Ah, macroeconomics. The Gen Ed course that nobody really cared about unless they were a numbers junkie looking to suck up to Venture Capitalists and Hedge Funds babies.
In the Crypto and NFT world, this is an important factor. Many investors subconsciously take these into play as we invest.
FUD, supply and demand, legislation and regulation all have major impacts on our precious Jpegs whether we like it or not.
A lot of us Art collectors have some previous experience in crypto trading, and/or the broader markets and legacy markets as well. Even dabbling in the S&P 500 we all have most likely had an interest in the markets at some point in our lives. Hence, why we are gambling our rent money on the next hype cartoon monkey.
Let’s take a look at how it REALLY affects us, and what its current situation looks like.
Let’s begin with the extreme Fear in the market. $BTC is trading around its lowest weekly levels since December 2020, and has lost a moving average level that typically defines a long-term bull or bear market putting us 99% likely into a bear market.
We have lost nearly 60% since ATH’s in $BTC which came in November of 2022, and have chopped sideways and down the last 7 months. Our precious alts have seen close to 75-80% retracement which still have further room for the downside, with not much significant upside potential in the short term until $BTC wakes up again.
Not spreading any sort of FUD, we need to be in a cautious state as investors who’s asset class also relies on an underlying asset price. Assets on assets on assets. As a reminder that while your Jpegs might be up 5-10x, you have to play a very fine line when the underlying asset, in our case the almighty Solana Token, is down. For example, a 10x move, on a - 50% asset is only a 5x gain. Which means a double, is simply a stablecoin…
The most likely case is further downside, but we could see more consolidation and sideways chop.
When it comes to NFTs, the sideways chop is typically when we get pockets of NFT pumps, similarly to Alt coins runs that we had seen in the past bull markets of 2013, and 2017. The last notable pump, was the Degods pump, that started early March and the end of April. Noting that this came after $BTC lost key support at 40k end of January, and chopped sideways until March.
Now since we have lost 30k, I expect more chop before the markets decide to go back up, or continue down.
This means the best strategy right now is not to do too much bag holding. No bag holding really at all. Take your profits as they come, and any significant gain you should strongly consider rotating a portion into stable coins to protect yourself against any further downside that we might see in Solana. At the very least profits sit in stables until we get further downside, or a better environment to buy into the solid projects where you can accumulate and hold for a longer time.