Crypto space still looks very vulnerable | 29 Dec
29 Dec 2021 close: BEST is holding its own against a slowly eroding general crypto space lead by BTC and ETH.
BEST remained fairly steady both up and down as BTC led the market higher this week before turning down again. Price seems to be holding around the €0.94 handle. The 2022 Outlook for Bitpanda's native BEST token remains favourable, if only on a relative basis. As the crypto market matures very rapisly with the many more millions of new speculators feeling the pressure of everyday volatility there is a strong likelyhood that many of the very high volatility emerging tokens will slow down to more manageable ranges whilst Special purpose tokens like BEST could outperform the market structurally as they have real yield to offer and in different very marketable ways. No Change otherwise.
19 Dec 2021 close: Can BEST go 10x (or.. can BEST reach €9.00)? Yes it probably can in our view and in a semi-controlled logical way.
The reason is that Bitpanda is offering (future) benefits that other centralized or decentralized exchanges cannot meet. At least not at this moment including Binance.
With the introduction of the BEST 2.0 utility token on Monday 13 Dec at around midday it took a few hours for the market to become aware of the potential impact of the new reward formula as the announcement was made quietly on the Bitpanda blog with only a more formal notification sent out 5 hours later to account holders and BEST participants.
Within 45 hours of absorbing the news the BEST token rallied from a low of 0.8850 on Monday morning 13/12 to a high of 1.0700 on 15/12 with better volume and liquidity before it came crashing down again on profit taking and then following the broader crypto market in a sideways corrective mode.
We can make a quick comparison with the Binance BNB utility token that saw daylight in July 2017 at $0.00 soon trading at $0.10. One year later BNB traded at $15.00 and 2 years later at $30. Then in Febr 2021 BNB grew towards $51 and then skyrocketed towards $704 in May 2021, now trading around $515. This all happened on the back of spectular very active account holder growth.
Forward looking BEST will have 250 million tokens outstanding and BNB 100 million tokens, both controlled by the issuing company.
BEST has a stronger incentive programme with a potentially 2.5x higher yield, yet Bitpanda can only accept European clientele whereas Binance has allowed a worldwide audience to participate on the exchange with minimum compliance.
Bitpanda announced it has now well over 3M active accounts where Binance has already grown to near 30 milion accounts in 2021.
The two exchanges are different in many ways but the incentives and facilities offered by Bitpanda outrank those of Binance. And this includes some very smooth user interface applications offered by Bitpanda, even though there are small hitches from time to time, which they all have.
BNB is a success story having reached critical mass very quickly and where early ownership, say below $50, has reduced commission rates dramatically with BNB at $500+.
BEST only reached a fair bit of commission bonus using BEST for this purpose as it 10x'd in 2021.
The conservative view is that a centralized fully bank licensed exchange like Bitpanda will find more sympathy with monetary authorities, tax issues aside.
If both companies maintain the same growth ratio, BEST 2.0 being the more versatile token, should be 25x less than BNB. Simply put, the ratio of account holders = 10, times the ratio of tokens in circulation after all burns (2.5) = 25x.
$500/25=$20 BEST and that translates as a potential 10x for BEST from the present level. It means BEST has potential to grow fast where other tokens may even suffer in popularity.
There are many data variables in play as Bitpanda will eventually reach critical mass of account holders who opt to own at least a few thousand BEST and grossly maintain that. That critical mass may not even be that far away in time as long as all this analytical private data, not shared with the public, wlll not be released. Yet some interesting data may be made public in due course for legal reasons.
It doesn't mean either that, as we still expect may happen, get an even more broader crypto correction than the current 30% down from the peak at $3 Trillion market cap, BEST could not drop in high Beta with other major crypto's. Eventually BEST should find its own realisic level as it is a different animal alltogether with a different purpose than the likes of Bitcoin and ETH etc.
Technically it looks neutral. BEST wants to go down short term and looks rather promising longer term. A huge unexpected year end rally would be a bonus.
Besides our core precious metals allocation, we broadly stick with our core BEST position with a view to maybe release 10 to 20% as we approach this year's highs again sometime in the not too distant future. If the market tanks for whatever economic reasons, we may need to review our strategy.
BEST/EUR Risk Weight Position relative to Monthly, Weekly and Daily interval data
(Previous week in brackets)
|Bitpanda - BEST/EUR||Monthly||Weekly||Daily|
|Trend||↑ (↑)||↑ (↑)||↑ (↓)|
|34 (34)||58 (57)||32 (48)|
at current value
BITCOIN: BTC long is risking a further 75% decline
29 Dec 2021 close: We see no reason to move away from the technical status as previously discussed as we hold the preferred Irregular top scenario at $69k. Our everyday tools, Stochastic, RSI and MACD still favour a further price erosion as MOnthly long term risk weight has also turned down. Risk, for those remaining fully invested, is that this bearish scenario is very much in play still. In 'old Elliott wave' terms the Irregular top is more likely to be followed by a decline of more severe proportions than 'Wave a' from $64,900 to $28,800. Wave (c) might as well follow the golden Fibo rule of 1.618 x Wave (a) which indicates a possible decline to $10,600. It is not whether this scenario pens out to be true, but merely the risk factor being high enough to stay very alert. Total Crypto Market Cap shows the same technical behavior. Bitcoin maximalists must also feel some concern as price behavior has abandoned the going logarithmic uptrend seen the first 10 years. 'Anything that can go wrong will go wrong' may apply to El Salvador following the formal BTC legal tender adoption. Murphy's law that the market tried 40% higher but sofar failed to permanently hold the Sept 7 $50k level.
19 Dec 2021 close: Bitcoin is still leading the broader crypto market which is trying to find direction the last few days whilst trending down with some price consolidation along the way.
The most concerning technical picture right now is the Monthly long term risk weight based on MACD, RSI and Stochastic which is close to triggering bearish divergence. And if that only starts now the market could be in for a mirror image of what we saw at the start of 2021. We will only know with hindsight, but the technical risk picture is very clear and should not be dismissed. We still hold on to our Elliott type irregular correction prediction at the end of a super cycle uptrend with an orthodox high at 65k and an irregular peak at 69k on Nov 8 (see chart below). Unless the 69k ATH breaks relatively soon the most likely scenario is a much deeper correction caused by massive investor disappointment after 18 months filled with hype in mainstream and alternative media.