Momentum Matters
Nothing attracts a crowd like a crowd. P.T. Barnum. The first time you hear that quote, it turns your brain into mush. How in the world do you get the smaller, first version of that crowd? As an entrepreneur watching “The Greatest Showman” all I am thinking is — dang, that bank note floated the business way longer than any angel round I have ever seen…
The logic is sound though, for example, when making a snowball, you use your hands as shovels to pick up and pack together the first small ball. Once a decent size ball is made, all you have to do is roll it like a bowling ball down a hill, and it makes this massive perfectly shaped snowball to create the base of your snowman, right? Wrong! If you believed me, you have never made a snowball. After you make the first miniature ball, you roll it on the ground in one direction, making not a sphere, but a cylinder, and since you are impatient and the cylinder will only roll on one side, you decide to roll it down the hill anyway. Waiting at the bottom is snow packed so big that you cannot even roll it to the other side. You completely ignored step 2 of the WikiHow page.
Meanwhile, you are looking over at your friends’ snowman. He started last week, and the thing is epic. It’s 50 feet tall, the coal eyes are perfect, no small pieces of coal have chipped away, the nose is made of what looks like a jurassic-era sized carrot, you aren’t even quite sure how it’s not coming out the back side of the snowman because of the leverage it needs to stay straight. There’s a crowd of 40 people around admiring this shining beacon of holiday cheer.
All the while your snowman is still a piss poor cylinder looking ice-ball. You got too aggressive by prematurely sending it down the hill, and now you cannot even lift it to offset the shape. So you give up and grab your little circular sled and sled away.
The next day, it’s 6am, first light. Outside, your friend and some others are tending to their magical snowman, you decide to go check it out.
“Yo! What’s up with this snowman, how’d you get your balls so spherical?”
“Well, it wasn’t just me, we all share the credit. The five of us all own 20% of this snowman. Each one of us evenly separates ourselves from the top of the hill to the bottom. Once the initial ball is created, as we roll it down the hill, the person grabs it, turns it on its side, and sends it down. We then use the sleds to tow, and put the snowball on top of it and all 5 of us drag it to the top together. Then each morning we come out here and spend a couple hours replacing the portions that may have melted or blown away with the wind each night. It’s really a long and arduous process to keep this snowman together.”
You ask, “Well where did all those people come from to check your snowman out? How’d you get that crowd?
“At first there wasn’t a crowd. We all asked our family to come see it. Only a couple of them with extra time came. We asked them to bring a friend next time if they liked what they saw. Only half of our family came next time, but they all brought one or two friends who they thought would like the snowman. That night we asked everyone what they liked and disliked about the snowman. The advice was to put flashing holiday lights on it, and a rechargeable solar battery pack, this way people could see the snowman at all times of the day or night, and it would catch the attention of passerby’s.”
A later post coming as to how this applies to positive habit forming, but in today’s lesson..
How this post applies to crypto: Binance Coin.
Sometimes seen as unsavory, here at LunarCRUSH we are fans of BNB. When everyone was clamoring for use cases, they created one. It happened to only be possible within the market some thought still did not have a use case, but with the 7th largest market cap of $2.3 billion dollars at the time of writing, BNB has climbed out of the ether (see what I did there), to take it’s place as one of the most transacted currencies.
At LunarCRUSH, we do something interesting with our data. We have four main faculties to establish our currency rating we call the Galaxy Score.
- Price Score: Applying technical analysis derived from moving averages to a coin over time.
- Social Sentiment: A percentage/score of the overall bullishness or bearishness of what people are saying online
- Social Impact: A score of the volume/interaction/impact of social to give a sense of the size of the market or awareness of the coin
- Correlation Rank: The algorithm that determines the correlation of our social data to the coin price/volume.
Then we do something fun. We apply moving averages to the Galaxy Scores. In the case of Binance Coin, on February 19th, we saw a massive divergence of all the Galaxy Score indicators while the price remained level.
You can then see the tables turn on March 7th, where the leading indicator signals a decline.
The price change between these two days was $10 to $18.40. What we have learned from this case and other cases like this, is speed matters. As the price has settled back to the mid-fifteens, longer term momentum indicators are still pointing higher.
There is theory some use to determine the odds that a start-up, idea, or initiative will succeed. Everyday that passes the initiative continues to exist, increases the chance that it will continue to exist into the future. As the folks at Binance continue to build, and as the use case for cryptocurrency increases, as goes Binance, and specifically BNB. As one of the most transacted-with currencies, we believe the laws of momentum apply greatly when markets are filled with humans and computers acting like humans!
Now get out there and build your snowman.
The LunarCRUSH Executive Team
