Cardano Dan's Newsletter - Issue #82

History Rhymes

Quote of the Day

“History doesn’t repeat itself, but it often rhymes.”

— Mark Twain

Author’s note: Sometimes when I pick a quote for a newsletter, there are arguments about who said it. This is one of those times. Mark Twain may not be the originator of this one, but he's the one this is most often attributed to.

History can be a good guide to the future.

Crypto markets are in the midst of a significant pullback, either in the middle of a bull cycle or the beginning of a bear market.

When I look to history to understand what’s happening, it looks to me like we’re in the middle of a bull market still. We’re only 62 days from the recent Cardano ADA high and ~50% off that high. These numbers rhyme with pullbacks during past bull markets.

Then when I consider where we are in the standard Bitcoin halving cycle and what happened with the Bitcoin hash rate as a result of the crypto crackdown in China, this current pullback makes even more sense.

It’s painful, yes, but it doesn’t mean the bull run is over. When you try to determine where we are in the cycle, keep in mind that history can be a good guide to the future.

Key Takeaways from the Past Week

Monday - Why Moon

On Monday, we talked about the reasons mankind pushes into challenges and celebrated the successful completion of the Trybbles Special Reveal Edition NFT sale. Series 1 of the Trybbles is coming soon and includes rare Trybbles!

Wednesday - Don’t Watch the Pot

Mid-week, we took note of the fact that watching crypto markets won’t make them go up any quicker and covered the release of the Nami Wallet by Alessandro Berry. We’re talking with Alessandro about connecting Nami Wallet as an authentication method within NFT Key!

Friday - Circumstances & Plans

On Friday, we observed that it’s foolish to try and make circumstances fit your plans. Rather, it’s best to have plans for all circumstances. We also touched base on Cardano news about algorithmic stablecoins.

Technical Analysis

Weekly updates are all about zooming out. Here’s a zoomed out Cardano ADA chart from the beginning of this bull cycle.

Here are my observations:

• Volume is REALLY low. We’re drifting lower as opposed to moving lower with conviction.

• We’re currently testing the 200D EMA. This can be a strong support level during bull runs.

• I see four clear “waves” and it looks to me like we’re completing a fourth wave and setting up for a fifth and final wave.

That’s my high level view. Even if I’m right, I can’t predict the exact low marking the end of Wave 4 and beginning of Wave 5.

But because I’m not trading the waves, that’s not important to me. I’m looking for the opportunity to exist a small portion of my investment near the end of Wave 5 (i.e. the end of this bull cycle). I say small because I’m invested in Cardano for way beyond the end of this cycle.

I could see a “capitulation” moment in the near future where lots of people give up hope for the bull cycle continuation, and then we move up from there.

Alternatively, it’s possible that we’ve already reached the end of this cycle and I missed my chance for a little profit taking, but I still don’t think so.

Looking at the crypto majors performance since March 2020 lows. Nothing new to see here. ADA still on top by far.

Finally we look at our Bitcoin and Ethereum comparisons using market cap ratios.

Nothing new here either. Cardano has proven to be a “major” cryptocurrency just like Bitcoin and Ethereum. You can see below that it’s handling this pullback the same way as those two while other “altcoins” suffer larger drops.

What I’m interested in is how Cardano ADA will perform when the market resumes it’s uptrend. My guess is that ADA will outperform and begin establishing new highs compared to Bitcoin and Ethereum. Keep in mind, Alonzo is coming soon.

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