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April 10, 2018

Crypto Market Commentary

Minor Reversal

Positive Sentiment Returning?

We’re seeing an uptick in today’s markets, which serves as a nice relief after yesterday’s violent sell-off. Unfortunately, the volume is declining so this might be yet another short-lived movement upwards. As we said yesterday, the market is in a holding pattern until next week, but again we don’t anticipate the skies to clear immediately after Tax Day.

Be aware of the Wyckoff Market Cycle for a market such as this.

 

“Rule One: Don’t expect the market to behave exactly the same way twice. The market is an artist, not a computer. It has a repertoire of basic behaviour patterns that it subtly modifies, combines and springs unexpectedly on its audience. A trading market is an entity with a mind of its own.

Rule Two: Today’s market behaviour is significant only when it’s compared to what the market did yesterday, last week, last month, even last year. There are no predetermined, never-fail levels where the market always changes. Everything the market does today must be compared to what it did before.”

 

Expecting the market to do something is only half the battle. Any good General will have both an Offensive as well as a Defensive strategy.

 

Wouldn’t it be nice to “rent” part of your computer’s computational power while you’re asleep or doing non-intensive tasks? That’s the aim of the project Golem, a market for selling your computer’s excess CPU power to use for other people, akin to a “worldwide supercomputer”.

 

The project launched with much fanfare back in 2016, raising $340 MIllion in just 20 minutes. Golem was one of the earliest Ethereum applications and received a lot of attention as such, but the cheering died down as they had to work very hard to get their product working. Two years later we finally can see the result of that work now that their platform, Brass Golem beta, is live.

 

“This is typical for software development in general, and blockchain in particular, we underestimate the complexity of what we want to do,” said Julian Zawistowski, CEO and founder of Golem. “You always underestimate how difficult it is, and this was obviously the case with us.”

 

While the project is still far away from its mission of a worldwide supercomputer, the Golem mainnet launching has resounding implications for both the project, as well as Ethereum itself.

 

“We have to see how it behaves in the wild,” Zawistowski said.

 

Currently, all the platform is capable of is assisting render times with the 3D modelling software, Blender. Certainly, more computational power means faster render times, allowing for CGI artists to spend more time creating and less time waiting.

 

Time will tell if they can truly provide something unique and beneficial, but this is definitely exciting to see crypto take its first foray into real application and use.

 

Zawistowski compared building an application on top of Ethereum and working to create crypto solutions as similar to web development and infrastructure building in the 90s. While web developers today have a host of tools to choose from when building web applications, in the early days, developers had to start from scratch.  “Very often you have to invent the wheel to solve your problems. Not reinventing the wheel, but actually inventing the wheel.”

 

Compounding the good news for Ethereum, today OmiseGo ($OMG) announced they would be collaborating with MakerDAO, which is a dual coin system that is aiming to solve our issues with Tether and Bitfinex. MakerDAO is comprised of Makercoin, token with a volatile price that is used to govern the Maker Platform, and DAI, a stablecoin like Tether. If this is your first time hearing about Maker/DAI, it’s a really intriguing pair of tokens which will be extremely important to the Ethereum ecosystem. DAI is a stablecoin (meaning it doesn’t fluctuate in value, which is very useful for locking up funds during a bear market) that runs on a smart contract. It’s not backed by gold, or USD, or a bank. It’s backed by Ether, the currency of Ethereum. The obvious problem is that Ether is really volatile as we’ve seen it go from $1,400 to $400 this year. So that’s where Maker comes in, the part of MakerDAO system that gives us the transparency we’re severely lacking with Tether.

 

Tether will print hundreds of millions of dollars at a time and we have no insight as to whether or not they’re being genuine when they claim that 1 Tether is backed by 1 Dollar in their reserves. Maker essentially solves this by automatically liquidating Ether stored in its contract as the price changes. Smart contracts on Ethereum are open and transparent, that’s why they’re a big deal. So, we can verify the reserves of MakerDAO because the reserves are the currency. Not only that, it’s going to become more and more trustworthy and stable as they come out with the Multi-collateral version soon. Gold, cryptocurrency, and other uncorrelated assets being used on the Maker system could make DAI one of the most stable assets in human history. Its stability will asymptotically approach the stability of USD as it improves and becomes more established, and then it can even peg stability on itself if it senses the USD is becoming unstable. Certainly, the next time we sense a top, we’d love to secure our gains with a stablecoin like DAI once we feel confident trusting our money with it.

 

So, back to how this is great for OmiseGO.

 

“OmiseGO shares our passion for building a robust ecosystem and is in the process of developing a wallet SDK and DEX that will be vital to the utility of the overall network. The live OMG network will be a performant and secure proof-of-stake network which will enable high transaction throughput at a low cost.”

 

Maker is positioning their stablecoin as the completely decentralized option for stability and price predictability. Without DAI, network participants must either subject themselves to the volatility of the crypto markets or face the expensive and inefficient process of converting their crypto to fiat.

 

This means you can effectively have trading pairs that are pegged against the DAI instead of relying on a questionable asset like USDT (Tether) or facing potential tax obligations if you cash out to fiat temporarily.

 

Not only that but as we’ve said Decentralized Exchanges (DEX) are going to be the trend in cryptocurrency trading in the coming months and years. OmiseGo having a robust, scalable, and fast platform thanks to Ethereum’s Plasma and with an excellent Tether alternative will be very compelling to traders.

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

So what we’re seeing today is some positive sentiment from Europe. European Commission (EC) Vice-President Andrus Ansip made remarks about Europe becoming a world leader in digital innovation. Europe is “home to the world’s leading AI research community,” Ansip argued.   “[Blockchain is] now moving out of the lab and going mainstream. As with [artificial intelligence]: we should make the most of this new opportunity to innovate,” said Ansip.   This comes after China yesterday revealed a new Blockchain development industrial park and a 1.6 Billion dollar fund to support blockchain projects.   The government in Hangzhou has attached great importance to blockchain technology, ranking it just behind artificial intelligence and virtual reality technologies. “AI and blockchain as the areas where Europe is best positioned to play a leading role. However, it is no secret that we have to invest – both politically and financially. There is quite some ground to catch up. Other continents are moving ahead quickly,” said Ansip

Today’s EU positive sentiment matches perfectly with one of the brightest stars in our portfolio, Origintrail. 

They’re moving forward in so many ways that it’s truly exciting to see where they are and where they’re clearly going.

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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:

 

Morpheus Network

For flipping Neutral.

For long-term holding Good.

What is it? 

Morpheus Network simplifies and automates the logistics needed for any complex, international shipment for any company or individual. This is achieved by our talented team containing shipping, customs, banking and accounting experts with deep knowledge and extensive experience. The result is a “FULL SERVICE” IMPORT AND EXPORT SYSTEM abiding by all customs laws and regulations globally. Also included is the automated generation of digital, ORIGINAL shipping documentation and contracts for the first time ever which are predetermined and templated.

What is our verdict? 

What we like: Great focus on bizdev. Great potential given the breadth of the industry.

What we don’t like: Lots of competition in this field and Morpheus needs to do more to stand out.

 

  • Project name: Morpheus Labs
  • Token symbol: MITx
  • Website: https://token.morpheuslabs.io/
  • White paper: https://token.morpheuslabs.io/assets/documents/WhitePaper.pdf
  • Hard cap: 12,000 ETH (ICO contributors receive 25% of total token supply)
  • Conversion rate: 1 ETH = 8,000 MITx
  • Maximum market cap at ICO on a fully diluted basis: $18 million assuming current ETH price of $380
  • Bonus structure: 50%/35%/20% bonus during presale
  • Presale or white list: Over already
  • ERC20 token: Yes
  • Countries excluded: Not announced publicly
  • Timeline: Crowdsale ongoing until April 15, 2018 (Please refer to Morpheus Lab’s website for the most up-to-date information)
  • Token distribution date: Immediately after contribution

Website: https://token.morpheuslabs.io/

Whitepaper: https://token.morpheuslabs.io/assets/documents/WhitePaper.pdf

Technical Analysis Research

Positive divergences and sideways behavior means that I think there’s a trade-able swing to the upside about to show up; I’ll discuss this in today’s video. As this shows up I’ll hone in on what I’m looking to take long within the context of this swing.

 

 

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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