With inflation continuing to plague markets, based on the most recent CPI numbers, the Fed is most likely going to continue hiking interest rates, which is bearish for the markets.
In my last weekly market outlook video, I mentioned that the long-term trend is still bearish, and we should either by waiting to short, or short-term trading positions if going long (to ride the bullish momentum early last week).
Now that the market bears are back in full force, we have started to initiate short positions, and I expect to be adding more short positions on pullbacks as prices continue to fall.
Stay tuned for more updates in our “Daily Trading Signals” Telegram channel!
Weekly Market Outlook (12 September 2022)
? FOMC on 21 Sept – more rate hikes coming
? Ethereum merge in a few days
? Long-term bearish for stocks, crypto, REITs, commods, etc
? Short-term bullishness (swing trading opportunities)
Weekly Portfolio Update
Weekly Portfolio Update (12 September 2022)
Not having much positions now as I am overseas, and the market direction is not very clear yet.
Forex & Commodities Market Highlights
AUDUSD Crossing 0.69137
Aussie vs. US Dollar
Break swing high
NZDCHF Crossing 0.58200
NZ Dollar vs. Swiss France
TP1 for short positions
Inflation is STILL rising.
8.3% CPI even with a 10.6% decline in the gas index.
After the large sell-off last week in stocks and crypto, it won’t be surprising if we see a short-tern rebound the upcoming week.
Overall, the long-term trend is still bearish.
The key figure to watch is still inflation, and how aggressively the Fed will hike rates on 21 September.
Many of short trades have hit TP1 or TP2, so it was a good idea to take profits before the rebound happened.
Now, we can either trade the short-term momentum, or just stand aside and wait for the long-term bear trend to resume before taking new short positions.
I have placed all the triggers and trade alerts in my “Daily Trading Signals”, so you will know when it happens. Stay tuned!
Weekly Market Outlook (02 September 2022)
? FOMC on 21 Sept – more rate hikes coming
? Bullish for USD
? Bearish for stocks, crypto, REITs, commods, etc
Weekly Portfolio Update
Weekly Portfolio Update (02 September 2022)
Recession Results: How investment categories perform going into a recession, and during it.
As I mentioned in my “Weekly Market Outlook” video for subscribers, almost every asset class is very bearish, as you can see from my “Weekly Portfolio Update” snapshot.
Every week, I publish my full portfolio allocation so there is 100% transparency on my positions and holdings.
At that point, I was short on equities, REITs, and crypto, and all these have plunged a lot since the Fed announced that it will continue to fight inflation (aka. hike rates).
As we continue to stack positions, this could turn out to be the biggest trade of the year if prices continue to drop and hit new lows. I will be monitoring and placing alerts for new shorting opportunities.
As mentioned in the video, USD is currently the strongest currency.
Following up on the US Dollar Index (DXY), it is forming a small bullish base, getting ready to push new highs.
Following up with the H4 chart of GBPCHF, we can see that shortly after our short entry, prices started to fall.
We are nearing TP1 soon, which is at the prior swing lows, after which we can close half and hold the remaining half for TP2.
Following up on the USDSGD, it has hit our TP level, and for now, we can either stay out or stay short, since the short term price momentum is bearish.
Stock & Bond Market Highlights
Both the S&P 500 (US500) and NASDAQ 100 (US100) have broken below their support levels, and are looking bearish.
Look to initiate or add short positions on pullbacks.
Following up on the NASDAQ 100 (US100) and S&P 500 (US500), both have continue to fall as predicted, after we entered our short positions (circled red).
Both are nearing TP1, and hopefully will reach TP2 by the end of the year. ????
Stocks plummeted Friday after Federal Reserve Chair Jerome Powell said in his Jackson Hole speech the central bank won’t back off in its fight against rapid inflation.
Taking profit on my Bitcoin (BTCUSD) shorts to wait for the next pullback to short again! ????
Taking profit on my Ethereum (ETHUSD) shorts to wait for a next pullback to short again! ????
After a long wait on Ethereum (ETHUSD) and Bitcoin (BTCUSD), it finally broke out of the bear flag pattern and made new swing lows.
Will it head all the way down to test new lows? I will continue holding my short positions, and add more as price continues to decline.
Looks like it will be an exciting weekend! ????
In last week’s market outlook video, I mentioned that Crypto was very bearish, and I had huge short positions on Ethereum (ETHUSD) and Bitcoin (BTCUSD).
It was followed by a huge crash, which I took profits and posted the screenshots.
Now, we are seeing some bearish pin bars, but I will wait for prices to break below yesterday’s low before initiating new shorts.
https://synapsetrading.com/wp-content/uploads/2022/09/Tokyo-Japan.jpg720960Spencer Lihttps://synapsetrading.com/wp-content/uploads/2019/10/logo.jpgSpencer Li2022-09-03 01:14:392022-09-03 01:15:24Weekly Market Wrap: Will We Be Seeing New Lows Very Soon?
https://synapsetrading.com/wp-content/uploads/2022/09/central-asia-travelling-trader.png15242054Spencer Lihttps://synapsetrading.com/wp-content/uploads/2019/10/logo.jpgSpencer Li2022-09-02 12:03:262022-12-16 16:35:09The Travelling Trader: Time to Explore Central Asia!
Did you know that you can generate additional passive income just by staking your existing crypto holdings?
Proof of stake (PoS) is an alternative to proof of work (PoW) that is being increasingly used in crypto blockchains, where nodes are rewarded for validating transactions instead of miners working to earn coins through their processing power.
The good news is that the process tends to be much easier than mining and also generates passive income on the side.
So, how do you stake your crypto?
In this blog post, I will explain what this new proof of stake system is all about, and how you can stake your crypto on this system to generate passive income.
DeFi represents the shift from traditional, centralized financial systems to peer-to-peer finance enabled by decentralized technologies built on the Ethereum blockchain.
DeFi protocols offer a wide range of services, from lending and borrowing platforms to stablecoins and tokenized BTC.
Using DeFi protocols, you can earn interest on your crypto, trade with leverage, and do much more. And with over $63 billion worth of value locked in Ethereum smart contracts, it is clear that DeFi is here to stay.
With this increased ease of access to investment opportunities, there are more and more DeFi projects being created every day.
Some notable examples include MakerDAO Dai stablecoin, Augur prediction market platform, and Compound (COMP) leveraged cryptocurrency interest accounts.
Basic PoS Terminology
Before we dive any deeper, let’s go over some basic PoS terminology:
A stake is simply the amount of cryptocurrency you have staked.
The stakeholder is the person who stakes their cryptocurrency.
A validator is a node that creates new blocks on the blockchain.
The block reward is the amount of cryptocurrency rewarded to the validator for creating a new block.
Delegated proof-of-stake (DPoS) is a type of PoS where stakeholders can delegate their staking power to a validator.
What is Proof of Stake (PoS)?
To understand how proof of stake works, we must first understand what a consensus algorithm is.
A consensus algorithm is a set of rules that everyone in a network agrees upon to validate transactions and prevent fraud.
The most popular consensus algorithm is called proof of work, which is used by Bitcoin.
However, there are many other consensus algorithms that have been developed, including proof of stake.
Proof of stake is a popular type of consensus algorithm, by which a cryptocurrency blockchain network aims to achieve distributed consensus.
The term “proof of stake” was coined by a “Bitcointalk forum” user called QuantumMechanic.
The fundamental point was that it would be wasteful to open up mining to everyone and let them compete against one another.
Therefore, in PoS-based cryptocurrencies, the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e., the stake).
Unlike proof of work-based systems, there is no concept of blocks being mined — rather, validators are staking their own crypto holdings to have their blocks included in the chain.
Bear in mind that the validators are not chosen in a completely arbitrary fashion.
A certain amount of coins must be staked into the network by a node before it can be considered for the validator’s role.
The size of the stake has a bearing on the probability that a validator will be chosen to forge the next block.
Let’s assume that John contributes $100 to the network while Cindy contributes $500.
Cindy’s chances of making the cut to forge the next block are five times higher!
It is worth noting that the stake is always more than what the validator earns from the transaction fees to keep the validator financially motivated.
Among the many blockchain networks, such as Polkadot (DOT), Algorand (ALGO), Solana (SOL), Cardano (ADA), and the upcoming Ethereum 2.0, proof of stake represents an evolution in consensus algorithms.
How To Stake Tokens in a PoS Network?
To stake tokens in a PoS network, you first need to find a supported wallet or exchange that offers staking for the coin you hold.
Then, you will need to deposit your tokens into the wallet or exchange.
Keep in mind that a certain number of tokens must be staked to participate in some protocols.
For example, to stake on Tezos, you will need a minimum of 8,000 Tezos (XTZ).
The PoS implementation in Ethereum 2.0 will call for 32 ether (ETH).
Once your tokens are deposited, you can choose how many you want to stake and for how long.
The amount of interest you earn will depend on the amount of time your coins are staked, as well as the specific rules of the network.
For example, some networks may require that you keep your coins staked for a minimum of 30 days, while others have no minimum requirement.
In any case, the longer you stake your tokens, the more rewards you will earn.
The good news is that once you have deposited your coins into a staking wallet, the process is completely passive — meaning you can earn interest without having to do any work.
There are many coins that can give you an Annual Percentage Yield (APY) of 4-8% or even higher, so the income potential in staking is relatively high.
When you are ready to stop staking, simply withdraw your tokens from the wallet or exchange.
Why Should You Stake for Passive Income?
Proof of stake blockchains offer a unique opportunity for earning passive income from cryptocurrency.
Unlike proof of work blockchains, which require mining equipment and expensive electricity, proof of stake blockchains only require you to hold coins in your wallet to earn rewards since you are not solving complex mathematical problems.
This makes staking a much more accessible way to earn crypto.
PoS algorithms also tend to be more censorship resistant than PoW algorithms.
This is because, in a PoS system, the network is not controlled by a small group of miners who can choose to censor certain transactions.
Instead, everyone who has a stake in the network (i.e., everyone who owns coins) has a say in what happens.
This makes it much harder for anyone to censor transactions or refuse to process them.
Issues with Proof of Stake
While PoS does away with mining (and, in theory, reduces energy consumption), it has its own set of issues.
Firstly, no PoS system today can scale to the level of Bitcoin or Ethereum.
These systems are not yet as decentralized or safe as the most advanced PoW systems.
However, these flaws could be fixed with more advanced consensus mechanisms like Casper (CSPR).
When the validator does not show up to complete their job, this might be another source of possible issues.
However, this problem can also be easily solved by choosing a large number of backup validators in case the primary ones fail.
And though PoS systems might use fewer resources overall, they can be less secure than PoW systems.
One reason is that the hashing power in a PoS system is spread out among all users, while in a PoW system, it is centralized among miners.
This means that a PoS system is more vulnerable to a Sybil attack, where an attacker creates multiple fake identities to gain control of the network.
Another issue with PoS is that it can be more vulnerable to 51% attacks, where one entity controls more than half of the currency.
The blockchain is also technically at risk of fork if two different blocks are created at exactly the same time and one gets included in a new block before being confirmed by a sufficient number of validators, depending on your staking setup.
To increase security in such cases, many projects use vaults where stakeholder deposits are locked up until they can be periodically released and rewarded with new coins (i.e., interest on your crypto holdings).
One popular alternative is so-called delegative proof of stake, which involves stakers delegating their stake to another party who will stake on their behalf.
Concluding Thoughts
To summarize, in Proof of Stake blockchain networks, the miners do not actually mine the coins.
Instead, they essentially lock up their coins for a set amount of time and take turns validating transactions on the network.
In return, these stakers receive rewards based on the number of coins they have staked and their specific network’s staking fee schedule.
So if you are looking for a way to earn some passive income from your cryptocurrency holdings, staking might be the perfect solution.
Staking is the process of holding onto your coins to support the network and earn rewards.
By doing so, you can earn interest on your holdings and help keep the network secure.
Now that you know how staking works and how it earns you passive income from your crypto holdings, would you consider staking your crypto tokens?
Do you think the reward to risk profile of such an investment is better than those in traditional finance?
https://synapsetrading.com/wp-content/uploads/2022/09/How-to-Stake-on-Proof-of-Stake-Blockchains-for-Passive-Crypto-Income-thumbnail.png7201280Spencer Lihttps://synapsetrading.com/wp-content/uploads/2019/10/logo.jpgSpencer Li2022-09-02 01:54:162022-12-21 21:19:34How to Stake on Proof-of-Stake Blockchains for Passive Crypto Income
