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April 29, 2018

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Crypto Market Commentary

Week In Review

Market Gets Knocked Down, But It Gets Up Again

The market proved this week that it has no intention of returning the reigns to the bears just yet. A sharp correction on Tuesday gave some worry that the cycle had ended, but the market was able to recover, ending the week up an impressive 14% overall.

As this market climbs higher, it becomes more and more apparent that Bitcoin can’t keep up the pace. Despite the 14% market climb, Bitcoin grew just 5%. Ethereum fared somewhat better, but still below par at 10%. Bitcoin’s market dominance hit a quarterly low of just 36.5%, down from 44.9% at the beginning of this month.

 

Tuesday’s sharp pullback brought a spike in volume that has largely not subsided, breathing additional life back into the market and giving us opportunities we haven’t seen in quite some time. Just within the top 25 over the last 7 days, Tron is up 60%, EOS is up 80%, and Aeternity is up an astounding 135%!

 

Gains like these, the market volume where it is, and the length of the current cycle have us feeling pretty positive for market movements in the upcoming week. That being said, don’t forget that we are very much still in the larger downtrend and anyone who started investing in January is acutely aware that we’re only halfway to our high water mark.

 

This week we saw some exciting developments towards more mainstream adoption. In particular, the Nasdaq exchange becoming a cryptocurrency exchange was certainly on a lot of trader’s minds after comments made by the CEO stating that they were open to that possibility. Combine this with the cryptocurrency exchange Gemini officially partnering with Nasdaq in order to monitor for market manipulation and fraud and we seem to be moving in the right direction. Rumours are circulating that the Nasdaq will begin trading Bitcoin in October but these rumours are unsubstantiated, especially considering they’ve explicitly said they will wait until the regulatory landscape looks favourable (which is the case with many institutions looking to enter crypto).

 

That seems to be the prevalent rhetoric, according to a new Thomson Reuters survey, as cryptocurrency trading by financial firms could increase in 2018. 20% of over 400 firms surveyed indicated they are “considering” trading cryptocurrency over the next 12 months, with 70% saying they plan to do so over the next 6 months and an additional 22% over the next 6–12 months. What was interesting for us is that the survey also found generally widespread familiarity with cryptocurrencies.

 

“Cryptocurrency is still a relatively small part of the trading market, but this survey makes clear this niche segment is starting to enter the mainstream of the financial services industry. This is a major change from a year ago,” said Neill Penney, co-head of trading at Thomson Reuters

 

But it wasn’t all sunshine this week with major players. Again, we had titans of the existing system weigh in against cryptocurrencies.

 

Bill Harris, short-lived CEO of Paypal, called Bitcoin, “a scam… a colossal pump-and-dump scheme, the likes of which the world has never seen.”

 

Then this weekend, Warren Buffett, in an interview with Yahoo Finance, claimed that “buying Bitcoin is not investing,” saying that, “If you buy something like a farm, an apartment house, or interest in a business, you can do that on a private basis, and it’s a perfectly satisfactory investment. You look at the investment itself to deliver the return to you. Now, if you buy something like Bitcoin or some cryptocurrency, you don’t really have anything that has produced anything. You’re just hoping the next guy pays more.”

 

With all due respect to the “Oracle of Omaha”, you can levy the same response to any blossoming tech sector. The early Internet companies didn’t “produce” anything, but that doesn’t mean they were not worth investing in. This is a man that famously doesn’t have a cell phone or computer in his office and that passed up on companies like Google and Amazon because they didn’t fit the paradigm he invests based on. Frankly, he knows little about technology and is notoriously a very conservative investor, so of course, he views a high-risk investment like cryptocurrency with scepticism.

 

This week we also saw MyEtherWallet, a popular online wallet interface for Ethereum and ERC20 token storage, have its DNS hacked. From the team: “This redirecting of DNS servers is a decade-old hacking technique that aims to undermine the Internet’s routing system. It can happen to any organization, including large banks. This is not due to a lack of security on the myetherwallet platform. It is due to hackers finding vulnerabilities in public-facing DNS servers.

A majority of the affected users were using Google DNS servers.

 

We recommend all our users to switch to Cloudflare DNS servers in the meantime.

 

Affected users are likely those who have clicked the ‘ignore’ button on an SSL warning that pops up when they visited a malicious version of the MEW website.”

 

Again, this was not a vulnerability with myetherwallet, but it should drive home a point that we stress over and over on this newsletter: take your security seriously. Even with this week’s scare, having your crypto on myetherwallet is still much more secure than having it on an exchange, and in the event that myetherwallet ever went offline, you’d still be able to easily recover your funds by running an offline, local version of myetherwallet. You cannot say the same thing about exchanges. If they went offline, you’d lose your crypto. Just ask anyone who had funds on Mt.Gox.

 

Remember: If you don’t control the private key, you don’t control your crypto.

 

Last for today, let’s briefly discuss what’s going on with EOS.

 

EOS is scheduled to migrate from the Ethereum network to its own on June 2, 2018. That alone is exciting and as we’ve said there is going to be massive volatility on that crypto leading up to the switch. Remember that if you haven’t already, you need to register your tokens BEFORE that date or you may be unable to transfer them.

 

Meanwhile, over 50 companies are vying for one of 21 supernodes that will support this new EOS mainnet. These 21 supernodes operate as part of EOS’s delegated proof-of-stake (DPoS) consensus mechanism. Some have criticized this structure saying that it’s intentional centralization (which is looked down upon in a space that values decentralization). In total, there will be 121 full nodes on the EOS network, but only the 21 supernodes will be mining blocks. Compare this to Ethereum, which has over 10,000 nodes in the network mining blocks through PoW. Less nodes mean less decentralization, less security, and less like a traditional blockchain.

 

Part of the reason heavily centralized cryptos like Ripple and EOS exist is they’re able to push high throughput when you only allow select players to use the network. Public blockchains, with their heavy decentralization, suffer from scalability issues due to the massive amount of nodes. Bitcoin is limited to ~3-7 transactions per second, Ethereum to 7-15. Thankfully, this will change soon with solutions like sharding scaling linearly with the number of nodes.

 

Nonetheless, 2018 is shaping up to be a very interesting year for the future of cryptocurrency.

 

Let’s get ready for another exciting week.

Talk to you this week.

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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 and are highly risky. 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

Last November over 360M in Ethereum was locked away by accident. As such, an unofficial vote took place over the last week to decide if a hard fork to save the lost funds would be acceptable to the community. The vote proposed to restore a disabled contract to unfreeze 587 wallets holding 513,774.16 Ethereum (ETH). The vote ended with a slight majority “no” vote today, indicating that the current Ethereum chain will remain whole and the funds will continue to be lost. Our recent addition of ELEC has been one of the only positive movers in the market today. This is due to the news that ELEC will be airdropped to OMG holders, meaning that anyone holding OmiseGo will receive ELEC. Token airdrop details are soon to come.
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:

Senno

For flipping Neutral.

For long-term holding Good.

What is it? 

Senno is the Blockchain’s first sentiment analysis platform with an open API for 3rd party apps. Based on NEO It utilizes distributed sentiment analysis and AI algorithms to create a Real-Time crowd wisdom ecosystem and sophisticated business intelligence analytics. Senno will revolutionize the way decision making is made in the business and private sector.

What is our verdict? 

What we like: Big data is huge, and big data with blockchain is even bigger.

What we don’t like: No MVP, and the team even highlighted this as risk in the whitepaper.

2 days left
Token
SENNO
PreICO Price
1.92 SENNO = 0.01 USD
Price
1.6 SENNO = 0.01 USD
Bonus
Available
Platform
NEP5
Accepting
NEO, BTC, Fiat
Soft cap
2,000,000 USD
Hard cap
25,000,000 USD
Country
Hong Kong
Whitelist/KYC
Whitelist
Restricted areas
USA, China

Website: https://senno.io/

Whitepaper: https://senno.io/SennoWhitepaper.pdf

Technical Analysis Research

Most crypto markets that we follow are seeing “range contraction” after three very good weeks, which is precisely what I want to see to support future gains. Much as we’d like to see a return to December’s crazy parabolic action, the wiser route would be a return to a linear, positive market. We can always wait for the FOMO and perhaps some more people will recognize it next time and learn to sell into strength, and not chase after it.   In today’s video I picked apart the ONT/BTC swing trade that I recently made, so I used it as a case study. I hope it helps those of you who are new to this venture.   Here are the recent swings that we’re tracking in the portfolio below:

  • ONT/BTC – I went long on ONT/BTC @ .00051650BTC. (4/24)  Per the recent advisory I set a limit order to sell the position at recent highs of .0007BTC, which fired Saturday (4/28) for approximately a 35% return on invested capital.
  • WTC/BTC – Long @ .00155980BTC (4/23). My target exit is at .002BTC. Doing just fine.

Please keep in mind that if you want to follow these trades, I am using FIXED RISK POSITION SIZING. This means that I am using a fixed amount of risk capital that is based on my account size, like 2%. I am assuming that the trade will burn to the ground and that I will lose that entire capital position! Only in this manner can one effectively manage a position the way that you have to. If you’ve every checked your blockfolio nervously every 5 minutes when you’re underwater, this will prevent that.   I will track these positions in this area and not in the main portfolio section. I will use a public portfolio tool to do so, which you can access by clicking below:

Public Swing Portfolio Link

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. We’ve started to do some swing trades on alts, tracked in the previous section.
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 am also trialing the Profit Trailer and CryptoHopper trading apps which are working well in this choppy market.

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