RSR Analysis Sunday — Edition 17

Published in

Reserve Lodge

5 min readApr 26, 2021

The Age of Crypto

Happy Sunday Rangers! Steel is forged by constant pressure. By weakening iron and carbon together, quenching it, firing it again, and repeating the process. Without steel we have no skyscrapers. Without it, humanity could not have conquered the skies and the oceans. Volatility in emerging risk assets is no different than the processing of steel. As the price of them goes up, they become heated, malleable, soft. When markets shift the other direction, as they always do, the red hot assets become deep red candles and are quenched. This is the process by which emerging technologies develop. It is the volatility of a startup — highs and lows — that we are seeing play out in real time across a trillion dollar asset class. And unless we accept that this forging process must take place, we will never need elevators to live and work among the birds, to see Earth from space, or discover new species at the depths of our oceans.

For some, a 50% drop is difficult to watch. I personally thought we had seen the worst of it last week. But I now realize that we were still too soft. We needed more quenching, for the iron and carbon atoms to reform and reset further. The steel foundation is being built before our eyes — embrace this moment. The Iron Age was one of technological progress through volatility. The Age of Crypto will be the same. Fortunes were made during one, and are being made in the other.

In 2017, I remember many saying that the technology was akin to the era of the Internet in 1995. I was fond of responding that it was the Internet in 1985, that we were still early. I now realize we were actually in the Bronze Age then. Weak projects, fiefdoms if you will, squabbling over territory they couldn’t defend. A king called bitcoin and an explorer named Ethereum. Many lives and fortunes were lost and few emerged with their heads still intact. Over the crypto winter, progress led us to the Iron Age. Decades of progress compressed into several years. This time is where we will see skyscrapers being built, emerging as part of the skyline of society in the coming years. I have no doubts that Reserve is one of those skyscrapers. We just need to forge the steel to build its foundation.

Steel is forming. We were overheated at 95+ (source). FGI a bargain at 30.

Technical Analysis — Week of April 25th

Weekly Timeframe — USDT Pair

As mentioned last week, a weekly close above $0.10 was needed to confirm blast off. In fact, quite the opposite occurred. Our downside bands were violated into the sub-$0.07 region, an area of strong support (our “steel” in the short-term).

Given the dramatic drop, I do expect an equally dramatic push back into the $0.09 range in the coming days, perhaps retesting $0.10 this week or next. However the cool off may need time to collect itself as we enter May. A monthly close over $0.10 would be fantastic to instill confidence here, as would a weekly close over that level. Revisiting the $0.06x range is not off the table, though anything in the $0.065-$0.070 will likely be snapped up quickly.

Despite considerable intra-week volatility, we are still moving in the right direction — a retrace that brought us back to prices from a month ago, but nothing more. Forging steel a $0.07 and setting the foundation we need to breach much higher. The implied move at the end of the price consolidation in May places us around $0.20 (black bar) and on strong adoption news could mean we test the upper bound of the long term channel at around $0.70 by the end of the summer.

RSR/USDT, Huobi (weekly), Log Scale Zoomed In

Daily Timeframe — USDT Pair

I wanted to catalog our intra-month and even intra-week movements to get a sense of how this week’s action compared to the historical movements. It supports the “steel” thesis. That with each savage move downward we form a base to move significantly higher.

RSR/USDT Daily (Huobi), Log Scale — Gain / Retrace from May 2020 — April 2021

As evidenced by the chart below, these “quenching” events are short-lived, and followed by weeks or months of “hardening”.

If we take the conservative 160% median rise following this past week’s drop of roughly the median from the past year, we can expect prices to move higher back to $0.18 in the next month or so. A bullish scenario for the next few months is laid out below — which would be a repeat of last year and end around the upper end of our channel at about $0.60. However you cut it, we are almost certainly moving higher from here. Will be fun to revisit this chart and see how price action plays out through the summer.

Daily Timeframe — BTC Pair

Another violation of our trendline (adjusted below), with RSR dropping more against its BTC pair but still holding strong over 130 sats. We also have a nice upward trend continuing and I would expect stronger performance of battered alts, including RSR, as the market recovers.