Buying On a Trendline? Total Crypto Market Cap Chart | Crypto Technical Analysis | Token Metrics AMA
So let me just talk about some things in general, that weve learned and then ill. Let forrest just like give you some details about this chart. So, regarding evergrand weve heard that the fed is sitting around with a 5 trillion dollar bazooka. We just dont know how low equities have to go before they come in. Weve also heard that there are big players buying ever grant debt betting, that the peoples bank of china is going to have to bail. That out. Ive also seen a report that goldman sachs said. The problem is not ever grand in china, its its nine trillion dollars worth of debt from the cities. The municipal bonds of you know the different cities and municipalities in china, so every grand could trigger something big, so theres a lot of balanced news and a lot of confusion. Why am i telling you about confusion when you came to me for clarity, because its okay to do nothing, because, as forest will tell you right now, crypto is a lot closer to fair value than equities and forests give us the deals in this chart. Like you know what what would hap, what would you be doing on a down draft based on this chart? Yeah so anytime? This chart drops to the trend line right anytime, total cryptocurrency market cap drops to the trend line. I personally will be buying very heavily and i will be trying to buy uh strong projects that have been beat up really badly by either a black swan event or a bear market right.
So look historically. This is a linear trend line on a logarithmic scale. That right y axis is a logarithmic scale right when you have a linear trend line, moving up on a logarithmic scale. That equates to exponential growth. So if we flip this and we cant – because this is still image, but if we flip this off of the the logarithmic view and on to the the linear view, you would see it would just look exponential itd, be an exponential chart going up, uh and thats, Because crypto is really early on in its adoption curve and if you know anything about adoption, curves right and the network effect, the the theyre exponential in nature. So right now, crypto is in its exponential phase of growth right. So, just imagine imagine being able to just hop in long term and ride an exponential growth curve uh in cryptocurrency or any asset. Well, thats whats happening in cryptocurrency right now, its been going on for roughly seven years and yes, we do get these spikes right. These bull markets, where we get overvalued against the trend line but weve, never come down and broken the trend line with any real conviction. Weve tested, you can see there on the left. We tested it back in 2015, popped right back. On top of it, we had a pandemic crash that you know, crashed all markets, a black swan event that made us wick below it for for a month, but i mean by the time we actually closed, that candle.
It was pretty much on the trend line, maybe slightly below it, so weve never actually really broken this trend line. So it stands to reason that long term this trend line should hold for at least some time, or at least we would expect it to be real support now, eventually, right, we cant grow exponentially forever indefinitely right, thats, just not realistic right unless the fed just continues To print exponential money, but you know eventually, the party has to end, and eventually this will probably curve out into a logarithmic curve right, a logarithmic growth curve. But right now were in that exponential phase and we can benefit from learning from a seven to eight year old trend line that hasnt been violated. Yet, knowing that, if we drop down to this fair value, trendline its its the the buying opportunity of a lifetime or the buying opportunity of you know a market cycle right. But what this also shows is that historically weve been much higher in terms of the bubble. Were in yes were in a little bit of a bubble above this trendline right, everybody freaks out about the word bubble, like oh bubble, means its going to pop and its going to crash, and, yes, we are preparing ourselves for the potential black swan event right. There is a potential black swan event where this thing could wick right back down to this trend line it could it could fall right back down to 800 billion to 1.
2 trillion in total cryptocurrency market cap right? That would be roughly a 50 drop right. I dont know if you guys were here back in in in june when we actually saw the 50 drop. So if we got a 50 drop from where were at today in total cryptocurrency market cap, we could see an opportunity to actually buy this trend line. Now. On the flip side, right, we are in a bubble, but bubbles can go much higher. Look at the previous two bubbles. They went to 1400 and uh 1200 days to fair value as measured on the x axis right and you can see there at the on the right top right hand. Corner just got some arbitrary measurements of if, by the end of the year, right new years day. New years eve december 31st, if we were a thousand days to fair value which weve been 1400 in the past, weve been to 1200 in the past. If we were just a thousand days to fair value, we would be at almost a really yeah. Actually, almost exactly three times a little over three times: uh the total cryptocurrency market cap right right now, so we could still see a parabolic move right. We could still withstand a 3x move from here right, but we could also see a 50 drop so thats, roughly our upside and roughly our downside. Now, if you ask me in the long term, the risk to reward me ratio makes sense, so just keep in mind that if youre in crypto youre watching token metrics on youtube, youre a crypto token metrics subscriber youre in the right marketplace, youre in the right industry, Youre on the right youtube channel, youre doing the right things.
Yes, theres going to be some volatility on the way you know. So what if we see a 50 drop and everybodys portfolio is dropped by 70, were going to buy more on the trend line and were going to make so much money on the way back up uh to the next bubble. Over this trend line, we just have to be patient right, so youre in the right place. Youve come to the right channel. Tokenmetrics is a cryptocurrency investment platform that helps users leverage machine learning to become better crypto investors.