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April 9, 2018

Crypto Market Commentary

Bear Wakes Up

Will Tax Day Save Us?

Today’s market saw us climb to a 5 day high of 273 Billion before we plummeted back down to the 250’s. While it can be frustrating to see such violent moves erasing a weekend of gains, remember that the market has a purpose to act independently of what most people expect. If people see the market rising and they jump on board, the market will drop. If people are feeling defeated and calling it quits, the market will rise.

Most importantly, there’s going to be a fever building over the next 7 days as we approach tax day in the US. While it is intoxicating to believe that we’ll see a resounding recovery afterwards, as the rhetoric seems to be alluding to, we have doubts that this will be a catalyst for a bull market.

 

Gemini, the cryptocurrency exchange founded by the Winklevoss twins, has released a new feature called Block Trading, which, “enables our customers to buy and sell large quantities of digital assets outside of Gemini’s continuous order books, creating an additional mechanism to source liquidity when trading in greater size.”

 

Essentially it will allow “whales” to execute substantial trades outside of the exchange’s continuously-updated order books, where a single trade can have an tremendous effect on the market dynamics.

 

“Any customer can place a block order that specifies: (i) buy or sell, (ii) quantity, (iii) minimum required fill quantity, (iv) and a price limit (the “Indication of Interest”). Market makers only receive quantity, minimum quantity, and the collar price — they do not receive any other information (i.e., side, price limit, etc.) related to the block order. If a market maker agrees to “make a market” that satisfies the Indication of Interest, the block order will be filled.”

 

The sell-off over the past few months have proven the need for such a service. On the other hand large buy orders have spurred colossal rallies, which could be another reason institutional traders are less prone to trade these markets.

 

In other news, there were two news stories today about the troubled block-lattice based currency, Nano. As a refresher, the Italian based exchange Bitgrail was hacked of $200 Million dollars worth of Nano earlier this year. As such, a class-action lawsuit has been raised against the development team arguing that they could perform a “rescue fork” to compensate the victims of their stolen funds.

 

Seemingly in response, the Nano foundation announced that they would be starting a legal fund to help the victims. Their goal is to raise 2 Million in legal funds in order to hold Bitgrail accountable.

 

“With regards to the ongoing investigations, we continue to cooperate with all relevant law enforcement authorities, and are doing our best to help advance their investigations.To date, all reliable evidence we have reviewed continues to point to a bug in BitGrail’s exchange software as the reason for the loss of funds.

 

While we recognize that the total value of the legal fund pales in comparison to the funds lost by the BitGrail victims, we are hopeful that it will give the victims the best chance to maximize their recovery. It is our belief that through ethical stewardship the cryptocurrency community will make much needed progress in their shared effort to convince individuals, institutions and governments worldwide that global, decentralized currencies are feasible, stable and worthy of support.”

 

To join the efforts of the 1400 victims seeking justice in Italy, send an email to Mr. Enger at bitgrailvictims@gmail.com, providing your name, country of residence and the amount of Nano in your BitGrail account.

 

We appreciate the efforts of the development team here and believe this is the correct course of action. They should not be forced to alter their currency in order to compensate the victims. While that sounds like the path of least resistance, it fundamentally undercuts the principles of the currency itself and the devs have stated that don’t believe it to be possible, anyways. Conjuring up 200 Million will not solve any problems, and it will cause the value of Nano to crash.

 

We can see here what happened to Ethereum after a similar set of circumstances caused Ethereum to fork into Ethereum and Ethereum Classic:

Lastly, we want to cover the comments of yet another set of remarks on the crypto market in 2018.  

 

Adrian Lai, founding partner of Hong Kong-based crypto investment firm Orichal Partners, has forecast that in 2018 the crypto market will “mature” and increase its trading volume. In particular, this will attract investment from institutional investors.

 

“Regulators are not banning the development of cryptocurrencies, but are trying to better regulate the market, which should help the industry mature (…) If the regulatory stance gets clearer, large funds will be more assured and willing to commit significant capital.”

 

This is a sentiment that we share. The market movement we saw at the end of 2017 was irrational by everyone’s standards, and we’re seeing the response to that in the market today. But that’s not the end of crypto’s story. While it’s easy to be optimistic that regulators will have all of this figured out in 2018, we’re not holding our breath. At the same time, we foresee the coming flood of regulation as countries compete with each other to be havens of blockchain technology development. Moves like India’s last week will only serve to enable brain drain of talented developers and designers to places like Malta, which is quickly becoming “blockchain island”.

 

Regardless, we have to stress that if you’re reading these words, you’re still extremely early to the coming wave of innovation and investment. The sun is not setting on crypto, it’s barely risen.

Talk to you tomorrow.

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Offense – Adding Trades

Offensive Actions for the next trading day: 

  • None.

Defense – Managing Risk

Defensive Actions for the next trading day: 

  • None.

Current Portfolio

Desired Holdings

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.

None.

None.

Tier 2

MOD

 Tier 3

REQ

SUB

LINK

NANO

KNC

Tier 4

BNTY

TAU

WISH

PHR

LOCI

XBY

ELA

ECC

POE

HPB

BIX

EVE

XVG

NULS

DNA

How to read this portfolio: Ticker: Contains the ticker code for the coin. You can search this ticker in Coinmarketcap to learn more about the coin. The color denotes the risk tier by our evaluation. Dark Red = T1, Dark Green = T2, Dark Blue = T3, Light Blue = T4 (Colors in the Ticker column do not interact with the colors in the other columns) Cost Basis = Our average purchase price for this coin. Current price = The average price of the coin based on the exchanges it is listed on. Strategy = What we plan to do with this coin. Staking is receiving dividends for that coin. Master node is also staking, but with a higher return rate for having a (large) number of that coin. Stop = Our exit point, if it exists What do the colors mean? The colors in the ticker column represent the risk profile of that coin. The colors in the other columns reflect what sector(s) that coin belongs to. Some coins belong to multiple sectors, which is indicated by multiple colors. 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 ($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

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

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

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.

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.

NAVCoin

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

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.

Tier 3 coins are those coins which we have moderate investments and we believe have a possibility of high performance in the future, but as of yet have not shown enough performance to reduce their risk profile. Tier 3 coins are coins which are moderately risky, but due to our risk analysis of the project and team we believe have minimal chance of failure. 
Tier 4 coins are coins which we have minimal stake in, are highly risky, and we are contributing no more than 2% of our portfolio to. These coins represent the outer fringe of our risk analysis, in that we have little information to work with, have little insight into the coin’s performance, and at the very best we are making an educated guess that they will be successful. If a coin performs well and proves that it has a commitment to its compelling feature, it will be moved to the Tier 3 status.  

ICON

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

NEO has been one of the only positive movers today with the news that there will be a new $1.6 Billion blockchain fund launching with Chinese government backing. This was announced at te opening ceremony for the new Blockchain Industrial Park in Hangzhou. This Chinese city is noted for its innovation and is home to major companies such as Alibaba.

With the recent Monero hardfork, mining the privacy focused coin has become very profitable again. Essentially, this comes down to our comments about ASICs last week. As a brief refresher, ASICs are much better than GPUs at mining, but can make the network centralized as their high cost makes them affordable only to those who have the means, whereas most computers have graphics cards. Monero’s team hard forked their coin in response to the news that Bitmain would be publically selling ASICs capable of mining Monero, which have not been offered before. What’s interesting is that after the fork, the mining difficulty was now 50-80% of the difficulty before the fork.

This, combined with people who bought the ASICs complaining that they appeared used and even had dust inside them, leads us to believe that Bitmain has had Monero ASICs for some time. They simply decided to sell them when they were no longer as profitable, and given that they sell them for thousands of dollars, they could easily make back the cost of the RnD. Now that Monero has hard-forked, there’s no longer any ASICs on the network, meaning that the difficulty has gone way down and the profitability way up. It’s inevitable that ASICs will return to the Monero network, but for right now it’s a great money-maker if you have the graphics cards to mine with.

We’re watching a relatively unknown coin, XTC, have a nice run on the Stellar exchange. As Stellar grows in popularity, much like NEO, we’ll continue to see excellent investing and trading opportunities like this.

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:

Sentinel Protocol

For flipping Neutral.

For long-term holding Good.

What is it? 

From identifying the problems in current security and blockchain industries to designing the Sentinel ecosystem and incentive scheme, the whitepaper explains the entire focus of the Uppsala Foundation. By applying blockchain technology to the cybersecurity space, Uppsala is building a truly decentralized yet safely connected crypto world.

What is our verdict? 

What we like: Security is essential in this space. This project might help the space forward in this aspect.

What we don’t like: Only as effective as people’s reports are. Without a lot of reports, there’s not much for the DApp to operate on.

 

Website: https://sentinelprotocol.io

Whitepaper: https://sentinelprotocol.io/Sentinel%20Protocol%20Whitepaper%20English.pdf

Technical Analysis Research

This is still a “Trader’s Market.” This means that we’ll see brief swings up that eventually will get faded back down into the major downtrend. Bear Market Rallies like this can be very strong, although we haven’t seen a decent one since February. Bear Market Rallies create false hope and get weak-hand “longs” to load up, thinking “this is the ONE!” only to be disappointed later. Trust me, when the REAL bottom is in, no one will be on board but you and me. Everyone else will be looking for more downside.

 

I’ve hit my own personal wall; I finally got so frustrated by the barrier to entry for Profit Trailer that I’m letting Mav take ownership of my account and am letting him drive. Perhaps I lack the patience to read through a disorganized wiki, to search online for “random dudes cutting youtube videos,” and to figure out the bizarre organization of a Discord page. I’m thinking that if you grew up gaming or have been a software developer over the past five years, then all of this is no problem. This is obviously a tool written by developers for developers. If you find the installation, configuration and maintenance of this tool simple, then you have my respect and I salute you.

 

What I have found as an alternative that is more my speed is CryptoHopper. Easy, intuitive interface, very simple integration, and cloud-based to boot. No VPS or dedicated machine necessary. The biggest difference is that it’s subscription-based, so over a lifetime of use ProfitTrailer will be more effective, but for those that find .03 BTC to be a steep cost, the lower tiers of CryptoHopper allow you to get your feet wet for a lower initial cost. I’m two days into this so let me get some more experience and I’ll give you an update soon.

 

If you missed my earlier 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.

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