Cardano Dan's Newsletter - Issue #62
Pause & Reflect
Quote of the Day
“Whenever you find yourself on the side of the majority, it is time to reform (or pause and reflect).”
— Mark Twain
Group think is dangerous. Group think in crypto is deadly. Through years of investing in and trading crypto, Mark Twain’s guidance has proven invaluable.
When an opinion gets crowded, it is almost certainly wrong. At the very least, it’s worth pausing to reflect and evaluate whether or not it is correct.
Crypto seems to be overly crowded in bearish sentiment right now. To be clear, there are some data driven folks that are not, but the overall sentiment is very negative right now. Time to pause and reflect. We’ll do that below.
Key Takeaways from the Past Week
Monday - Value & Control
On Monday, we started out the week considering how the more we value things outside of our control, the less control we have. We also pondered the news that Bitcoin was set to become legal Tender in El Salvador.
Wednesday - Nature’s Healing
Mid-week, we talked about how good nature can be for us and how recent market FUD might actually be positive news if we look below the surface.
Friday - Thought Life
On Friday, we touched on how important it is to spend time thinking about the things that are truly important to us and celebrated the news that smart contracts are running on the Alonzo testnet!
Technical Analysis
Weekly updates are all about zooming out. The entirety of the current bull run for ADA is shown below.
When zooming out in log view, I see two things:
Things look very bullish to me still, we look like we’re consolidating
If that’s wrong, there’s significant downside potential. Meaningful support (just from this chart) is far below current level
We’ve put down a lot of volume between where we are and $.90, so it would take a really strong bearish move to push us below those levels to the meaningful support much lower.
I continue to have a strong lean towards a continued bull run in this cycle.
Looking at the crypto majors performance since March 2020 lows…
Nothing new here, Cardano ADA remains in a league of its own.
Finally we look at our Bitcoin and Ethereum comparisons using market cap ratios.
This bull run has Cardano ADA looking so strong compared to BTC and ETH.
I am expecting a very strong move from BTC soon that may have ADA dropping in its BTC ratio in the very near term. But longer term, I’m expecting ADA to continue gaining against BTC and to break into market cap ratio discovery this bull market.
Against ETH, I’m expecting more immediate market cap ratio gains (remember, this is different than price gains). With the release of smart contracts on Cardano Mainnet coming the next few months, this would make sense. Also, the market cap ratio looks like it’s breaking out of a bull flag. Finally, the Ethereum network will begin burning ETH in July which is good for ETH price, but decreases overall supply and thereby puts downward pressure on overall market cap.
I think things in crypto are about to get fun again. That’s just me - you should do your own research!
I’ll leave you with a little research related to BTC…
(pardon the language below, but it’s good info)
That’s it for the weekly recap. Hope you all have a great rest of your weekend!
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This newsletter is for entertainment and educational purposes. I’m not a financial advisor and you should do your own research and consult a financial advisor before investing in cryptocurrencies