🚀Dear Valued Subscribers,
Welcome to another exciting week filled with compelling topics and investment insights. In this newsletter, we're delving into key areas that have been making waves in various markets. Here's a sneak peek into the topics we'll be exploring:
Bitcoin ETF Approved… What This Means For Crypto
Understanding The Different Sectors In Crypto
Crypto Projects To Look At
Will The Housing Market Improve For New Homebuyers in 2024?
So folks, strap in as we have a lot to cover as we dive into the materials for this week's newsletter!
Bitcoin SPOT ETF APPROVED… Why Has Price Come Down Since?
The Reaction:
After the much anticipated Bitcoin Spot ETFs were approved (11 to be exact) price initially soared as high as $49,000. Almost as quickly as it got there, it reversed, and has been pulling back, reaching a low thus far at about $38,500.
If price had been pumping for months in anticipation, how is it possible that the speculation of the news drove the price more than the confirmation of the news? Many are asking this question, but I am here to tell you that this is perfectly normal, and even expected in many cases.
To understand why the news wasn’t enough to get Bitcoin back into the $50,000’s or even $60,000’s price range, let's consider a few possibilities that could all be true…
Buy the rumor, sell the news: Having been navigating many different markets for many years, I have seen this happen over and over again. Oftentimes speculation of big events causes the masses to get in on an investment opportunity early. As the hype builds, so does the amount of retail investors buying into the positions. As the price climbs, more and more people fomo in, and then when the news finally is confirmed, there is no one left (or willing) to buy at the current levels, mostly because the masses are already invested. So what happens? Price begins to stall, and people begin to take small profits. Thus, this could be a classic example of buying the rumor, selling the news.
Bitcoin was DUE for a small correction: Since September of 2023, Bitcoin had pumped about 95%, with no major pull backs along the way. For bigger investors, this could mark a significant time to remove some of their risk by taking some profits off the table. Thus, this could be a simple result of how markets tend to work.
Bigger Players Want In: Now that the Bitcoin Spot ETF has been approved by the SEC, many of the big players who have been on the sidelines (due to a lack of prior clarity on this asset class) probably want in on Bitcoin. I find it very hard to believe that big investors putting millions of dollars into this market are going to be willing to buy at the prices that retail investors were FOMOing into. So while I can’t confirm this theory, it is entirely plausible that Bitcoin cools off, and even continues to pullback, until the halving to allow bigger investors to enter their positions.
What Do The Technicals Say About Bitcoin?
Currently, Bitcoin broke the line to hold which was $41,500, and upon retesting that zone, it failed to get back into the structure. After failing the re-test, Bitcoin made a new low at about 38,500, as you can see below:
You can see that bitcoin had been holding that line as support throughout the last couple of months of price action, meaning that each time it has gotten there, it has received a bounce. Most recently, Bitcoin failed to bounce from support and broke down below it. In the first episode of my Crypto Trends Podcast, I predicted a $37-$38,000 price point for Bitcoin fairly quickly if that support line was broken. Additionally, I shared my belief that Bitcoin could fall as low as $32,000 in this correction. While this may seem like a bad thing, I view it as a gift from the crypto gods because it may be the last time we’ll see buying prices this good again…
Keep an eye out for this scenario, and I’ll keep you posted on its progress!
The Key To Maximizing Profits In A Crypto Bull Market: Diversification!
Understanding The Crypto Ecosystem:
While most people associate Bitcoin, Ethereum, and maybe a couple of other coins with crypto, there is so much more to it. While Bitcoin is king, and Ethereum is next in line to BTC, people often forget that the underlying technology is solving many different types of real world problems. Whether its data privacy, supply chain management, video gaming, or central banking, these blockchains all fall within a sector in the overarching ecosystem. To put it plainly, blockchain/crypto is the overarching solar system, and each of the planets in that solar system are the sectors that each crypto belongs to!
In these bull markets, money comes flooding into the hottest sectors, and that's how coins that you’ve seemingly never heard of become talking points at the dinner table overnight. To be able to find these coins before they move, it’s imperative that you understand which sectors will have the most buzz around them.
Fortunately you are reading this newsletter, and I will show you which three sectors are my favorite within crypto RIGHT NOW!
Top 3 Sectors:
Crypto Gaming: The gaming industry consists of billions of active daily players, and contributed to 135 billion dollars in revenue in 2022, a figure which has grown substantially year over year. Blockchain being integrated into gaming infrastructure seems like a match made in heaven to me. One of the many things that blockchain can do for gaming is provide ownership through the play-2-own model. This enables players to unlock unique features in-game through NFTs. These NFT’s can then be transferred out of the game, to be sold, stored, or used elsewhere. What a cool use-case!
Three Projects That I Love:
Nakamoto Games (NAKA)
ImmutableX (IMX)
Beam (BEAM)
Crypto + Artificial Intelligence: The two hottest emerging technologies throughout the last few years have undoubtedly been blockchain and Ai. Ai has single handedly caused a new boom in the stock market in 2023, as players like Nvidia and Microsoft have leveraged that technology to enhance everything about it. With a crypto bull market right around the corner, many blockchain companies are integrating Ai into their core technology, and this will be a MAJOR narrative in the next bull market.
Three Projects That I Love:
FetchAi (FET)
Ocean Protocol (OCEAN)
Verasity (VRA)
Decentralized Finance: The ecosystem of cryptocurrencies has a lot of new narratives, but it's good to blend in the established sectors as well. Decentralized Finance (DeFi) is probably the most established sector in crypto, with some of the most established cryptos in the game like Ethereum, Solana, and Avalanche. While these cryptos aren’t hidden secrets, there will be a lot of new players such as XDC, and Correum, to name a couple that I like. The future of Decentralized Applications (Dapps) is here, and I would highly recommend looking into the opportunities that this sector will offer during the next bull market!
Three Projects That I Love:
Solana (SOL)
Avalanche (AVAX)
XDC Network (XDC)
Will The Challenges That New Homebuyers Faced In 2023 Ease In 2024?
As the FED has announced its plans to begin cutting rates in 2024, sentiment in the housing market began to shift. It’s no secret that 2023 was extremely brutal, but to truly analyze if 2024 will be any better, we must first understand why 2023 was so brutal…
The main reason that the housing market was so brutal in 2023 (with 30-year mortgage rates hitting a high of 7.79% in October of 2023) was largely due to the FEDs approach of lowering inflation through the raising of interest rates. But if the FED stops raising rates, and even starts cutting rates as they announced they would in 2024, will that help get things under control?
My answer… not exactly.
When the FED starts cutting rates, that will likely ease the 30-year mortgage rates to lower levels. Since this is something that most new homebuyers have been waiting for, it will likely cause a frenzy of buying.
While this may seem like a positive thing for the housing market, we must remember that housing stock has been extremely scarce. Thus, if scarcity remains the same, and demand greatly rises, home prices will likely shoot up. So while mortgage rates may ease, the conditions for new homebuyers would likely remain as challenging…
This may leave you wondering what it will take for the housing market to recover… let’s see what the experts are saying…
Economist at First American Financial Corporation Mark Fleming predicts a "flat stretch" for the housing market in 2024. After the extremes of 2020-2021 being too hot and 2023 being too cold, 2024 is not expected to strike the right balance yet.
Conclusion: Navigating the real estate landscape in 2024 continues to be challenging. The combination of high mortgage rates, low housing stock, and affordability concerns keeps home prices high. Despite potential shifts in the market, achieving the right balance remains elusive, leaving many aspiring homeowners struggling to enter the housing market.
A Slow Start To 2024 For Stocks… Will It Continue?
The S&P 500 kicked off the start of 2024 with its first red weekly close in 9 weeks, which had many people disappointed with its start. Since then it has recovered, and is slightly up on its monthly candle at the time of writing. It’s important to remember to zoom out on charts like this, and realize that anything that rallies for nine weeks straight could be subject to a small pullback, or at the very least, a cool down to rebuild its strength.
The question then is whether stocks are cooling off to build the strength for a bigger move up, or if they in fact are losing strength on this current run, or whether it needs a deeper pull back to attract more buyers
Book Quote of the week: Think and Grow Rich (by: Napolean Hill)
“There is one quality which one must possess to win, and that is definiteness of purpose, the knowledge of what one wants, and a burning desire to possess it.”
I love this quote and its elegance. Have a wonderful weekend.