Don't Trust! Verify!

21.11.22 11:41 PM By Stormrake

As the market trades headline to headline on whether or not Genesis will file for bankruptcy or will find a way to raise $1 Billion USD, it's important to note in all of this mess that misplaced trust is what got us here. Let's understand the current circumstances and learn from them to avoid repeating the same mistakes.

The information contained here is for general information only. It should not be taken as constituting financial advice. Stormrake is not a financial adviser. You should consider seeking independent financial advice prior to making any personal investments.

The Truth Finds A Way

The problem we keep seeing in this space over and over again is the complete lack of transparency and honesty from crypto companies. This is the exact problem Satoshi Nakamoto set out to solve when he published the Bitcoin whitepaper, why trust when you can verify? There is absolutely zero need to believe a published corporate statement when you have the blockchain to show your solvency and assets.

Now we have Genesis, who over the span of a week went from public statements that said they had no material net exposure to FTX, all the way to we need $1 Billion USD to stay liquid and avoid bankruptcy. We no longer need to trust what any of these firms have to say, we simply need to back to our roots and ask for verification on-chain.

This leads us to the Grayscale Trust which claims to not disclose it's wallet address for "security purposes". There maybe some requirements in their terms & conditions to not disclose there wallet addresses but it's questionable to say that disclosing a public wallet address is a security risk. As the issue remains shrouded in a veil of corporate-speak, we will have to watch the charts to see how this unfolds.

Altcoin Watch: GMX

Earlier this month before the FTX saga had kicked off, we had highlighted that GMX will be an altcoin to watch as DEX narratives will soon be popular, especially with a pending Arbitrum airdrop. We didn't realise the circumstances that brought this on would be quite detrimental to the wider crypto industry. However, despite heightened volatility, GMX has held up incredibly well and will likely continue on holding steady as traders flock to the protocol to place their trades.

The key levels to watch are $50 even to the upside, as that is providing all the meaningful local resistance. To the downside, we will be watching the $35 handle for support. It is likely to trade within this wide range for sometime but a bullish catalyst can easily send GMX well above $50. This doesn't have to be good news though, as more centralised providers face issues, can cause GMX to catch a bid.

You can read more about GMX HERE.

BTC/USD key levels

Interactive chart: click on image for higher resolution

Bitcoin has managed to catch a bid at its local low for 2022, having had a small bounce from the $15,588 USD key level. For a continued move to the upside, we would like to see it reclaim $16,500 and trade above this level for a few days, if this occurs we can anticipate a retest of $17,189. To the downside, if it loses $15,588 then it's free fall to $14,444. If support doesn't manage to come in at the $14,444 key level, the likely zone to catch a bid will be $13,600.

ETH/USD key levels

Ethereum has still held up slightly better than Bitcoin, having not set a new low for the year. If ETH can creclaim $1,190 USD then it can quite quickly head to $1,333. The downside remains quite clear though, the relative strength can be a weakness, as investors look for any profits to start clawing back at a horrendous year. If it loses the pivotal $1,071 key level, it wouldn't be surprising to see a straight retest of the 2022 lows coming in at $886.

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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