Weekly Digest: Chung's Picks of the Week (9/1)

Market hits max pain this week as market sentiment nears its all time low and Bitcoin sits near prices from January 2021.

By
Chung Yee
on
January 9, 2022
Category:
BSC News

Extreme Fear 

The crypto market took a hit far worse than other equity markets when the minutes of the December The US Federal Reserve (Fed) meeting were revealed. Investors shifted their portfolio allocation to assets that are deemed less risky and fear took a firm grip on the crypto market as retailers turn bearish. 

Source: Selling pressure seems to be abating but many investors are still cautious 

Many retailers are sceptical that there is more upside potential for Bitcoin ($BTC). When in doubt, having the right perspective is important. On January 1, 2021, Bitcoin was trading at $29,668. 

Source

In order to build the case for Bitcoin and the larger crypto market, the bull cycle is not over for a few reasons: 

  • The bull cycle often ends with a blow-off top
  • Bitcoin and Ethereum supply in exchanges continues to dry up
  • Non-exchange wallets are showing Bitcoin whales adding to their Bitcoin holdings
  • Fiat continues to flow into crypto exchanges 

Weekly Recap

Market Sentiment

Source
  • The market volatility has successfully shaken out some retailers.
  • The overall market sentiment has turned bearish.
  • Market volatility is expected to reduce and it is likely that a small relief rally may pan out in the middle of the week.
  • The broader crypto market will remain uncertain until the Fed move is priced-in. 
  • Recovery is expected to be slow and gradual until Bitcoin breaks bullish.
  • Maintaining the right perspective is important. Market participants are often engulfed in emotions and make hasty decisions.
Source: The start of Bitcoin’s rallies are often indicated by ‘extreme pessimism.'

Coins to Watch

  • Long term prospects: Polkadot($DOT), Terra ($LUNA), Avalanche ($AVAX), Cosmos ($ATOM), and THORChain($RUNE).
  • Good projects are developing in Polkadot after its successful parachain auction. This is a vote of confidence by the developers’ community.
  • The long term success of any network depends on the amount of activities on it.
Source: Polkadot development activity will definitely be reflected with positive price movement. 

Navigating 2022

2022 did not start with a bang, but it makes us reflect on why we are invested in the crypto market. Are we here solely for the gains, or are we here because we believe in the future that decentralization offers? Most of us are here for the gains, but many of us stayed after understanding how much crypto has to offer. 

It is a risky asset class, but the good risk-reward ratio makes it worthwhile. The market will test its participants time and again. Those shaken out will probably leave with some resentment towards crypto. The value that crypto brings is measured by more than the value of the JPEGs that sit in OpenSea. 

When in doubt, zoom out and ask if you really believe in the narrative of Bitcoin and Web 3.0. 

Source: The Internet struggled to make itself relevant, just like Bitcoin.

Come back next week for another iteration of Weekly Digest: Chung's Picks of the Week from BSC News. Be sure to follow Chung on Twitter.

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Chung Yee

Chung Yee has a legal background and has been involved in research works for the legal and compliance industry. Writing is his passion, centered on topics such as the blockchain and finance. His largest crypto holdings are Solana, Ethereum, and BNB Token.

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