Exploring A Potentially Exponential Adoption Rate – Issue 5 (free with Special Reports sign-up)

A weekly news and trading piece by Scott “Shooter” Henderson covering crypto currencies.

Kirk & Shooter’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.

In the News

Here’s what caught our attention this week…

Percent Supply in Profits

The below graph doe’s a fantastic job at showing who is parting ways with their coins and where spends are taking place to gauged fear and greed. Meanwhile, according to Glassnode. The daily loss value is running about $750 million and is comparable to the May- July 2021 lows. So, were finding a base again and will probably launch early just like is past drawdowns. You can read the full article here.

Historic Adoption Rate is on the Horizon

Adoption rates of cryptocurrencies and the internet. As we dig into methodology on estimating adoption rates all we need to do is look at history for some insight. Shooter feels the best way to calculate adoption rates is to use known internet users divided by the active crypto wallets. To date this seems to be the most accurate method to project future cryptocurrencies adoption rates. At the current rate future adoption rates should be at least 3x from here.

What is PTE?

PTE (or “pay-to-Earn”) The idea of earning money through video games’ in-game economies is not new. As long as game economies have existed, players have found ways to make money. 

What is Defi?

DeFi (or “decentralized finance”) is a sector term for financial services on the blockchains, primarily Ethereum. The idea of DeFi, is to create the ability to do most things that banks support and more — lend, borrow, earn interest, buy insurance, trade, etc. — it’s fast and doesn’t require paperwork to complete a transaction. Just like crypto as a whole, the DeFi concept is a global, operating on a peer-to-peer network, in an open to all decentralized concept.  

What are NFT’s?

NFT’s (or “non-fungible tokens”) are the latest crypto phenomenon that transform digital works of art and other collectibles into unique one-of-a-kind, verifiable assets that are easy to trade on the blockchain. Christie’s auction house sold the first-ever NFT artwork. Beeple sold a collage of images for a staggering $69.3 million and even Crypto Kitty has a collection.

What is the Metaverse?

The Metaverse is a digital world, where users interact with each other much like real life yet in a virtual environment. You use an avatar versus your person. One neat feature is that you get the best of both worlds, business, pleasure, social, and even gaming. Some Metaverse crypto and stocks are pure plays, that is, companies who do nothing but the metaverse. Others are hardware companies that already have successful businesses but we’ve found they will likely benefit from a new revenue stream. In many instances, the metaverse requires the use of augmented reality (AR) or virtual reality (VR) headsets. Software companies can also be metaverse stocks. Several growth stocks are poised to benefit from the metaverse trend, while other stocks are already members of the Tech universe with history and new technology. 

Shooter’s Quiet Mind / Watch List

Note: We will be adding crypto MANA, FLOW next week. RBLX chart is already posted at the bottom of the article. FB, NVDA, U, MTTR, META, while MSFT is creating its own Metaverse through Microsoft Teams users can create a digital representation of themselves using Microsoft Mesh. And recently GOOG launched cloud support for a microservices on GKE for its digital cash management platform. Then roomer has it that AAPL acquisitions VR and AR start-ups is directly targeting augmented reality and is set to compete directly FB Oculus VR headsets. I delayed most of these postings a week because of the drawdown. All of these plays have Metaverse exposure. So, continue to check back or ask in chat about our take on these crypto plays.

Shooter’s Crypto Picks and sector Stocks

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.

Follow along in chat if you are going to swing trade a portion of your account. We recommend starting with trading 5% or less of your total portfolio and no more than 20% even as you gain experience.

Continue to scale in small on all entries!

“Next Entry Window Long label” or “Set-up Long Label”.

It time to seriously consider what percentage of your portfolio should be held in the Cryptoverse. Crypto is still very speculative. However, the risk rewards is unprecedented. Stay tuned as I jump into Defi, Pay-to-Earn gaming and others shinning stars in the new year.

USER GUIDE

Crypto Elliot Wave Counts / Set-ups / Next Entries Long or Short

XBT/USD Bitcoin closed the week at $38461.60. While we opened $661 lower than last week $42,972.95 continued to showed some relative strength vs. equities. The count has reset suggesting the drawdown will likely continue to maybe $28742.25. I’d be trimming hear! Note: I added a 90 minute charts so you could clearly see the legs down.

Bitcoin / US Dollar Pair Monthly Chart
Bitcoin / US Dollar Pair Weekly Chart
Bitcoin / US Dollar Pair Daily Chart
Bitcoin / US Dollar Pair 90 minute Chart

ETH/USD Talk about a flush! I lowered the NEXT ENTRY LONG to $2226.16. Also moved the fibs to better adjust for this Flat that look like it will dominate here. This is a basing pattern, so my thoughts are the were finding a base to launch from.

If you don’t have a Crypto account you can also buy Grayscale ETHE this is the prospectus.

Ethereum / US Dollar Pair Monthly Chart
Ethereum / US Dollar Pair Weekly Chart
Ethereum / US Dollar Pair Daily Chart

CRV/USD We were stopped looking for the Next Entry Long is $2.559 now. Use these lows to start building a position by scaling in using cost averaging. I don’t think we take out the Speedline but with these market conditions we could. S

Curve DAO Token / US Dollar Pair Monthly Chart
Curve DAO Token / US Dollar Pair Weekly Chart
Curve DAO Token / US Dollar Pair Daily Chart

AXS/USD Next Entry Window Long is now $35.877. The Stop is $14.537. This also reset the levels to the upside. Again, use cost avg. to build a position once we reach $35.

AXES US Dollar Pair Monthly Chart
AXES US Dollar Pair Weekly Chart
AXES US Dollar Pair Daily Chart

SAND/USD Next Entry Window Long is now $1.9798. The Stop is $0.5811. This also reset the levels to the upside. Again, use cost avg. to build a position once we reach $35.

SANDBOX / US Dollar Pair Monthly Chart
SANDBOX / US Dollar Pair Weekly Chart
SANDBOX / US Dollar Pair Daily Chart

Metaverse Contenders

Roblox (RBLX) This online gaming platform is down 24.74% in the past month. Earnings are Feb. 15th. Though, I’m not an earnings player this has been a favorite child of traders so I suspect we see some type of run into earnings. Stay tuned it chat. This one is on deck!

ROBLOX Corp Weekly Chart
ROBLOX Corp Weekly Chart

Good Reads

The Future if Crypto Banking

CTS Article Archive

Scott Henderson’s Risk Disclosure & Disclaimers

Follow Shooter on Twitter @swingtradenotes for his quick thoughts.