance contract not be effected by the demise of the very thing it insures? - Michael Burry, The Big Short
I’m not saying I’m Michael Burry. And I do have some real bright spots in my broader investments; Bitcoin and some of my choice cryptos are ripping. Back when I was running the BlockChain Reaction service through Seeking Alpha, I was doing deeper research on many of the coins in the crypto market.
My gut feeling has been the overwhelming majority of cryptos would fail but that years from now we’d look back at the crypto boom similarly to the dot com bubble. Some of these things will survive and produce massive gains. I still believe that, though watching Bitcoin dominance completely wreck the broad market hasn’t been fun. It’s actually very similar to what is currently happening in equities. The big names are making moves, but a lot of the smaller stuff isn’t keeping up.
Despite that, my theory that this market does in fact have smaller names that will outperform Bitcoin longer term may not be off base. In this post, we’ll look at Bitcoin’s chart and try to make sense of why it’s moving to the degree that it is. We’ll also look at 4 altcoins I have owned that are ripping and I’ll detail exactly how I’m playing those moves right now.
Finally, I now own two cryptos that I never held during the BlockChain Reaction era and I’ll tell you which ones.
Ready? Let’s dive in.
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