Premium Daily Crypto NewsletterJanuary 17, 2018
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Correction Enters Second Day
Remember To Breathe
As we concluded our fundamental analysis section yesterday, if your portfolio is in the red, use it as an opportunity to enlarge your stake, or take a break. The technology hasn’t changed and there has been no major bans. We will recover and come back even stronger.
There’s even a website which documents Bitcoin Obituaries that tracks the number of times that people have declared Bitcoin is dead.
To recap and conclude last week’s news about a possible South Korean cryptocurrency exchange ban, the South Korean President confirmed they will not be banning cryptocurrencies.
Overall this pullback that we’ve seen so far is relatively mild. In 2014 we saw Bitcoin fall 80 percent from its highest only to recover to fresh new highs over last year. Do we think this is the beginning of three years of sideways movement like last time?
In a word: No.
Here’s what’s changed. Bitcoin from 2009 until last year was in the very first section of the innovators space of the technology adoption curve. It was fighting for its life to gain any mainstream notice. What it got was Silk Road and Mt.Gox, two events which would have killed Bitcoin and cryptocurrency as a whole if it were not for the technology being unique and more importantly an improvement over existing solutions.
2017 saw Bitcoin and cryptocurrency move outside of the innovators section and into the early adopters section. This was largely due to the massive increase in cryptocurrencies that have taken the foundation that Bitcoin built and improved upon it, the “Altcoins”. At the end of 2017, with mainstream acceptance on the horizon, cryptocurrency is at its greatest challenge yet, what’s known as the “chasm”. It’s what separates cryptocurrencies from Teslas. This is the make or break moment, and we believe crypto has what it takes.
So I think that overall what happened here is we had a lot of speculation and buildup with the launch of futures products and derivative products in the US. This kind of spelt the institutionalisation of crypto so a new flow of capital would push valuations upward.
A lot of people moved into bitcoin leading up to the launch of those futures. When that happened a lot of other people sold the news. Everybody loves an unregulated market until it acts like an unregulated market.
This is a brand new market, these are brand new products for a brand new assets class. So most of these large professional managers are going to take their time evaluating products and the opportunity.
Cryptocurrency is not dead. Bitcoin is not dead. Market corrections such as these are necessary to test the validity of the investment and the investor.
In addition to the the news from yesterday, we’ve seen the largest fraudulent coin, Bitconnect, shutter their trade and lending platform, effectively erasing 2 Billion of their users investments. We have been highly critical of Bitconnect and platforms like it from the start, and we sincerely hope you were not affected. We strongly recommend you stay away from lending platforms that have “guaranteed returns”.
As we have suggested, it may be a good time to expand your holdings. We have a few new and expanded positions below.
Offensive Actions for the next trading day:
- Please follow Doc’s comments re: bottoming signals in the technical section below.
- Let WTC consolidate first before entering; see alt-coin technical section below.
- Don’t be in a rush to pick up inventory, let the Bear play out first.
- Note the “New Holdings” section below; tomorrow Doc will discuss how to use charts to improve entries.
- Nothing specific for Thursday; please see comments in holdings below.
Request Network (REQ)
We like the direction of this project and will be watching it with great curiosity. Nicknamed, “Paypal 2.0”.
We have high hopes for Substratum in 2018. With Net Neutrality at the forefront of the collective consciousness this year, a decentralized internet is a very interesting opportunity, even if it may open up uncomfortable legal questions.
We have made a very small investment into XBY following a suggestion from a newsletter subscriber. The research has yielded mixed results, so we do not anticipate raising it above T4 status for some time.
We believe ICON will have a great Q1. We intend to capitalize on the upcoming mainnet launch and Korean exchange listings. Very easy recommendation.
ReadySetCrypto’s 7 Categories Of CryptoCurrency
Tier 1 coins are those coins which we have considerable assets invested, are firm believers in the project direction and execution, and have very little reason to sell within short to mid term. These are coins which we risk evaluated to be very solid, and have a high probability of existence duration.
NEO ($NEO) is classified as a Dividend and Platform coin. As our largest holding, we believe NEO has the potential to become a dominant smart contract and DApp platform in 2018. It’s four most compelling features are:
- An innovative consensus algorithm which will allow for greater TPS (transactions per second) over its competitors.
- A dividend structure for holders, incentivizing coin retention and network stability / diversity.
- SE Asia location, enabling NEO to break into markets more easily than competitors.
- Agnostic smart contract language, allowing for smart contract developers to use existing mainstream programming languages, which allows for cheaper smart contract implementation as compared to Ethereum who’s proprietary smart contract language, Solidity, can be a barrier to integration.
NEO is best acquired through Binance. Storing NEO on the Binance exchange will result in a GAS distribution once a month on the first. We recommend the NEON wallet for safe storage. GAS will be distributed on the NEON wallet daily.
WaltonChain ($WTC) is classified as a Dividend and Utility coin. Waltonchain is on the cutting edge of using RFID hardware to enable supply chain management 2.0. We believe Walton has the potential to become a dominant IoT blockchain solution
Waltonchain is the only truly decentralized platform combining blockchain with the Internet of Things (IoT) via patent pending RFID (Radio Frequency Identification) technology.
The custom RFID chips are able to digitally sign and verify transactions at the integrated circuit level, automatically and instantly reading and writing data to the chain without human intervention.
This unique implementation of blockchain + IoT facilitates the true interconnection of all things in the real world with the virtual world, creating a genuine, trustworthy and traceable business ecosystem with complete data sharing and absolute information transparency.
Walton has two major competitive advantages:
- A recently confirmed (to be signed) partnership with China Mobile’s IoT Alliance. China Mobile is the largest mobile telecommunications service in the world as well as the world’s largest mobile phone operator by total number of subscribers. Walton’s Management system is set to be implemented through mobile communication networks, and China Mobile is the largest one. Waltonchain is positioning themselves to be the single connector of the entire Internet of Things initiative put forward by the China Mobile IoT Alliance.
- They implement the blockchain through the RFIDs at the foundational layer. Their technology is patent-pending and gives Waltonchain a solid claim as the only blockchain that connects the physical world with the virtual world with truly reliable data. This is because all other IoT solutions tag items through API, and this means all the data is first passed through a centralized intermediate, a potential point of vulnerability.
Ethereum ($ETH) is an open blockchain Platform that lets anyone build and use decentralized applications that run on blockchain technology. Like Bitcoin, no one controls or owns Ethereum – it is an open-source project built by many people around the world. But unlike the Bitcoin protocol, Ethereum was designed to be adaptable and flexible. It is easy to create new applications on the Ethereum platform, and with the Homestead release, it is now safe for anyone to use those applications.
Tier 2 coins are those coins which have performed extremely well, we have a large amount of assets with, and we believe will continue to operate with high marks. What separates these coins from our Tier 1 status is a flaw or they haven’t yet proven their defining feature, though we believe they will.
OmiseGO ($OMG) is classified as a Dividend and Utility coin.
OmiseGO is a Southeast Asia-based company creating an e-wallet that will make transfer of assets and currencies possible. Merchants and users of the wallet can transfer whatever asset or currency they desire. For example, you could use your ethereum, bitcoin, international fiat, or even your airline points to buy groceries using the e-wallet app on your mobile phone. Transfers can happen across borders, or even while traveling abroad. Unlike Western Union or PayPal for example, the fees are almost negligible, and the transfer is instant. Because it’s based on a blockchain, there are no intermediary banks necessary and users don’t need bank accounts to access those funds. This is especially good for migrant workers who send money home and often don’t have bank accounts and are forced to use expensive wire services instead.
NAVcoin ($NAV) is a Privacy coin with upcoming Platform features. NAVcoin has been around for 3 years. It is not minable, instead being based on a Proof of Stake system in which stakers earn 5% annual returns. Theoretically this means there could be 5% inflation on the supply, however, that would require every coin holder to stake, so likely there will be very marginal inflation between 1 and 3% year over year. It is a currency originally based off of Bitcoin version 0.13, which should tell you it’s got a good foundation from which to build its feature set. Being based off Bitcoin, it currently is a method of transaction, with notable upgrades in the form of Segwit (with possible lightning network integration in the future) and 30 transaction times with extremely marginal fees. That’s great but a lot of coins have that going for them, so thankfully we’re just getting started with the real interesting pieces of NAV. The first and currently only implemented feature, NavTech is a unique dual blockchain technology. Essentially, NAV runs on these two blockchains in order to completely disconnect the sending wallet (your wallet), to the receiving wallet (where the money is getting sent). Think of it like a VPN, NavTech completely strips the sender’s details so the transaction is completely anonymous. The anonymous transaction space has really gotten big lately, with Monero’s recent price action and Ethereum’s implementation of ZKSnarks being two big examples that come to mind.Moving on to the roadmap, there are two big upcoming features for NAV:
- The first is Polymorph, which is a really cool blend of Nav’s anonymous transactions and Changeally’s instant exchange. What this means is that, for example, I wanted to pay someone in Bitcoin but I wanted to do it anonymously. Polymorph would take my bitcoin, turn it into navcoin in order to be processed and sent anonymously using the Navtech dual blockchain, then turned back into bitcoin at the to be sent to the receiving wallet. This will certainly set NAV apart, as it guarantees anonymous transaction for all of the coins on changeally. This is huge for exposure, and a great opportunity for NAVcoin to gain trust, which is absolutely critical anonymous transaction coins.
- The second big upcoming feature is ADApps, or Anonymized Decentralized Apps. This is also a huge potential win for Nav as there is already a huge amount of interest in the crypto space surrounding Dapps, such as Ethereum and Omni. Adding in the anonymous layer would attract projects that would value the anonymity. Nav is still in the planning stages for this project so it could still be awhile before it comes to fruition, but we should see the whitepaper for it soon, and if they could be first to market with ADapps that could prove to be a killer feature for them as it would give them first access to the interested demographics.
Simply put, ICON ($ICX) is a massive scale blockchain Platform that allows
- Decentralized Application (DAPPS) – Build DAPPS on ICON Platform like on Ethereum and NEO. Yes, soon, you will see ICOs happening on ICON platform for different DAPPS
- Interchain (Interoperability with Blockchains) – Allows different blockchains connecting to one another through their protocol. ICON is fully compatible with traditional blockchains like Bitcoin and Ethereum and in future can bridge other public blockchains such as Qtum, NEO and many others to achieve their mission statement – “Hyperconnect the world”
- Artificial Intelligence (AI) – Use of AI to ensure all nodes contributing to ICON Republic/platform are rewarded fairly and not to have certain powers over distribution policies. AI will continue to learn a variety of variables to determine optimal distribution policies and achieve complete decentralization.
- Decentralized Exchange (DEX) – ICON will integrate different DEX protocols on their platform to facilitate exchange of ICX and other future ICON platform currencies. Bancor protocol will be their first DEX protocol when mainent launches this month end and Kyber and others will follow. Not just throwing Kyber’s name out there, it was confirmed they are working with each other, official partnership yet to be announced.
Ripple ($XRP) is a real-time Payment protocol for anything of value. It’s a shared public database, with a built-in distributed currency exchange, that operates as the worlds first universal translator for money. Ripple is currency agnostic and has a foreign exchange component built right into the protocol. Ripple acts as a pathfinding algorithm to find the best route for a dollar to become a euro or airline miles to become Bitcoin. It will look at all the orders in the global order book. The case for XRP comes down to the following: 1) Payment systems work best with bridge assets to focus liquidity. 2) There are good reasons to expect a cryptocurrency to be the most popular bridge asset. 3) There are good reasons to expect that cryptocurrency to be XRP.
- Open, decentralized payments will have lots and lots of assets, including national currencies of all kinds and cryptos. A significant fraction of payments will be among assets that aren’t the most popular. Using intermediary assets to settle those payments concentrates liquidity and reduces spreads.
- National currencies are always tied to jurisdictions and can’t be universal. Systems built around them will never be as open and inclusive as systems that aren’t.
- XRP settles faster than any other major crypto. It higher transaction rates than other major cryptos. It is beat by others only by the amount of liquidity available today. And, most importantly, XRP has a company that is devoted to making sure XRP succeeds for this specific use case.
We have seen the top ten make moves into the positive range once more, but we are far away from a true recovery. Do not be surprised if we see another minor correction before a breakout to the upside.
Of particular note is NEO ($NEO). As our largest holding, it was reassuring to see even at the very lowest point of this correction, NEO was the only coin in the top 50 (outside of Tether ($USDT)) that had a positive 7 day record. That has convinced us that NEO is one of the best coins to hold in 2018 around this market cap.
Regarding other coins, pay particular attention to those coins which are slowest to recover. This may indicate potential weakness.
We’ll continue to watch this macro trend play out.
Be wary that a second pullback could be in the works. We may see this trend last for days or weeks. But what we believe to be certain is that cryptocurrency is not going away, and it still has much to gain and prove. As we mentioned before, 2018 is the year of altcoins, and as such, you should have a well diversified portfolio of them, separated by risk and by purpose as we have done.
Today we picked up two currency coins and one utility coin. Additionally, we are watching several coins such as Ethos ($ETHOS), Enigma ($ENG), and EthLend ($LEND).
Additionally, we are excited to see the news that OmiseGo ($OMG) has opened up their Plasma MVP repo, a extremely solid buy signal that OMG will be able to deliver their killer features. We hope to see a working product soon after this.
Another new project that we’ve been watching is Bounty0x ($BNTY), which has recently announced a partnership with IBC Group and a new exchange listing.
Stay strong and we’ll get through whatever the market throws at us together.
In this section we’ll feature a daily ICO or new coin we think you should check out. Based on your country, you may not be able to participate in the ICO, but you will be able to trade the coin once it is listed on an exchange following its ICO (usually only a couple of weeks). ICOs are where a lot of money in crypto is made. Here’s proof.
That said, we should warn you: ICOs are highly risky endeavours and you need to mitigate any potential losses. Treat it as money you’ve lost the moment you contribute to the ICO. We are not responsible for the ICO’s performance.
Today’s featured ICO / New Coin is:
The Decentralized Data Sharing Network Protocol Based On Blockchain Technology
Token Standard: No
Additional Token Emission: No
Accepted Currencies: BTC, ETH
12% – The operating team
37% – Community/Foundation
36% – Public Crowd-funding
15% – Private placement
- Bitcoin Cash
Is the sell-off over yet? We saw a high-volume selling climax at 1530 UTC today (Wednesday) that might have signaled the end of this leg down as many of the major coins hit major support tests. What’s interesting to me is that equity markets continued to hit new highs while the crypto market crashed, to the sneers of many traditional stock market insiders. What that tells me is that crypto will likely end up being a hedge when the stock market has its turn to the downside.
And crash it did today; BTC alone was off 53% from its recent highs at today’s low. Investors are new to crypto markets just like they were to tech stocks back in 1999, and every day is a repeat lesson that the market exists to create the greatest amount of pain to the largest sample of traders possible. I know that this sounds somewhat Machiavellian but it’s the truth and I see that lesson repeated every day, in every timeframe.
In today’s video I’ll discuss some typical “bottoming” candlesticks as well as using fractal timeframes to spot early reversals. Don’t forget that there are no awards for getting a buy point at the absolute bottom tick of a correction. Wait for the change in polarity.
I did convert some USD to ETH as the short-term reversal played out today. ETH is a long-term play for me.
So even though NEO is now a top-ten coin, it’s still only available on certain brokers so I’m still calling it an Alt-coin. NEO displayed incredible survival in today’s crash and those long lower tails on the candles show a lot of buying pressure and shorts caving:
If you have a particular tool that you think is superior, please let me know. You can access the BitFinex and TradingView platforms for free, however there are some paid features that you might want to consider depending on your needs, such as expanded watchlists, different study sets, account alerts, etc.
Coinigy is a great tool for determining prices on each exchange, however I may not have access to the full suite of tools on TradingView charts. I am currently not using it as a front-end GUI for my exchanges, which it supports.
I also use Blockfolio to give me a quick snapshot of my holdings, and find that it does an excellent job to aggregate all of my holdings into one easy-to-read snapshot of my cryptocurrencies, which are typically located in many different places.