This Crypto Soared 445% YTD, But a Change in Name Didn’t Change the Trend

2022 ended in a “crypto meltdown.” But then, one Elliott wave pattern predicted a “RIOT”ous comeback was ahead

It’s been a week since planet Earth was lacquered in pink baubles and glitter dust, and Barbie fever doesn’t seem to be waning anytime soon. So if you can’t beat em, join em.

Something I did NOT learn from the movie is that Barbie’s impossible physique was inspired by a German adult novelty doll named Bild Lilli, based on a “comic strip call girl” (Wikipedia). Barbiedoll creator Ruth Handler saw the doll while vacationing in Europe. Using it as a prototype, she changed her very adult profession and name and transformed her into the wholesome toy icon.

What I did learn from the movie (spoiler alert): Character Barbie suffers an existential crisis when she wakes one morning in fictional Barbieland with flat feet and cellulite, only to embark on a journey of self-discovery and truth which leads to her own name changing to Barbara.

The trope of reinvention is an effective plot driver. It starts with changing one’s name, moving to a new place, and setting about on a rebirth of possibility.

It’s also a common practice for companies that have fallen on hard times and/or had their original names besmirched by scandal and controversy. ValueJet, following the tragic plane crash that left no survivors, reemerged as AirTran in 1997. The Lance Armstrong Foundation, after its leaderhead was found guilty of doping, changed its name to Livestrong. Facebook in 2021, amidst accusations of knowingly fostering a toxic space for teenage mental health, rebirthed itself as Meta in 2021.

And, in January 2023, after a year-long spewing firehose of scandal surrounding cryptocurrencies and the companies and celebrities who support them (think: Kim Kardashian to Sam Bankman-Fried) — the bitcoin miner Riot Blockchain marched up to its figurative Clerk’s office and changed its birth name to Riot Platforms Inc. (Nasdaq: RIOT)

From the Washington Post on January 4, “Crypto Crash Makes Blockchain a Dirty Word.” That crash, to jog the memory, entailed a widespread collapse in all 22,000 or so digital tokens, including a near 90% crash in RIOT in 2022 to its lowest level since late 2020 at year’s end.

NPR on Dec. 29, 2022 summarized the last 12 months as “the year cryptos came crashing back to Earth,” and said (on behalf of one industry expert):

“I think people are starting to think of crypto as this big scam that they would not want anything to do with… And that poses an existential problem for crypto. Because, for it to work, it requires an ever-larger stream of people to keep buying it.”

Like Barbie, RIOT (along with the whole crypto community) suffered an existential crisis. It was guilty by association. For Barbie, the driving force for turning herself around wasn’t external. She traded her stiletto heels for a pair of Birkenstock sandals and changed her name — yes. But her real rebirth into a fully actualized woman came from within.

The same applies to RIOT. The battered bitcoin miner did transform into one of the strongest crypto performers of 2023, so far. In fact, it rallied 445% in the first 7 months to tap a 16-month high on July 13. But it wasn’t a change in its name that caused the comeback. It was an internal change in investor psychology, which manifests as Elliott wave patterns directly on price charts.

Here, on January 16 our Crypto Pro Service showed this labeled price chart of RIOT, which identified the entire decline from the 2021 peak as a second wave. The pattern had neared an important Fibonacci retracement level (.618), and the next move of consequence seemed to be a third-wave rally. From Crypto Pro Service:

“I’m more confident that we’ve hit a big bottom in RIOT. There’s a nice impulsive turnaround off of this 325 low. So over time we’ll be looking for RIOT to get above the Sept high above 10.52 to fortify the idea that this has bottomed.”

And this next chart from Crypto Pro Service on July 24 captures RIOT’s 2023 rally.

In a July 24 Crypto Pro Service update, RIOT features in our “Opportunities” page because its wave patterns are as clear today as they were 7 months ago. Today, Crypto Pro Service explains: “Bottom line here, as long as prices stay above ___, the trend here is bullish.”

In the movie, Barbie exclaims: “It is the best day ever. So was yesterday, and so is tomorrow, and every day from now until forever.”

That was before she left her fantasy world. Because in the real world of trading, especially highly volatile cryptocurrencies, some days are good while others plain suck. Not all Elliott wave interpretations of price action work out, either. But with an objective model like Elliott wave analysis, defining critical price levels to manage the risk involved is a very real possibility.

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