Premium Daily Crypto NewsletterApril 5, 2018
Watch this video to see how to use this newsletter. Click the square in the lower right to expand the view.
Check Out Doc's Trading Book
Have You Read Our Free Ebook?
Crypto Market Commentary
Market Moves Up Slightly
Incoming Weekend Dump Likely?
The market is nearly neutral from where it started at 255 Billion, after bouncing between 260 and 250 throughout the day. Volume remains constant as well.
Fundstrat’s Tom Lee has predicted a “massive outflow” of cryptocurrency to fiat in the lead up to tax day in the US.
“This is a massive outflow from crypto to dollars,” Lee wrote. “Historical estimates are each $1 of USD outflow is $20-$25 impact on crypto market value.”
Lee argues that the April 17th income-tax filing deadline is contributing to crypto’s falling prices. As investors who made it big sell some of their remaining holdings to pay $25 billion in capital-gains levies, this will inevitably put more pressure on the market.
“We believe there is selling pressure by crypto exchanges who are subject to income tax in U.S. jurisdictions. Many exchanges have net income in 2017 [of more than] $1 bln and keep working capital in [Bitcoin]/[Ethereum], not USD — hence, to meet these tax liabilities, are selling BTC/ETH.”
Lee concludes that, “ultimately, we expect Bitcoin to find footing after April 17th, tax day.”
Lee most recently predicted that Bitcoin will hit $91,000 by March 2020, based on BTC’s performance after past market dips.
While there may be an element of truth to Lee’s cause and effect prediction, we think it’s much more complicated than “taxes”. After all, when the market dipped in January, people were quick to blame the Chinese New Year. They then argued that Wall Street Bonuses would rally the market. Or that Bitcoin Futures expiring would. The truth is that it’s not the sole responsibility of one event to rally or crash the market. It’s millions of decisions, reactions, and beliefs aggregating in the direction the market takes. You could make 1,000 different hypothesis and have 1,000 different answers. Will we see an uptick after mid-April? It’s possible, but the Jury’s still out.
One of the more interesting news stories that we saw today was Coinbase entering the venture capital space. They’re looking for the next hot companies in the cryptocurrency and blockchain space, and helping to fund their projects.
“We’ll be providing financing to promising early stage companies that have the teams and ideas that can move the space forward in a positive, meaningful way. At least in the beginning, our goal is simply to help the most compelling companies in the space to flourish.
This means that we don’t have the strategic requirement of formalizing partner relationships with such companies, as some corporate venture programs do. Our focus is on building strong relationships and helping to spur on the development of the ecosystem.” the company explains on their blog.
“You may also see us invest in companies that ostensibly look competitive with Coinbase. There may be nuance to the way these startups are building out their products. Or, in some cases, we may be comfortable investing in companies that are potentially competitive, because it’s in everyone’s interest to see the ecosystem innovate. We’re taking a long term view of the space, and we believe that multiple approaches are healthy and good.”
That’s easily a direct reference to the rise of decentralized exchanges hitting the market now. 0x ($ZRX) is one of those so we’ve cautiously entered a position with them in order to possibly catch it before an announcement, but we’ve set the stop close so as to prevent any fallout should no news transpire.
If you are holding Monero ($XMR) be sure to update your wallet using this new one: https://github.com/monero-project/monero-gui/releases/tag/v0.12.0.0
This will enable you to be in line with the upcoming hard fork that will make Monero ASIC resistant once again (read more about that in the fundamental analysis section). See the countdown to the upcoming fork here: http://xmr.noctism.com/
Talk to you tomorrow.
New to Cryptocurrencies? Check out our archived classes “Intro to Cryptocurrency Trading”, “How to Find Your Next Big Cryptocurrency: Intro to Fundamental Analysis” and Doc’s new one, “Introduction to Technical Analysis” which are now all available for immediate purchase/viewing in the Premium Member’s Home. View more about them at our online store by CLICKING HERE.
If you go to buy any of our courses at our online “store” you can receive $10 off the $59 street price with your member’s “coupon code” of member18crypto
Offense – Adding Trades
Offensive Actions for the next trading day:
Defense – Managing Risk
Defensive Actions for the next trading day:
- Exited DNA position
- Exited NULS position
How to read this portfolio: Please click on the Chart Key tab above for definitions and color codes. The colors correspond to our 7 categories in the graphic below.
ReadySetCrypto’s 7 Categories Of CryptoCurrency
Tier 1 coins are those coins which we have considerable assets invested, are firm believers in the project direction and execution, and have very little reason to sell within short to mid term. These are coins which we risk evaluated to be very solid, and have a high probability of existence duration.
NEO ($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.
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.
Ripple ($XRP) is a real-time Payment protocol for anything of value. It’s a shared public database, with a built-in distributed currency exchange, that operates as the worlds first universal translator for money. Ripple is currency agnostic and has a foreign exchange component built right into the protocol. Ripple acts as a pathfinding algorithm to find the best route for a dollar to become a euro or airline miles to become Bitcoin. It will look at all the orders in the global order book. The case for XRP comes down to the following: 1) Payment systems work best with bridge assets to focus liquidity. 2) There are good reasons to expect a cryptocurrency to be the most popular bridge asset. 3) There are good reasons to expect that cryptocurrency to be XRP.
- Open, decentralized payments will have lots and lots of assets, including national currencies of all kinds and cryptos. A significant fraction of payments will be among assets that aren’t the most popular. Using intermediary assets to settle those payments concentrates liquidity and reduces spreads.
- National currencies are always tied to jurisdictions and can’t be universal. Systems built around them will never be as open and inclusive as systems that aren’t.
- XRP settles faster than any other major crypto. It higher transaction rates than other major cryptos. It is beat by others only by the amount of liquidity available today. And, most importantly, XRP has a company that is devoted to making sure XRP succeeds for this specific use case.
Simply put, ICON ($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.
Fundamental Currency Research
One of the biggest topics in cryptocurrency is mining. There’s debate if it’s good or bad, useless or revolutionary, but we’re not going to get into that today. Instead we want to talk about ASICs, or Application Specific Integrated Circuits, and how they are related to cryptocurrency mining. Without getting into a lot of detail, mining is used to secure the network by perform a lot of mathematical guessing. This guessing ability, or hashing power, is a measure of a computer’s capability to make a certain number of guesses per second. The more guesses per second, the higher the hashing power. Mining is more or less a lottery to correctly guess the perfect hash for each block. Think of the infinite monkey theorem: Given an infinite length of time, a monkey punching at random on a typewriter would almost surely type out all of Shakespeare’s plays. The more monkeys we have, the more likely it will happen sooner rather than later. In the same way, the more hashing power we have, on average the more likely we are to make money from mining. That’s why a mining farm made up of thousands of computers mining in rural China where the electricity is cheap is going to be many times more profitable than a single computer running in the middle of NYC. Ok, that’s obvious, but it’s not just the number of computers affecting the total hashing power, it’s the type of computers. Or, more specifically, the hardware being used to mine. When Bitcoin first started, it was mined using CPUs, or the central processing unit of your computer.
This is good, but because a CPU is so multifaceted and tasked with doing many things to keep the computer running, it’s not the best miner. So, mining shifted to GPUs, or graphical processing units. This is much better because GPUs are more efficient at computing hashes given they can be tasked more specifically. They don’t have to worry about much more than being a miner, which makes them better suited for maximizing hashing power. If you’re a computer gamer, you’d know that the prices of graphics cards have skyrocketed in the past months due to the rise in popularity of cryptocurrency mining. What’s also great about GPU mining is that it’s much more profitable due to the sheer scale of what you can do with it. Where only one CPU can be used for a single CPU miner, you can have 8 graphics cards all mining on one computer! This makes the overhead cost of hardware more committed to buying better graphics cards than worrying about the other components of the computer. But what if you could buy an all-in-one solution that was far superior to mining with CPUs or GPUs? Where CPUs and GPUs have to be good at many different things, this device would have one single purpose: to mine cryptocurrency as fast as possible.
This is what an ASIC is. It is built as the final evolution in the pursuit of faster hashing power. And it naturally splits the crypto community in two. After all, if an ASIC is only produced by a single company, that company can charge what they want for it. When only those who can afford the ludicrous price acquire them, they then make CPU and GPU miners obsolete. It then becomes an arms race of whoever has the most ASICs. If there’s a new version of the ASIC or the coin it’s designed to mine changes, the older ASIC becomes essentially worthless. This is in stark contrast to GPUs or CPUs, which can mine many different cryptocurrencies and have high resale value. The reason we’re discussing ASICs is that two prominent cryptocurrencies that were GPU dominated, Ethereum and Monero, just had ASICs developed for them. This would mean that miners currently using GPUs to mine these coins will now be severely out-competed by ASIC miners. Thankfully, both development teams behind these coin in particular have publicly stated that they will “hard-fork” to alter their coin in order to prevent any developed ASICs from working. While it solves today’s issues, it’s certainly concerning that nearly every major cryptocurrency mining algorithm has had an ASIC developed for it. It could be that mining becomes a purely ASIC dominated space, as it’s already looking like. We don’t like this possibility as ASICs are typically bought up in large batches by those who have the means, meaning the networks they mine on are now much more centralized. Whatever happens, it will be interesting to watch the cryptocurrency community evolve as ASICs become more dominant while more mainstream and institutional investors enter the space.
How will the Swap be made?
The Token Swap will be implemented through our ICONex wallet and the exchanges that we are listed on.
- Token Swap using ICONex
Using the Token Swap feature in the ICONex wallet, you can directly exchange your ERC20 ICX tokens stored in the ICONex ETH wallet to be exchanged and moved to the ICONex ICX wallet as mainnet ICX coins.
- Token Swap using exchanges
If you are holding your ERC20 ICX tokens on the exchanges, you do not need to go through a seperate Token Swap process. The exchanges will automatically swap the ERC20 ICX tokens to mainnet ICX coins.
When will the Token Swap begin?
The Token Swap feature in the ICONex wallet is currently ready. However the Token Swap schedule through the exchanges are still being adjusted. We are postponing the Token Swap so that both Token Swap processes can be started at the same time. The exchanges currently do not support mainnet ICX to be traded. If the Token Swap process using the ICONex wallet is opened before the exchanges support mainnet ICX coins, it could lead to unintentional trouble or financial loss where you cannot sell the mainnet ICX coins in the exchanges. (Once the Token Swap is made, the mainnet ICX coins cannot be swapped back to ERC20 ICX tokens) To protect users from any unintentional trouble or financial loss, we have made additional developments so that the ICONex Token Swap feature will be enabled aligned with the exchange’s status of supporting mainnet ICX coins. (You are free to check the feature, but the actual Token Swap does not happen at the moment.) We will be announcing the start time of the Token Swap through our SNS channels(Blog, Reddit, Telegram) and email as soon as the exchanges are ready to trade mainnet ICX coins. The Token Swap feature will be enabled accordingly.
Will I be able to trade ERC20 ICX tokens?
The current ERC20 ICX tokens will be tradable in the exchanges as usual. Also, even after the Token Swap procedure begins, you will be able to trade and send your ERC20 ICX tokens until the Token Swap period is over.
How long will the Token Swap last?
The Token Swap will last for three months. The exact starting date will be announced once the exchanges are ready to trade mainnet ICX coins. We will be continuously sending notifications through our SNS channels and email. You can swap your ERC20 ICX tokens to mainnet ICX coins anytime during the Token Swap period.
Will the ERC20 ICX tokens be burned?
When you swap the ERC20 ICX tokens for mainnet ICX coins, we will retrieve the ERC20 ICX tokens and exchange them for mainnet ICX coins in return. The ERC20 ICX tokens retrieved will all be burned so that it will not be able for further use. For the ERC20 ICX tokens that do not participate in the Token Swap procedure, they will be locked after the Token Swap period is over so that not even the ICON foundation can use them.”
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:
For flipping Neutral.
For long-term holding Neutral.
What is it?
The Hyperion Fund functions as a syndicated venture capital fund that provides independent investors access to the earliest stages of investing in blockchain projects
What is our verdict?
What we like: Potentially very needed in this market. Could help take the guesswork out of finding good projects.
What we don’t like: Investors know nothing about the fund managers’ ability to find good investment opportunities
Technical Analysis Research
We do have movement in the crypto market…you just have to find it. In today’s video, I walk you through a somewhat “hidden” feature of TradingView that allows you to see what’s moving today, or what the performance has been over a set period of time. You can also edit this screener to look for specific technical signals/extremes, which might be very useful for us. Let the computer do the legwork, and sharpen your saw before we start to get real movement in this market.
My focus in the short term is going to be building a short-term swing trade solution. I know the basics of what I want to build, after which the intent would be to broadcast any entries/exits into the Telegram group. I might begin trialing a second bot-trader in the near future; the current vendor that I’m using appears to be working well, it’s just….hard to use and to understand and is not for the faint of heart. If you have trouble navigating our member’s area, you’d find it impossible to use. Eventually I will do a full bake-off between these vendors.
If you missed Wednesday evening’s webinar, “More Profits in 2018; Ten Ways to Chart Like a Pro.” then you can catch the replay here. My new class “Introduction to Technical Analysis” is now available via our online store.
If you go to buy any of our courses at our online “store” you can receive $10 off the $59 street price with your member’s “coupon code” of member18crypto..
With overall crypto markets in a dull corrective market, I’ll continue to focus more on the larger cap coins until they break loose, then it will be a better market for alt-coins. Moves are not sustaining right now.
I am doing the majority of my Technical Analysis work on TradingView and Coinigy, and I have a BitFinex app on both my iPad and Android smartphone. All of these charting platforms call a TradingView API. TradingView is the 800 lb. gorilla in the Crypto charting space until the “established” players want to make a go at Crypto, like Ninjatrader, Tradestation, eSignal, Sierra charts, etc. My sense is that TradingView has such a head start that it will be very difficult for the big boys to make a dent in this space for a while. Until that point, TradingView has almost a monopoly in this space. 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.
I will also be experimenting with the Profit Trailer app which might be useful in this choppy market. I hope to share results and tips/tricks with you in here once I get this bot up and running.