Is there a such thing as crypto technical analysis? For this Canadian crypto-trader, there absolutely is. In the stock market, the conventional wisdom says slow and steady wins the race. Then the cryptocurrency market exploded in 2021 and flipped traditional wisdom on its head. Millionaires were minted overnight. To onlookers, it appeared as though printing money wasn’t just for the Feds anymore.
While some struck digital oil, others experienced devastating losses. A university student, who goes by the name StedCru, recognized the opportunity to build wealth. But he also saw past the intoxicating lure of easy money. Fools rush in, but not StedCru. Rather, he proceeded with cautious optimism. No stranger to traditional investing, this 24-year-old replaced his income trading cryptocurrencies with a clear head and steady hand.
The entrepreneurial spirit is strong with this one
For some, the entrepreneurial spirit is in their DNA. In grade 2, StedCru was already self-employed selling old video games to classmates. By grade 9, he dabbled in consumables selling bottles of Mountain Dew out of his locker. Just a teenager in high school, StedCru already understood stock market fundamentals, investing strategies, and basket-of-good products like index funds and exchange-traded funds (ETFs). It made perfect sense to a kid wired for something more.
When he turned 18, StedCru opened an RBC Direct Investing account to put his skills to the test. “I didn’t know what I was doing at first. I had a stock simulator app and started doing really well. But the gains weren’t real.” So he ventured out. His first live trade? Aurora Cannabis Inc (TSE: ACB). After its peak in October 2018, ACB’s stock price fell from $164 to its current trade price of $5.83 at the time of writing; a 96% loss in value. The trade proved to be a tremendous failure and his first real taste of market volatility.
But StedCru remained steadfast. He didn’t let one bad trade discourage him. Instead, like a good student, he hit the books. StedCru dove headfirst into investing YouTube tutorials, audiobooks, and any other investing material he could get his hands on. He learned in-depth market concepts, analysis fundamentals, and even taught himself how to read charts. Now it made sense, he had entered the cannabis market too late; an expensive lesson but a valuable one.
Coins are like stocks, but way more fun
The crypto bull-run of 2017 finally put Bitcoin on the map. To earn some extra cash, StedCru joined Skip The Dishes at their corporate office. He heard about digital money like Bitcoin, and it left him both confused and curious. During slow times at work, he hit the books once again. The more he learned, the more excited he got, “I realized crypto was a lot like stocks but new, dynamic, and speculative.”
He wanted to get his feet wet without risking a lot of capital upfront. At the time, a traditional stock trade cost $10 on the RBC platform. But you could trade cryptocurrency for pennies on Binance, a popular cryptocurrency exchange platform.
The price was right and StedCru bought $800 worth of Theta Network (THETA); a blockchain project created to decentralize video streaming. “I looked into the project fundamentals and discovered one of the developers was the co-founder of YouTube, and another was the co-founder of Twitch.” He turned that $800 into $10,000, “ crypto is crazy. I never saw that kind of return with stocks.” StedCru was hooked.
Back to the drawing board
On its way to the moon, the crypto market hit a brick wall and came crashing down. Within a month, Bitcoin lost 65% of its value. Even veteran crypto investors watched in shock as their portfolios lost tens of thousands of dollars within hours. 2018 marked the beginning of a mass altcoin sell-off as the majority of projects lost up to 80% of their value over the following months.
StedCru was caught holding the bag. A traditional investor at heart, he held onto his coins because he believed in the concept of buy and hold. But the crypto market is a horse of a different colour, “I didn’t know anything about previous [crypto] market cycles. I didn’t know I should have sold and bought back in at a lower price.” Crypto technical analysis wasn’t a thing, or was it?
Crypto was quiet for the next few years, but StedCru wasn’t phased. He brushed the dirt off his shoulder and went back to the drawing board. In the meantime, he re-entered the stock market and enrolled in a few technical analysis courses. He learned how to read charts more carefully, and even how to change the presets on indicators like the Relative Strength Index (RSI) and the Exponential Moving Average (EMA). Of course, it didn’t hurt that he was also in University pursuing a Bachelor of Finance degree.
A quick study, StedCru began to see patterns emerge in the charts as well as the world around him. Something was happening, something familiar. He started trading Tesla and Palantir based on market sentiment from places like Reddit and Twitter. He even bought some gold and silver because many believed it was undervalued. When he looked at the chart, he saw what appeared to be an uptrend.
He was right. Tesla, Palantir, and AbraSilver Resources Corp were are all winning trades. And he made each of those calls based on his own technical analysis; a real shot in the arm to his confidence. “There can be a strong herd mentality in crypto, and I was starting to see it in stocks too. Sometimes the hype is more profitable than the fundamentals.” For StedCru, social media had become its own kind of technical indicator, one he could leverage alongside traditional analysis techniques. Could he develop crypto analysis techniques based on traditional market principles? What a tempting thought.
Shut it down
Of course, it’s all fun and games until a global pandemic hits and you lose your job. It’s one thing to test theories in a risky space while you also have a paycheque coming in. Take that away, and risk becomes a lot less fun. StedCru had just started a new job waiting tables at an up-and-coming eatery in town. But that ended two weeks later when Covid-19 triggered nationwide shutdowns, starting with the service industry; “I had just started making good tips, then lockdown happened.”
Luckily, the Canada Emergency Response Benefit (CERB) was launched, and StedCru had steady money coming in once again. He used the downtime to get back into the stock market and brush up on fundamental analysis. He enrolled in a few online courses but found that challenging, “I just prefer classroom learning and making connections.”
By 2021, the crypto market was catching fire again. After a series of winning stock trades, StedCru re-entered the crypto market. But this time, he was going to do things a little differently. He took everything he learned from the legacy market and applied it to the digital asset market. He used crypto technical analysis indicators normally used in traditional market trading. And it worked!
Between his backtested crypto analysis techniques and his eye on social media, StedCru became a talented crypto trend spotter; hopping in and out of good projects for quick gains. He looked for something called the Network Effect; when trading volume increases and social media mentions pick up. His trick? Catching the uptrend just before people get really excited about it. But not without consulting the chart first to make sure the trade makes sense. And of course, he always has an exit strategy.
Your network is your net worth
With his keen eye and sharp mind, StedCru quickly replaced his income with the gains from his crypto trades. Not too shabby for an out-of-work college kid. His thirst for knowledge helped him develop the skills to navigate such a volatile market. Of course, we can’t overlook his previous experience in the stock market. StedCru is not a get-rich-quick story, and he didn’t just “get lucky” in crypto. Financial literacy was important to him. In fact, his chosen career path depended on it. The foundation had already been laid.
He had the wisdom and discipline to educate himself before entering a space he knew nothing about, despite the stories of easy money and overnight millionaires. Missing that classroom vibe, StedCru joined a local crypto community on WhatsApp where he quickly graduated from new member to group admin. The group became so popular it maxed out the member limit and had to move over to Telegram so they could keep accepting new members.
From there, his calm demeanor and no-nonsense insight made him the go-to person for new crypto converts. He started doing Zoom calls to teach people the crypto technical analysis indicators that worked for him, always stressing not to take it as financial advice. You always have to do your own research. It was important to him to create a safe space where people could ask him anything. There was no such thing as a stupid question.
Today, StedCru runs a free Telegram group, StedCru’s Crypto Room, where he shares his trades and explains the crypto technical analysis behind it, charts included. He has even shared a Google Doc with all the resources he personally uses to build a successful trading strategy. Inspired by his favourite crypto-podcaster, he wanted to create a welcoming community committed to helping others on their journey. One where big gainers didn’t belittle others. As StedCru says, “crypto is so big and complicated you can’t do it alone, you need community.”