In the serene coastal town of Lagos, nestled in Portugal’s picturesque southern Algarve region, Didi Taihuttu starts his mornings atop the rooftop of his villa. Perched on a hill gently slopes towards the Atlantic Ocean, his unassuming home exudes rustic charm with its bright white stucco walls and an orange terracotta roof. Bathed in the warm glow of the Mediterranean sun, Taihuttu occupies a plastic chair beneath a round table, where he delves into the world of cryptocurrency trading. Sipping his black coffee, the Dutch patriarch of the Bitcoin Family meticulously studies cryptocurrency price charts on his trusty MacBook Pro, strategizing the trades that will shape his day with a unique Bitcoin trading algorithm.
Embracing Simplicity: A Modest Lifestyle and Minimal Financial Goals
“From his deck, which offers a breathtaking view of an expansive stretch of cobalt-coloured water, cliff-backed beaches, and vibrant bougainvillaea, Taihuttu shares with CNBC that their focus is not on high-performance gains. Instead, he explains that they simply require a few thousand dollars per month to sustain their lifestyle.”
Despite his unassuming demeanor and humble surroundings, Taihuttu’s unorthodox journey masks his remarkable achievements. In 2017, at the age of 45, Taihuttu made a life-altering decision with his wife and three children. They chose to liquidate their assets, including a spacious 2,500-square-foot house and most of their material possessions. In exchange, they embraced a nomadic lifestyle fueled by Bitcoin. It is worth noting that at the time of their transition, Bitcoin was valued at around $900. Since then, the price of Bitcoin has soared exponentially, currently surpassing $30,000, though it has experienced a decline from its record-breaking peak of nearly $70,000 in November 2021.
The significant fluctuations in price have played a pivotal role in expanding the Dutch family’s cryptocurrency savings. Over seven years, Taihuttu has consistently exchanged his Bitcoin for stablecoins pegged to the U.S. dollar to leverage the volatility of the leading cryptocurrency. When Taihuttu believes that Bitcoin is approaching the pinnacle of a bullish market, he converts his Bitcoin holdings into stablecoins like Tether, USDC, and DAI. Conversely, when Bitcoin seems to be at its lowest point during a bear market cycle, he begins repurchasing it. According to Taihuttu, this strategy has been highly successful, largely due to the implementation of his self-created market indicator called the Didi BAM BAM.
Taihuttu’s Successful Investment Strategy and the Benefits of Portugal’s Crypto-Friendly Environment
Taihuttu relies on his indicator, which takes into account various factors, such as directional trading data and moon cycles, to inform all of his investment decisions. He developed this indicator before the Covid-19 pandemic, and it has served as a guiding principle ever since.
According to Taihuttu, the first signs that the bear market was completely over emerged between mid-November and the start of December 2022. Confirmation came in January 2023 when the model displayed a long flag. Taihuttu emphasizes that people should have been buying Bitcoin during this time, as its price has soared from $16k to $30k, representing almost 90% growth.
Since the lowest point of the recent bear market, Taihuttu’s bitcoin investment has appreciated by approximately 50%. While the exact value of their crypto investment remains undisclosed, Taihuttu revealed that they re-entered the bitcoin market when it surpassed the $19,000 price threshold, indicating that their position is favorable.
Living in Portugal, which is considered a crypto tax haven in Europe, provides an additional advantage for the nomadic family. Taihuttu explains that no capital gains tax or other cryptocurrency-related taxes are levied in Portugal as long as cryptocurrency earnings are not derived from providing services within the country. He describes Portugal as a “beautiful Bitcoin heaven” due to these favorable taxation policies.
Understanding the Functionality of the BAM BAM Indicator
When Taihuttu ventured into day trading tokens, he initially relied on conventional predictive metrics like the stock-to-flow model and the Mayer Multiple. The latter calculates the ratio between the current bitcoin price and its 200-day moving average, aiding in the identification of market moments when an asset’s value surpasses its intrinsic worth.
However, Taihuttu found that dedicating significant time to interpreting these somewhat-related measures was not an efficient use of his time. Consequently, he decided to develop his unique combination of top indicators available in the market. According to Taihuttu, it is insufficient to know which indicators contribute to a formula merely. The calculations and coding that encompass the stock conditions, invisible to the naked eye, manifest in informative charts.
In 2019, Taihuttu embarked on incubating and refining a custom-built predictive trading tool. This tool incorporates multiple technical indicators, alongside a touch of astrology, to provide real-time insights into potential price fluctuations.
Taihuttu’s tool encompasses a diverse range of indicators, including Bollinger Bands, Lower and Upper Bands, NMA, Red/Green Ribbon, NormStoch, RSI, Price Oscillator, Plot, MACD, Cross, Chande Momentum Oscillator, RSI-EMA, Full Moon, and New Moon. These indicators are among the most popular signals monitored by cryptocurrency traders when making investment decisions. The charts generated by the Bitcoin trading algorithm display short and long signals and confirmation signals, indicating opportune moments for buying or selling assets, as highlighted by Taihuttu.
Here’s a concise breakdown of the technical components underlying the model:
- Bollinger Bands: These focus on price volatility and consist of a simple moving average line with Upper and Lower Bands based on standard deviations. Price movements outside these bands can indicate oversold or overbought conditions.
- N-day Moving Average: It calculates the mean closing price of an asset over a variable period, typically “N” days.
- Red/Green Ribbon: This indicator represents bullish (green) or bearish (red) market conditions.
- Normalized Stochastic (NormStoch): It assesses price momentum by comparing an asset’s closing price to its price variation over a specified period.
- Relative Strength Index (RSI): This indicator determines if an asset is oversold or overbought, measuring the speed and magnitude of recent price swings on a scale of 0 to 100.
- Moving Average Convergence Divergence (MACD): It compares two moving averages of an asset’s price to identify trends and potential buy/sell signals.
- Percentage Price Oscillator (PPO): Derived from MACD, it expresses the difference as a percentage by dividing it with the 26-period exponential moving average (EMA), allowing for comparison across assets.
- Golden Cross and Death Cross: In the context of Bitcoin, when the 50-day moving average crosses above a rising 200-day moving average, it’s a bullish Golden Cross. Conversely, when the 50-day moving average crosses below a falling 200-day moving average, it’s a bearish Death Cross.
- Chande Momentum Oscillator: This momentum indicator, similar to RSI and Stochastic Oscillator, reacts faster to price changes.
- Relative Strength Index-Exponential Moving Average (RSI-EMA): Combining both measures into a single indicator.
Influence of Moon Phases on Bitcoin: An Intangible Price Factor
According to Taihuttu, moon phases have an intangible impact on the price of Bitcoin. He has observed that during full or half moons, trading activity tends to increase, leading to higher buying and selling volumes. While he acknowledges the possibility of it being a coincidence, Taihuttu points out that when examining the chart in his self Bitcoin trading algorithm, there is often a correlation between lunar phases and market movements, with potential dumps or pumps occurring.
Additionally, lunar phases tend to coincide with the opening and closing of Bitcoin’s monthly puts and options. Therefore, a full moon may indicate an upcoming market sell-off when combined with being at the top of the Bollinger Band.
Taihuttu previously sold the Didi BAM BAM indicator to traders, but he plans to give it away to chosen bitcoin enthusiasts to promote adoption. However, he acknowledges that his business model is declining as individuals can now utilize platforms like ChatGPT to create their custom indicators and scripts, resulting in a loss of potential customers.
The Rise of Generative AI: Transforming Industries and Financial Institutions
Generative artificial intelligence (AI) is a specific type of AI that can create original content. These systems leverage powerful algorithms and extensive datasets to generate text, images, and videos that closely resemble human creations. The public adoption of OpenAI’s GPT language processing technology, particularly ChatGPT, which generates human-like responses, has sparked an industry-wide race for this transformative “paradigm shift” in technology.
While ChatGPT cannot provide a trading algorithm in TradingView’s Pine Script programming language, it does challenge the role of investment advisors. Major financial institutions like Goldman Sachs and Morgan Stanley have begun exploring generative AI tools for various applications. Goldman Sachs is experimenting with AI to automate code generation and testing, while Morgan Stanley is using it to assist financial advisors with research and data queries.
Taihuttu utilizes ChatGPT to write articles on topics like Bitcoin and the Lightning Network, acknowledging its time-saving benefits, even if the output may not rank highly in search results.
The fascinating journey of Didi Taihuttu and the Bitcoin Family showcases the innovative approaches and unorthodox strategies that can be employed in the cryptocurrency market. From their unique algorithm that tracks moon cycles to Taihuttu’s self-developed indicator incorporating trading data and lunar influences, they successfully managed to navigate Bitcoin’s volatile nature. While their methods may be met with skepticism, their consistent gains and financial independence have captured the attention of both enthusiasts and analysts. Their story serves as a reminder that unconventional strategies can sometimes lead to remarkable outcomes in the ever-evolving world of cryptocurrency.
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