Position Restructuring

Bitcoin vs. Ethereum

  • A Bitcoin-heavy portfolio is probably a winning portfolio
  • I am reducing my exposure to Ethereum and Eth-based tokens
    • Except for Polygon / MATIC
  • Ultimately, I believe my crypto portfolio will not have any Ethereum at all after the next year if the SEC continues on the path it’s on
  • The Layer 0 (or Layer 1) projects I am focused on are: Polkadot, Cosmos, Algorand, and Avalanche

Logic behind this portfolio structure:

  • After the FTX bankruptcy, I’m assuming the SEC will be cracking down hard on crypto projects, forcing many developers to register their tokens as securities
  • The SEC has already made it clear that Bitcoin is a commodity – not a security because it lacks any centralized authority steering the direction of the development of the product
  • Ethereum and Eth Tokens are hot on the SEC’s watchlist for regulation precisely because they’re very centralized and have staff that determine the future of the products
    • This is why my Eth position is so small; however, my Polygon position is significantly larger as a hedge on Eth since it is a Layer 2 Ethereum protocol
  • Polkadot, on the other hand, is in the process of being recognized as a software instead of a security from a legal perspective – which should theoretically place it in the same category as Bitcoin
    • Once this decision is solidified and codified by the SEC, it’s likely I will restructure my positions again and possibly eliminate Eth and Eth Tokens to expand my Polkadot and Bitcoin positions.

Charts

My thesis going into the winter months is as follows:

  • There should be one more leg down across crypto markets – I believe this should be bottom for the cycle, barring another black swan event
    • Bitcoin: $14k range
    • Polkadot: $4 range
    • Chainlink: low-$5 range
    • Polygon: 50-cent range
    • Algorand: 19-cent range
  • It’s also possible we get some good news related to the SEC or FTX and markets react favorably
    • This is why I am dollar cost averaging into these positions instead of going all-in

Bitcoin / $BTC

  • Don’t be fooled by the higher-lows just yet on the lower time frames
  • Price is getting squeezed lower between resistance and support
  • Price lows are working their way towards the $14k range

Polkadot / $DOT

  • Polkadot is still snaking through the downtrend
  • I will consider adding more to my position if price dips below $5 – until then, it’s just accumulation and I’ve finished building this position

Chainlink / $LINK

  • Chainlink has been one of the few token that has not been in a consistent downtrend since June
  • I am adding to my position in the lower band of the parallel channel

Polygon / $MATIC

  • Although Matic has been snaking through a parallel channel since July (similar to Chainlink), it’s still operating in an overall downtrend since Nov. 2021
  • Despite Matic’s recent performance, I believe there is still a lot of room to the downside before we see a bull run

Algorand / $ALGO

  • Algorand flipped support to resistance in a bearish breakdown we anticipated a week ago.
  • Next support line is at ~19 cents when price breaks down from the bear flag
The Rebel Economist
Author: The Rebel Economist

Civil Engineer // Aviator // Photographer // Avid Coffee Enthusiast // Your investment strategies could differ from mine based on your risk tolerances, research, and time horizon, so I encourage you to do your own research as information provided by The Rebel Economist or Breaking Metrics should never be considered financial advice.

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