‘Bitcoin Family’ has a trading algorithm that tracks moon cycles

LAGOS, Portugal — In the coastal town of Lagos in the heart of the Algarve region of southern Portugal, Didi Taihuttu began most of his life on the roof of his villa — the An unassuming residence with rustic charm perched on a hilltop sloping from the Atlantic Ocean. Mediterranean sunlight reflects off the house’s bright white stucco walls, illuminating the orange terracotta roof and casting a glow on Tehutu’s body.dutch patriarch bitcoin As the family sips black coffee, they pored over cryptocurrency price charts on their MacBook Pros while he decides which trades to start the day with.

“We only need a few thousand dollars a month to make ends meet, so it doesn’t really matter to us how we perform,” Tehutu told CNBC from his deck overlooking the expanse of cobalt-colored waters with the cliffs backing the beach and bougainvilleas.

Tehutu’s modesty and unassuming surroundings, 45, belied his success. Taihuttu, his wife and three children sold everything in 2017, trading a 2,500-square-foot house and most of their possessions for bitcoin and a nomadic life. That was when Bitcoin was around $900. Bitcoin is currently trading above $30,000, down from its November 2021 all-time high of nearly $70,000.

These extreme price swings have helped the Dutch family grow their cryptocurrency reserves.

For seven years, the investor has regularly swapped bitcoin for a dollar-pegged stablecoin to take advantage of swings in the price of the world’s largest cryptocurrency. When Taihuttu thinks Bitcoin is about to reach the top of its bull market, he trades his Bitcoin into stablecoins like Tether, USDC and DAI. He started buying back when Bitcoin hit cycle lows during bear markets. Taihuttu says the gamble has been a huge success so far thanks to a market indicator he himself created called Didi BAM BAM.

Taihuttu’s indicators take into account a variety of inputs, including directional trading data and moon cycles. It has guided all of his investment decisions since Taihuttu was created before the Covid-19 pandemic.

“From mid-November to early December 2022, we saw the first signs of a complete end to the bear market,” Taihuttu said. “This was confirmed when the long flag appeared in the model in January 2023.”

He added, “People should already be buying bitcoin because for every bitcoin you bought for $16,000, you’re now worth $30,000, so that’s almost a 90% upside.”

The father of three said his bitcoin investment is up about 50% since the bottom of the most recent bear market.

Taihuttus declined to disclose its current total cryptocurrency investments to CNBC. But Taihuttu did reveal that they had fully repurchased Bitcoin when it broke the $19,000 price threshold, so they were “doing pretty well.”

It also helps that the nomadic family’s main residence is in Portugal, Europe’s ultimate crypto tax haven.

“In Portugal, you don’t pay any capital gains tax or any other taxes on cryptocurrencies,” Taihuttu said. “As long as you’re not earning cryptocurrency by providing services in Portugal, you’re fine.”

“It’s a very beautiful bitcoin paradise,” he said.

When Taihuttu started day-trading tokens, he initially turned to traditional predictive indicators such as the stock-to-flow model and the Mayer Multiple — an indicator calculated by dividing bitcoin’s current price by its 200-day moving average , to help identify bubble moments in the market when the value of an asset exceeds its intrinsic value.

But spending time reading all these somewhat related metrics didn’t seem like a particularly productive use of his time, so Taihuttu decided to create his own proprietary combination of the best indicators on the market.

“Just knowing which metrics to include in the formula is not enough,” Taihuttu explained. “What you can’t see is the calculus and the code implemented on the stock terms. Those calculations are shown in the graph.”

Starting in 2019, Taihuttu began incubating and refining a custom predictive trading tool that would weigh multiple technical indicators (plus some astrology) and then gain real-time insight into potential price swings.

“It is a combination of Bollinger Bands, Lower and Upper Bands, NMA, Red/Green Ribbons, NormStoch, RSI, Price Oscillators, Charts, MACD, Crossovers, Chandler Momentum Oscillators, RSI-EMA, Full Moon and New Moon,” Taihuttu explained, listing a dozen of the most popular market signals that cryptocurrency traders pay attention to when making investment decisions.

“When it might be a good time to buy or sell, there are short and long signals and confirmation signals shown on the chart,” Taihuttu continued.

Here’s a quick breakdown of the technology underlying the model:

• Bollinger Bands Watch for price fluctuations over time.The model consists of a simple moving average and two standard deviation lines (called upper and lower limits. Price movement outside of these outer bands can indicate whether an asset is oversold, and vice versa.
• N day moving average Is a moving average that takes the average of an asset’s closing prices over a variable period of time (or “N” days).
• red/green ribbon Indicators depict bullish (or green) and bearish (or red) market conditions.
• this Standardized Stochastic Indicator (NormStoch) Focus on price momentum.it A variation of the Stochastic Oscillator, the indicator compares an asset’s closing price to its price change over a specified period.
• Similar to Bollinger Bands, relative strength index Evaluate whether an asset is oversold or overbought. The index, which ranges from 0 to 100, measures the speed and size of an asset’s recent price movements.
• Moving Average Convergence Divergence (MACD) Comparing two moving averages of cryptocurrency prices by subtracting the 26 period Exponential Moving Average (EMA) From the 12 period EMA.
• this Percent Price Oscillator (PPO) Take the MACD reading and divide it by the 26 period EMA. The PPO metric of different assets with large price differences can be compared since it is expressed as a percentage.
• For Bitcoin, when the line plotting the 50-day moving average crosses the rising 200-day moving average, it is interpreted as a bullish indicator, known as golden cross.When the 50-day moving average breaks below the descending 200-day moving average, it is called death crossindicating that a bear market may be imminent.
• Chande Momentum Oscillator is a technical momentum indicator, similar to the relative strength index and stochastic oscillator, but it reacts more quickly to price changes.
• As the name suggests, Relative Strength Index – Exponential Moving Average Combine these two metrics into one metric.

Then there are intangible price influence factors such as the month.

“I’m not saying it always affects the price of bitcoin, but the moon has a big impact,” Tehutu said.

Taihuttu found that people tend to make more transactions when the moon is full or half.

“They tend to buy more, they tend to sell more,” he said. “Maybe it’s a coincidence, but if you look at the graph, mostly at full moons, depending on where we are in the cycle, there’s either a dump or a pump.”

Taihuttu added that moon phases also typically coincide with the opening and closing of Bitcoin monthly puts and options.

Tehutu continued: “So if we are at the top of the Bollinger Bands with a full moon, then you know we’re going to run.” That’s a sign that a market sell-off is imminent.

AI takes center stage as public adopts it widely OpenAI’s GPT language processing technology. ChatGPT, which uses massive language models to produce human-sounding responses to questions, has sparked an arms race among some companies to discuss what is seen as the next technological “paradigm shift.”

Most recently, in May, Goldman Sachs spun out its first startup from the bank’s in-house incubator — an AI-powered social media company for businesses called Louisa. Advancing artificial intelligence is part of a larger effort by chief executive David Solomon to accelerate the bank’s digital transformation.

Meanwhile, Morgan Stanley is using it to inform its financial advisers of questions they may have. The bank has been testing the OpenAI-powered chatbot with 300 advisors so far, with a view to eventually helping its roughly 16,000 advisors tap into Morgan Stanley’s research and data repository, said Jeff McMillan, the bank’s head of analytics and data. . The firm’s wealth management arm.

Taihuttu uses ChatGPT themselves, but more often for writing about topics like Bitcoin and the Lightning Network. But he points out that while it’s a productivity hack, the output doesn’t necessarily rank high in search results.

“They’ll still find out that it’s ChatGPT,” he said. “But it still saves you a lot of time.”

— CNBC’s Ryan Browne contributed to this report.