Issue 7
November 4, 2022

Cosmos 2.0

Contents

Introduction

By Ivan Liljeqvist

Welcome back everybody. It’s been another exciting week in crypto and we’re pleased to bring you the next edition of The Blockchain Review. With the predictable build up to the FOMC meeting all eyes were once again on what Jerome Powell had to say. There’ve also been further mainstream adoption signals and this week it’s the Polygon Matic community which is particularly happy.

The FED interest rate hike came in at 75bps as was expected and Chairman Jerome Powells press conference and comments afterwards ended up spooking the markets a little. The message was clear- their prime concern is getting inflation under control and they’re not worried about over tightening the markets because they have tools like quantitative easing (aka. money printing) to get it going again. So there’s no indication of a policy pivot yet.

Crypto markets have held up comparatively well so far though which is great news. There’s been a lot of discussion around Elon Musk’s takeover of Twitter and what this could translate into for the crypto industry and mainstream adoption. Dogecoin isn’t the only altcoin which is outperforming the general crypto market with signs of mainstream adoption either.

Polygon Matic had a flurry of good news. Meta (formerly Facebook) announced Instagram will soon allow users to mint, buy and sell NFTs through an in-app toolkit. These NFTs will live on the Polygon PoS blockchain. The Digital Collectibles feature first allowed users to display their NFTs and now in selected countries they will be able to mint them. If this is successful it’s likely the feature will be further rolled out across jurisdictions.

JPMorgan also began using Polygon PoS this week and executed their first live trade on a public blockchain as part of the Singapore Central Bank’s pilot program ‘Project Guardian’ which is looking into the use of DeFi in the banking sector. Other financial institutions such as DBSBank and Marketnode are also involved.

The trade used a modified version of the AAVE protocol to complete a cross-currency transaction between tokenized Japanese Yen and tokenized Singapore Dollar. In addition they conducted a simulated trade of tokenized government bonds.

JPMorgan mentioned they had wanted to use Ethereum but didn’t because of the high fees incurred in multistage transactions. They are still open to continue thier research on other blockchains too. Still, what a great week for the Polygon Matic community. It’s a further boost to the blockchain following their selection in the Disney Accelerator Program earlier in the summer, when they were the only crypto entity to be chosen. 

Mainstream adoption is fantastic and this is exactly what we need to eventually get the bull market going again. However, we’ll always reiterate there’s no way to know for sure when we’ve reached the bottom though. Good risk management is always the priority, with diversification a way to spread risk and strategies like dollar cost averaging a way to average an entry level.

We’ll always provide you with our research to help with your education. We’ll keep close track of the main developments and evolution of the niches in blockchain so that you get the best of the new knowledge. When you’ve finished reading your report then please remember to fill out the feedback form, your research is valued and we’re always open to suggestions.

Cryptocurrency Market Overview and Analysis

By CTO Larsson

November 4th, 2022 | 09:00 UTC

For those new to my analysis, I do trend trading over long timeframes.

Global tech only has two outcomes: Giant success or catastrophic failure. Tech either does a 100x or goes to zero, with little in-between. Before reaching either end point, the asset price will trend for extended periods.

My process aims to give exposure during those periods of established trends. That way I can enter with more capital for any given risk, compared to a hold only approach. I don’t try to catch tops or bottoms. I don’t worry about intraday

movements. My style of analysis is not suitable for day traders or range traders. When it comes to tech, the big gains come from catching big moves over long periods
of time.

This is an analysis at one moment in time. Market structure can change in an instant. When presented with new information,
I will adjust my opinion accordingly.

Disclosure: I hold Bitcoin, Ethereum, Luna and Solana ETP price tracker certificates in ISK through my bank. Through company ownership I also hold small exposure to misc. additional tokens.

Trend Analysis

Bitcoin (BTC)

Bitcoin has not reversed its trend yet...

Ethereum (ETH)

Bitcoin has not reversed its trend yet...

Binance (BNB)

Bitcoin has not reversed its trend yet...

Bitcoin (DOMINANCE)

Bitcoin has not reversed its trend yet...

Bitcoin

(BTC) Could it be…

While Bitcoin trend hasn’t flipped up yet as proxied by Larsson Line, at least the trend is no longer down.

The second bit of good news is that the first resistance at $20,300 has flipped to support.

My plan remains unchanged: If we conclusively close above the right shoulder (candle close $22,400, wick $22,800) we have a bullish pattern in the chart. Depending a little on how we get there, I also see good chances that the trend flips up around that level. Then I’m game.

Someone more optimistically inclined could even gamble an entry already now with invalidation being a close sufficiently below the $18,600 support, which is a manageable 20% downside risk, because this chart looks better than it’s done in quite a while actually. The slight concern comes below.

BTC/USD, daily candles

The risk appetite in the markets depends a lot on DXY. One parabola can break only to be replaced by another parabola with a lesser slope. It’s a supplementary guide, not an exact science. 

If this parabola had been conclusively broken, I’d be ready to go big on Bitcoin already. But unfortunately at this point we can’t say that. The black parabola I drew first is still intact as of now.

DXY, daily candles
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