Veteran Investor Bill Miller Reveals half his Net Worth is in Bitcoin and Crypto
While the general trajectory of crypo markets appears grim right now, there’s good reason to expect the market to experience a mean reversion before possibly rolling over again. Here’s my dispassionate take on a select number of cryptos.
Meanwhile, veteran investor Bill Miller said that Bitcoin is not just a hedge against inflation, but “an insurance policy against financial catastrophe”!
Let’s dig in.
Veteran Investor Bill Miller Reveals half his Net Worth is Invested in Bitcoin and other cryptos
Legendary investor Bill Miller revealed that half of is personal wealth is invested in bitcoin and other cryptocurrencies, which is in contrast to his own widely known advice that investors should allocate one or two percent of their portfolios to digital assets.
Read the full article here.
The purpose of this newsletter is to provide context to cryptocurrency markets. This analysis takes time to write-up and it’s released every Monday and Wednesday. I am not perfect and this is not a science — nor is this newsletter a signals service. While I cannot promise perfection I do my best to be honest and transparent.
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ETH Is only Bullish Above $4,000
While the pivotal $4,000 level was lost, Ethereum/Dollar maintained the weekly uptrend after bouncing from $2940. For what it’s worth, ETH/BTC also rejected from the highs after consolidation, with the pair falling below ₿0.07.
A retest of $4,000 would be a place for sellers to step in again, opening the door for bearish follow through after the relief rally.
The dump and weekly close below $4,000 (at $3,150) was a bearish setup, meaning rallies are likely to fail.
Having said that, key weekly indicators like the super-trend and 50-ema have been respected so far. Unlike BTC/USD, the pair hasn’t broken its September low yet. This means that ETH/USD is structurally within a weekly uptrend, despite having lost the important psychological level.
The caveat to this bullish hopium is that Ethereum appears to be following bitcoin with weaker impulses, and that’s not a good sign, historically. If Bitcoin nukes to $35,600 (for example), most altcoins (ethereum included) will suffer larger relative losses.
At the time of writing, ETH/USD recovered slightly to $3,300. This rally could last days and it would still be inconsequential for the bullish narrative until ETH/USD closes above $4,000 on a weekly basis. Until then, ETH is in a bearish posture. If the floor falls through, a breakdown to $2,400 and perhaps lower would be hard to ignore.
All in all, the case for a relief rally to the moving averages, and perhaps the pivot is reasonable. However, any rally needs to be taken within the context of broader market weakness until proven otherwise. The coming price-action (velocity and percentage gains) for the week will offer more insight into the relative strength and weakness of various assets, technically speaking. This is not the time to be complacent on rallies.
The Ugly Duckling Stays Ugly
Litecoin/Dollar is a mixed bag, as always.
On the one hand, Litecoin is a project worth following and the launch of omnilite (and an upcoming graphical user interface) for its DEX is very interesting. But on the other hand, the technical picture is consistently grim.
Notably, I have gone against my own decision to pay less attention to the coin and that’s probably out of stubbornness more so than anything else. Specifically, I’m as sure as I can be that there’s value in the ecosystem that has yet to be realised.
Technically, Litecoin/Dollar is at generational long-term support, as it traverses close to the 20-weekly exponential moving average. The coin is also at generational lows versus bitcoin.
The 200-EMA coincides with a trend which has half a decade worth of price-action.
On a more local landscape, LTC/USD found support at $120, just above the weekly super-trend. The coin is down 60% since Nov. and 70% since May 2021 — percentages reminiscent of previous bitcoin bear markets.
If bulls can reclaim $137 on a weekly basis, it’s possible that the current downtrend is a deviation within a large accumulation range (around $250-$137). Until $190 is reclaimed, Litecoin won’t be reaching escape velocity any time soon. At best, Litecoin is within neutral accumulation territory, and at worst the project is being selected out of the market.
Shifting gears, it’s worth noting the misplaced anger against litecoin.
As noted in prior coverage, it’s trendy to hate litecoin for no other reason than to perpetuate the tired old trend that started with Satoshi Lite ‘selling the top’ in 2017. In reality, all this means is that more coins are in the hands of normal people than ever before. isn’t this what decentralisation is all about?
Meanwhile, developers continue to work and build out the coin’s infrastructure. Some bitcoin-only puritans believe in a future where bitcoin has an absolute monopoly on scarcity. Imagine telling that to the precious metal’s market, or to collectible items markets. And bear in mind, crypto is just over a decade old, so the jury is still out on which projects survive, thrive and fade away. This means that litecoin hatred is nonsensical, and I say this as the next closest thing to a bitcoin puritan.
Litecoin is undervalued for what it brings to the table. The current risk-to-reward setup is also heavily skewed towards buyers in my estimation.
Compound Relief Rally?
Compound is eying a relief rally after being in a bear market since May 2021. Since the breakdown from $274, price has ranged between $179 and $250.
The bearish weekly super-trend hasn’t levelled off just yet, however, which means downside to $112 is possible. This scenario would most likely be spurred on by BTC/USD weakness. On a daily time-frame, upside is capped at $250, which if broken opens the door to $392 on a weekly time-frame.
To wrap things up, the weekly outlook for crypto is bearish but there’s an argument for a big percentage move higher (mean reversions), generally speaking. Prior support is assumed to be resistance until proven otherwise. As a side note, it’s normally those who stick around when the going gets tough that eventually reap the rewards. Those who want something for nothing are exit liquidity.
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Catch you later.
p.s. This is my opinion. It is not financial advice.
Read More: Ray Dalio says to minimize Cash and Bonds Exposure, and Increase inflation-hedge Assets like BTC
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