A weekly Elliott Wave trading piece by Scott “Shooter” Henderson covering Crypto Currencies. Read my Future Of Money Primer and Using Crypto Trade Shots for the basics to follow along.
It’s time to seriously consider what percentage of your portfolio should be held in the Cryptoverse. Crypto is still very speculative, but, the risks and rewards are unprecedented. Travel with me as I navigate crypto, NFTs, DeFi and the Metaverse.
Shooter’s & Kirk Spano’s Crypto Thesis
The short story is that most cryptocurrencies are going to zero, but there will be survivors that rise to much higher price ranges. This is a journey of separating winners from losers.
We expect Bitcoin and Ethereum to be among the biggest, if not the biggest, winners. Along the way, we can trade the larger moves for added gains.
We also agree that NFTs and the Metaverse will have multitrillion dollar flows. That’s a total addressable market worth getting to know very well.
Kim Kardashian Charged!
Boy, is Gensler getting aggressive! You have to admit, though, Kim was easy pickings. The reality TV star agreed to pay a $1.26 million fine to the Securities and Exchange Commission to settle civil charges after she touted a crypto asset, EthereumMax, on Instagram.
In short, Kim Kardashian failed to disclose that she was paid a quarter of a million dollars to publish her Instagram post. Additionally, Kim agreed to cooperate with the SEC’s ongoing investigation and not promote crypto offerings for two years.
“This is a shot across the bow to crypto influencers who endorse investment opportunities without disclosure of earnings in the offering.” Clearly, Gensler took full advantage of Kim’s fame to make a statement to crypto influencers.
My2Cents
We could be stuck here for far longer than we would like. I’ve seen quite a few bases like this that have lasted a few years. Hopefully, that’s not the case. Let’s just keep trading around the edges.
Shooter’s Crypto Picks And Sector Stocks
My conviction ideas on crypto and stocks with crypto exposure. Based on my AI assisted proprietary Elliott Wave technical analysis. Remember to follow along in chat if you are going to swing trade a portion of your account. I recommend trading no more than 20% of your account.
Make sure to adhere to a rules based approach to trading using technical indicators. And, we highly recommend trailing stops and/or stops at preset technical levels.
Crypto Elliot Wave Counts Major Pairs-Grayscale Trusts
XBT/USD (BTCUSD) while it’s surely stagnating! Again, based on holding support alone, it weighs heavily on the bulls’ side. Bollinger Bands still imply that Bitcoin has more room on the downside. Harmonic still suggests an even lower possibility; somewhere between $3988 and less than $1000 is the range. I’m still looking for one more divergent lower low on the weekly. I don’t believe the Finetwitts’ excuse for a rally; the Fed will not raise by only 25 basis points at our next meeting. The Fed is even projecting 70 basis points. Another 75 basis point hike should get us below 8 day support. At that point, with a divergent lower low, I got interested again.
GBTC (Bitcoin ETF) Grayscale Bitcoin Trust (OTC GBTC) is an alternative for non-crypto account holders. See the prospectus.
I’m allocating 5% of my weekly gains in GBTC.
Should get a nice bounce soon!
ETH/USD is also stagnating after the merge. The same look as Bitcoin, and the fact that trend support has held is also a bias in favor of the bulls. Again, same Bitcoin, the Bollinger Bands have plenty of room to the downside. The main difference between Bitcoin that ETHE clearly has bearish look and is known for leading spot.
Equality is still way down there!
If you don’t have a crypto account, you can also buy Grayscale Ethereum Trust.
Grayscale Ethereum Trust (OTC ETHE) is an alternative for non-crypto account holders. See the perspectus.
Grayscale Ethereum Trust Daily Count (updated on 10/05/2022).
XRP A nice big legal win this week!
I raised LINK to a full allocation size on the Swift news. Continue with a 1/4 position size cost averaging in CRV, ADA!
Alt. Coins
LINK/USD The Swift news got us back to full position size on the allocation. Once target one is achieved and we back-test I’ll catch up with allocation I held back during the drawdown period.
CRV/USD Still holding the base.
ADA (Cardano) nice base!
Crypto Stocks
HIVE looks like we will chop around between the $4.50 and $3.00 range for a bit, so I opened a starter position in common shares @ 3.92 today and sold Dec. $4 covered calls for $1.05. If they get taken from me, it should be around an 18% yield. And if they don’t, I basically paid $3.37 a share.
RBLX Target is $33.63 Nov-Jan $45-40 puts depending on your risk threshold.
MARA: Does not support the Bitcoin count!
Like to learn more about Cryptocurrencies? Crash course on Bitcoin and Economy
Scott Henderson’s Risk Disclosure & Disclaimers
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