Polygon Bounces Off Golden Ratio

While the media has called this a "crypto winter" and even some experienced traders are calling for crypto to "go to zero", I've been trading based on nothing but the charts and it's paid off.

I bought Polygon at its Golden Ratio last month and the price bounced and broke above the EMA exp ribbon. It has more than doubled in a month. It's amazing how few people understand what the blockchain is, and even fewer who understand what Polygon is or why it will be valuable in the future. While I expect Polygon to go down to re-test the EMA before breaking above the non-log Fibonacci level (not pictured on this chart), I will add more and raise my stop loss.

When you hear people say "crypto will go to zero" you know we're close to a bottom. Sentiment does not get any more bearish than that. Whenever you hear people saying that price will go to zero, BUT the charts continue to show a log growth curve, wait until you no longer see capitulation candles (long upper wicks) and the price will rebound. Works almost every time and you can make tremendous amounts of money quickly. If you're wrong, then let your stop loss trigger. Limit loss, not profit.

Despite being in a "crypto winter", 100% of my crypto holdings are in the green, some by a lot. I did not start buying any crypto until June 2022 (I sold my original Bitcoin holding in the latter part of 2021 because there were too many people saying it's going to 100k, some were saying even 500k). With that type of mania, I knew it was time to sell. It's funny that some of the same "experts" on Trading View who were saying in November 2021 that crypto was blasting off to the moon, are now saying it's going to zero. Hearing them now say that price is going to zero means it's time to start buying. Knowing when to buy and sell is all in the charts. Also important is the crypto seasonality chart: bitcoinmonthlyreturn.com. We're coming up on August and September which tend to be more bearish than bullish. Have your stop losses in place.

The crypto fear and greed index is a great contrarian indicator too: alternative.me/crypt...ar-and-greed-index/. When sentiment remains suppressed for a prolonged period of time, that usually signals a bottom. All the weak hands, and leveraged accounts on margin would have sold by the time this sentiment shifts away from fear. By that time all the worthless tokens and worthless algorithms have gone to zero. Those who own quality crypto assets like BTC, ETH, SOL, MATIC, etc., should be happy for this crypto winter. When the tide goes out you will see who the real winners are.

Additionally, the crash in Bitcoin and the crypto capitalization is in large part due to monetary policy. Monetary tightening, and even worse, a reduction in the money supply (of the US dollar), causes all currency to crash relative to the US dollar. Money supply very rarely is reduced (as it stifles economic growth). Consumer spending is the heart of American economic growth so the Federal Reserve rarely finds itself in a scenario whereby reducing the money supply actually makes sense. The money supply typically grows exponentially. One can actually draw a linear log regression channel for the entire history of the US money supply and one will see that the money supply always remains in the channel (meaning it always has gone up exponentially). So knowing this means that, soon enough, the printing press will start up again, and more money will be printed exponentially and that this rare period when the money supply is being reduced is actually a rare buying opportunity for cryptocurrency. Anyone saying that we'll never get back to the level of cash infusion that we saw in 2020 clearly does not understand math or exponents. We will not only get back to that level of M2SL, but we'll fly past it in the future, (we just probably won't see that level of ROC in M2SL).

Finally, and importantly, not all crypto is the same. There are definitely many crypto tokens that actually will go to zero. The easiest way to shake out which crypto will go to the moon vs. go to zero is simply analyze the crypto relative to the US dollar. Doing so is actually simple on Trading View, just use the equation 1/(Insert Crypto Token/USD). This will show you which way the US dollar is moving relative to the value of that crypto. You want to see the USD moving down relative to the crypto. If the USD is moving up relative to the crypto, then that crypto is moving toward zero.

Here's an example of DOGE. Note that the USD is moving up relative to DOGE, which in turn means that the DOGE token is moving toward zero.

Seeing this chart and hearing Elon Musk support this token just makes me sad for everyone believing him. No one person alone can move the market. I always say that charts don't lie, and the charts are saying that DOGE tokens are becoming worthless.

Even more lucrative than comparing a crypto token to the US dollar, one can compare the crypto token to Bitcoin or to the SPY. If a crypto asset is growing in a log curve compared to another asset that is also growing in a log curve, well then, investing in that asset is likely going to make you wealthy quite fast. Check out Polygon (MATIC) relative to the SPY:

This might look like a confusing chart, but what it's actually showing is that Polygon is moving so fast relative to SPY that the ratio of SPY to it is approaching zero. From a mathematical perspective, that means that Polygon is growing according to a log growth curve relative to SPY. Since SPY itself grows according to a log growth curve relative to the US dollar, that means Polygon is an especially lucrative place to grow your US dollars. The fact that the EMA exp ribbon is resisting the upward movement of the relative price, suggests that the trend has not broken and that the log growth curve relative to SPY remains intact. If anything, the current levels are suggesting an extremely rare buying opportunity.

If there are any other like-minded traders out there who understand the blockchain and who understand everything I've said above please comment below so I can give you a follow. I need to connect with more like-minded traders who understand blockchain technology, dApps and their role as the building blocks of a decentralized augmented and virtual reality existence. Whereas if you disagree with the above analysis please leave a well-reasoned comment or chart below to argue your point!

Comment:

I want to correct my point about SPY moving in a log growth curve relative to the U.S. dollar. SPY actually moves exponentially up relative to the value of the U.S. dollar. So any asset that is outperforming SPY, will magnify your return in U.S. dollars even more. We're seeing this level of outperformance with BTC, ETH, SOL, MATIC, and several other cryptocurrencies.