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April 16, 2018

Crypto Market Commentary

Some slippage but the overall short-term trend still intact

Are we in for a crazy day tomorrow?

Welcome to day number five of this reversal trend.

What’s immediately apparent is that there hasn’t been a massive sell-off or a complete drop in volume. Granted we only truly had four days of upward movement as today’s market saw a couple points lost, but importantly the larger trend is still intact.

 

We haven’t had more than four days of positive movement since early February so I’ll chalk this up as a win so far. Both market cap and volume are holding steady and that is reassuring. However, there are quite a few traders holding their breath for tomorrow. Not only does tomorrow represent the tax deadline for the US, but we are also closely watching the upcoming partnership announcement for Verge privacy coin. Some are speculating that following tax day we’ll see a massive inflow of capital, and that Verge is planning some sort of exit scam after defrauding investors of millions of dollars after a fundraising campaign to reveal their new partnership.

 

As we’ve said, there is likely no mountain of money waiting to rush into crypto simply because we’re past Tax day, and that any significance tomorrow holds in the mind of the market will be a mental one. People have been saying the same thing about the equities markets for years and yet it almost never amounts to much. Or, we can look historically to crypto and see that for the last three years there has been no large trend directly correlated to mid-April. Anyone who says otherwise probably was also saying that this bear market would turn around when Wall St. got their bonus checks or after the Chinese New Year.

 

Regarding Verge, we’ve been very concerned with the actions of the development team for the past few weeks. Announcing a fundraising campaign with the goal of nearly two million dollars worth of Verge only a week after their Twitter had been hacked is certainly tone-deaf for a company that’s supposedly about security and anonymity. But what’s truly asinine is making the reward for hitting the fundraising goal (with a deadline of less than a week!) the announcement of a new partnership that will “change crypto forever”. Truly, this is something you can only see in crypto, folks.

 

Needless to say, we’ve not regretted our decisions to downgrade then later exit our verge position. Since we left, some of our subscribers have written in to challenge this decision as Verge was one of the strongest performing coins in the top 100 last week. It’s fair, we could have likely held on a bit longer and exited the position a bit richer, but for us, it was not worth the risk. The development team has been caught openly lying several times since we exited. Most notably this weekend they were identified as moving the fundraised Verge to a Binance account, likely to sell it, but claimed this was to pay the Ledger team to integrate their coin into the Ledger hard wallet ecosystem. Except, the Ledger team doesn’t work that way anymore (thousands of dollars for integration) and they confirmed that no one on their team was working on Verge integration nor had they been contacted to do so.

 

While it’s a bit extreme and a bit too early to call Verge the next Bitconnect (Vergeconnect?), this is a prime example where people’s greed is getting in the way of their senses. Any rational person can tell you where there’s smoke there’s fire, and with Verge there’s a LOT of smoke. But despite this, the price continued to go up because people were more willing to jump in on an extremely risky appreciating asset than to play it safe. If Verge does indeed exit-scam tomorrow (I’m betting the odds are 25% in favor of that happening) then we will likely see the price crash to nearly 0.

 

Just look at Bitconnect. At it’s high it traded for $440, but then right before the team bailed on the project many of the insiders got out just in time. Now it trades for $1.40 and many people lost their life savings. While Bitconnect was active, I’m sure it was enticing to see how much theoretical money you could make with a guaranteed daily return. There were videos all over Youtube trying to demonstrate how easy it was to make money and how these guys who got in early had made hundreds of thousands of dollars. Like a game of musical chairs, someone had to get burned when the music stopped.

 

The point here is that with crypto it can be very easy to lose yourself in the fantasy of get rich quick and easy money, but the cold hard truth is that for every winner there is a loser. Some people make enough to retire on, and some people lose their ability to retire. It’s certainly no different in any other market, but it’s definitely amplified in crypto due to the volatile nature of the space.

 

So rounding off our summary, we’d like to see Bitcoin maintain this level and perhaps consolidate here for a few days. If Bitcoin can break through the $8,500 level then we’re certainly in business for more bullish gains. Should Bitcoin fall back down, I can’t see it staying below the $7000 level for long or at all. We still have a long way to go before this trend can sustain itself and make a recovery reality, but we like what we’ve seen so far.

 

What’s ironic to me is the “death cross” on Bitcoin we saw at the end of March was potentially the nail in the coffin of the Bear Market itself. Likely that event saw more people pile into Bitcoin shorts which as we noted were at an all-time high on Thursday. In effect, the Bitcoin and later Ethereum death cross events were really bear traps, which is poetic in some ways.

Last for today, we have seen a lot of articles that have highlighted the lack of reported crypto gains in taxes. We make it our policy to not give tax advice as it opens us up to a world of legal trouble and frankly if you’re at the point where you can ask questions about crypto and taxes, then you should also be at a point where you can hire a professional accountant to help you. That being said, it’s completely legal for us to stress that failing to report your crypto capital gains could lead to serious repercussions with the IRS or tax agency of your country. We are increasingly getting to the point where tax agencies have the ability to notice if you didn’t report your gains. Again, we can’t give tax advice, but articles like this one are a great place to start if you have questions.

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

I just saw this brilliant new scam where some guy pretended to be clueless and posted a plaintext version of his private key for myetherwallet on online forums while asking simple, beginner level questions. If you don’t know what any of those words meant, basically he was giving people his social security number, driver’s license, and birth certificate in exchange for asking for directions. Not exactly quid pro quo. Now, the brilliant part is that when people used the private key to look up this wallet, they saw there was $5000 worth of coins on that wallet.

The guy basically handed them the keys to his safe because once you have someone’s private key, you can own their crypto pretty easily. Now, the problem is that in order to send a ERC20 token from myetherwallet, you need to pay the transaction fee in gas, which means you need Ether on that wallet. It would only be a little bit, so you’d need to do is transfer a couple dollars worth of ethereum to this sucker’s wallet in order to make out like a bandit. But here’s the thing. This guy wasn’t an idiot. He wrote a script that would auto transfer any Ether that was deposited to that wallet into a secret second wallet. His $5000 of coins was just a honeypot, there was no way you could steal it even if you had his private key. All told, he only made off with around $400 of Ethereum so it’s not like he’s a criminal mastermind, but this is just one example of how people take advantage of other people.

All scams play off of people’s greed or ignorance.

A few simple steps, though, can help you be guarded against a swath of common attacks.

We’re having a free webinar on Wednesday to discuss these steps. Sign up here.

 

 

Jun, the CEO of OmiseGO, met with APEC today. They discussed the power of Ethereum and consequently OmiseGo for pushing forward payment and financial services.

 

 

APEC is the Asia Pacific Economic Committee and they coordinate free trade between over 20 countries including China, US, Canada, Australia and all major SE Asian countries.

We see this as a great indication of the direction that both OMG and ETH are taking. OMG is helping to usher in a new era of payments and banking and it’s very exciting to see that happen in real-time.

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:

Profede

For flipping Neutral.

For long-term holding Neutral.

What is it? 

Merculet is created to lead the transformation of turning the information-based internet into the value-based internet. Merculet uses blockchain technology to convert attention into token so that individual user’s value can be recognized precisely. Users pay attention, corporates assess the value of users’ attention, convert it to a part of corporate’s value chain and then reward the users accordingly.

What is our verdict? 

What we like: People can make money via app usage they already have, which should entice adoption.

What we don’t like: No alpha, system seems like users could try and take advantage of it.

 

  • Project name: Merculet
  • Token symbol: MVP
  • Website: https://merculet.io
  • White paper: https://merculet.io/static/pdf/Merculet_Whitepaper_V0331a-EN.pdf
  • Hard cap: 37,000 ETH (21,000 ETH to be sold in presale, 16,000 ETH in public sale / ICO participants receive 30% of total tokens)
  • Conversion rate: 1 ETH = 70,000 MVP
  • Maximum market cap at ICO on a fully diluted basis: $64 million assuming current ETH price of $520
  • Bonus structure: 25% bonus for presale participants, with 5 month vesting period with 20% released every month
  • Presale or white list: Yes
  • ERC20 token: Yes
  • Countries excluded: China and USA
  • Timeline: Private sale ongoing (please refer to Merculet’s website for the most up-to-date information)
  • Token distribution date: 6 weeks following token sale completion

Website: https://merculet.io

Whitepaper: https://merculet.io/static/pdf/Merculet_Whitepaper_V0331a-EN.pdf

Technical Analysis Research

Profit-taking at the top of a swing; so far this is just a “lower high” among the major coins, although we’re starting to see some real accumulation occur on specific coins, such as ADA today. Seriously, I hope I’m dead wrong and being too pessimistic, however I’ve been through enough Bears to know how devastating they can be and I want to err on the side of caution for you all. We will see trade-able swings in the near term. This is the time that you should be “sharpening your saw” and perhaps nibbling on dips if you aren’t already holding a ton of bags. Just understand “rule number one of risk management” which is to define your exit BEFORE you enter the position..

 

 

 

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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