Market Outlook #84

Market Outlook #84

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This Post Has 2 Comments

  1. Cyril Cox

    Great post Nik! Love the reads.
    I’d be curious to see your thoughts on distribution levels and how to anticipate proper levels.
    I know taking profits along the way is key and following the richlist and price-action for distribution signs.
    I just feel clouded in my judgement due to lack of experience in this scene and frankly, due to my greed.

    Take for example Tellor, it’s reaching into terra incognita, yet the volume has shown recent massive accumulation (or distribution..?)
    Furthermore the richlist has suggested most addresses are distributing, except for the largest private address, it seems to have accumulated massively (before this recent spike up!).

    I’ve attached a chart sketching out some points. By means of your book and accumulated knowledge I could see it would be wise to take partial profits here, yet the signs seem paradoxical; I’d love your thoughts.

    Thanks mate, hugely appreciated!

    1. Nik

      Hey Cyril,

      So, a couple of points here:

      1). I see you’ve highlighted the $150mn traded volume on a single day whilst market cap was significantly lower. One thing to be mindful of is the exchanges on which that volume is being traded; for Tellor, the top exchanges are Hotbit, Bilaxy and Hoo (Whatever that is?) – clearly a lot of the volume being traded is wash and so the overall figures are often unreliable.
      2). I would absolutely be an advocate of taking partial profits along the way at predetermined levels – usually these are historical resistances and as you rightly noted the all-time high (which is now in the distance as TRB has continued to rally). Once you break a previous all-time high, I personally like to start shaving significant amounts off my position as soon as I see top addresses distributing heavily and volume on reliable exchanges beginning to decline despite price rallying. You should also take into account how much of a return you’ve made on the position *and* the project’s current market cap; when we look at Tellor, $21mn as a cap is decent but not necessarily a overblown euphoric peak – I’d imagine there’s plenty of room to continue rallying here, especially if more prominent exchanges are on-boarded. What I like to always be mindful of is opportunity cost; you may have made, for example, 5x on Tellor; what are the chances it rallies another 5x from here; is it more likely that other projects rally 5x? I’m always scaling out and rebalancing based on opportunity costs.

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