The Drip #7
Take a breather, look around, because history is unfolding right around you. You are in the largest altseason in recorded history! While that may seem scary to some, for the initiated and the prepared it is the opportunity of a lifetime. Let's breakdown the state of the market during altseason and where I see the biggest plays.
The Right Stuff
If you remember last week, we discussed how the money flows during an altseason which gives you a birds-eye view on how to allocate capital and position yourself to capture the investor momentum.
As of now we are in between phases 2 and 3, which means money is flowing between large cap altcoins (ETH/ADA/BNB) and mid-cap altcoins (OCEAN/SUSHI/AAVE). Soon, in a matter of days in fact, we will shift out of large caps completely and into mid-caps only. Instead of trying to capture the large cap gains, position yourself in the mid caps right now, and even some exposure to low caps already.
The largest plays ahead is undoubtedly DeFi. The largest plays within DeFi are undoubtedly projects in the ETH/BSC ecosystem. Here are my top picks with some technical analysis:
This is the $QNT chart on the daily. The current market cap is $472 million. The project aims to be the first blockchain operating system for blockchains to run, creating an interoperable environment.
The chart looks surprisingly similar to Cardano's chart. A massive run-up in January, then sideways consolidation for 3 months. Cardano just broke out of its consolidation to the upside, which validates our altseason 'flow-of-money' narrative because it is a large cap.
$QNT has yet to break out but because it is a solid project and a mid-cap I think a position in $QNT is a solid choice. The current price is down about 10% on the weekly, and 3% on the daily.
There really isn't going to be a better entry in my opinion. Set your stop loss below the nearest LH (lower-high) and run a fib-retracement to project profit-taking areas, as it will be in price discovery. See below:
This is the $BAND chart on the daily. $BAND is an oracle solutions provider that focuses on decentralized oracle pools and pool governance. As you can see, price is having much smaller and tighter pull backs every time it touches that neckline of $20.
This means price is coiling up and is ready for volatility. Market structure and the current narrative tell me this will be to the upside. The market structure is altseason and the flow into mid-caps, the current narrative is DeFi oracles. The large cap counterpart of $BAND, $LINK, is doing very well right now.
I would set a buy order above the neckline on this one, in case it breaks through again as I believe this will be the last time it fails to break through successfully. Set a stop loss at the previous low indicated by the last blue dip.
The BTC pairing looks even better in the long term:
The above chart shows a massive downtrend since DeFi summer of last year before Bitcoin took off to new all time highs. We're getting ready to breakout of a major pattern here as you can see price slowly building up to the previous high set in mid February.
This is the $BNT chart on the daily. $BNT is a liquidity aggregator for on-chain token conversion and makes it easier to swap tokens. As you can see, the price is in a symmetrical triangle which is a continuation pattern.
This means that the price will likely continue in the direction that it entered the pattern with. I drew a rectangle to show that we are in a choppy zone which we need to break out of to show some bullishness. Above that zone is the current double top before the all time highs, which could reject us back down to the top of the chop zone. I indicated with the line my projection of the price over the course of the next week or two.
I would place a buy order above the yellow dotted horizontal line with a stop loss on the bottom of the chop zone.
That's it for your Thursday Drip!