On a special episode of the CoinGeek Weekly Livestream, host Kurt Wuckert Jr. was joined by Gareth Soloway, a veteran trader with over two decades’ worth of experience. In a departure from BSV-centric topics, Soloway talked about how he joined digital asset trading, how he identifies and exploits prime opportunities and where he believes the market is headed.
Soloway first heard about Bitcoin in 2011 and he was quite captivated by the promise of an alternative system a few years after the 2008 financial crisis. Being a trader, he decided to try his hand in the then-very-small industry and he has been hooked since.
As he told Kurt, he “is not really focused on where it [Bitcoin] is in five or ten years, more so where it is in a week, two weeks, a month from now.”
Soloway is the founder of ‘In The Money Stocks’ as well as ‘Verified Investing Crypto,’ two services through which he guides and educates other traders through hands-on trading.
For the veteran trader, identifying patterns is half the job. After trading for some time, a good trader will notice some of the patterns that keep on replicating. For BTC for instance, there’s a four-year cycle that seems to recur, he observed.
Just as important, especially for technical analysis is analyzing human emotion. “When charts are going up, people are buying and there’s more buyers, which is greed starting to perpetuate. Same thing on the downside, fear [which is when] they sell and the price is going down. So you’re really reading the emotion of the investing world.”
For all his prowess and experience, Soloway admits that there are times when he is wrong. Most recently, he lost money betting on LUNA, the digital asset that crashed to the ground after its algorithmic stablecoin pegging mechanisms failed. When it first dipped by half to $40, Soloway’s technical analysis indicated it was a great point to buy, but it continued falling to near-zero.
Soloway has always relied on the charts and his technical analysis. However, the digital asset market tends to have a lot of people who trade based on whims and blind belief. One of the biggest proponents of “ignore everything and buy BTC” school of thought is Michael Saylor, the MicroStrategy CEO who is also wrong about Bitcoin for a few reasons.
“I understand people having this deep blind faith in something, but at the same time everyone has to look at their own situation and decipher what’s okay for them,” Soloway said.
Responding to a question on what the charts tell him about BSV, he noted that the asset is on major support right now at $50, a level it hasn’t breached since back in 2018. “As long as you hold this $50ish level, it’s ok. If it breaks that, that’s when you need to start getting a little nervous.”
And while the technical charts may not be as rosy for BSV, the ecosystem has always focused on fundamental analysis that emphasizes building applications and believing that the price will follow demand and shoot up.
While fundamental analysis is valid, Soloway pointed out that the digital asset market is still way too young for it.
“Fear is so much more dominant in the short term. It’s the most powerful, just like greed is. So in the long term, when fear subsides, fundamental analysis will make sense.”
Soloway understands that it’s easy for digital asset investors to get carried away, but he advises that protection is key, especially in a bear market like the one we’re in right now. The key thing is to ensure that you come out of the bear market unscathed and with all your money intact. When the bull market comes along, and it will, “that’s when you make your big money.”
The current bear market, both in digital assets and equities, is a result of the Federal Reserve’s tightening policy which is reducing the money supply. This won’t last long, with Soloway predicting that the money printers will be powered again next year as the economy starts going into recession.
The only way to come out a winner through all this is to never fight the Fed, he concluded.
“It used to be don’t fight the Fed on the way up, now they are pulling the money out, so it should be don’t fight the Fed on the way down.”
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