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August 15, 2018

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Crypto Market Commentary

Mav's Daily Commentary

 

Markets Rebound Off 8 Month Low

Altcoins Outpace Bitcoin

 

The market gained back the 10 Billion it lost yesterday before settling somewhere in between.

What’s going on? A small short squeeze combined with market disgust over recent losses combined with renewed vigor for the ETF after the CBOE President made positive comments. For now it could just be a reflexive move — market volume is still pretty low.

Remember we are a week away from another ETF decision. How the SEC decides that one will affect the Direxion (Futures backed) and VanEck / SolidX (Commodity Backed) ETFs. The Proshares ETF is much more of a weathervane than the Winklevoss ETF decision.

That said, shorts are still extremely high. The last time we saw them around this level predicated the mid-April bull run. It will be interesting to see if they are blown up like last time.

Meanwhile, today showed promise for restoring investor faith in seeing this market turnaround.

 

Let’s start with the Bitcoin ETF.

 

“As we chip away at their issues to make them less concerned, at some point they’ll be comfortable with an ETF,” said Chris Concannon, CBOE president and chief operating officer.

 

The SEC is mostly concerned about manipulation in the unregulated digital currency markets.

 

“Having the underlying futures come to market first, prior to an ETF, I think you have a healthier, more mature market,” Concannon said. “The problem with a futures-based ETF is, what is the right level of liquidity? It’s never been tested before.”

 

He’s of course talking about the ProShares and Direxion ETFs which are to be decided on by August 23rd and September 21st, respectively.

 

Meanwhile the VanEck / SolidX ETF filing that the CBOE is planning to list emphasized that it will only invest in Bitcoin for the benefit of investors. Earlier this year the SEC voiced concern about insufficient insurance for cryptocurrency investors.

 

“An ETF is a multibillion-dollar ‘not-your-keys-not-your-Bitcoin’ vehicle, so that’s why I’m against it and I wouldn’t buy any,” Andreas Antonopoulos, one of Bitcoin’s chief experts, said.

But it is going to happen anyway… because there’s enormous market appetite and very little technical knowledge, so institutional investors simply can’t at the moment hold Bitcoin directly.”

 

We’ll see what the SEC has to say about the Futures-backed ETF next week, and if they would prefer a commodity-backed ETF like the VanEck / SolidX ETF.  It’s not much of a stretch to say that the ETF would raise the level of Bitcoin futures trading, but the SEC would be reluctant to approve the ETF if there is not sufficient liquidity in its underlying futures.

 

So unfortunately, it stands to reason that we might see back-to-back denials which will shake the already timid market. They are also very likely to delay the VanEck ETF once again on or before September 30th, which may add more selling pressure.

 

Today’s short squeeze has people laughably calling the reversal or bottom and declaring an impending bull run, but we need to see more that can fundamentally shake the market out of this miasma.

 

What is interesting is that there was an SEC approval today that will give people the ability to buy Bitcoin without actually owning the underlying asset, just like an ETF.

 

Starting Wednesday, investors can buy a Bitcoin exchange-traded note (ETN). The product, called Bitcoin Tracker One, is now quoted in U.S. dollars under the ticker CXBTF. It started trading on the Nasdaq Stockholm exchange in 2015.

 

“Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona,” said Ryan Radloff, CEO of CoinShares Holdings Ltd., the parent of the company that offers the ETN. “Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin.”


Trading Bitcoin Tracker One is now similar to buying an American depositary receipt — traders will see a foreign-listed asset in U.S. dollars.

Unlike exchange-traded funds, ETNs are debt instruments that are backed by their issuers — often a bank — rather than a pool of assets.

 

Bitcoin Tracker One gives investors an alternative to Grayscale’s Bitcoin Investment Trust, which also offers exposure to Bitcoin. Grayscale’s product trades at a premium to Bitcoin, whereas Track One does not and is liquid.

 

This is certainly not the miracle solution to Bitcoin and the crypto market’s problems, but it does show that cryptocurrency is becoming easier to trade and invest in. You will be able to own this ETN with a Fidelity account, for example.

 

So once again we find ourselves with a positive day and positive news, but without much to sustain it. This is what we’ve seen consistently over the past 8 months.

Market forces could certainly be coalescing at this point, but we need a reason for people to jump into crypto again.

 

As I’ve often remarked, it will be both internal and external forces that do this.

 

Internal in the sense that we are seeing progress made towards scalability and fungibility issues every day.

 

External in the sense that there are many red flags with the world economy and crypto is a compelling alternative to a bloated and debt-ridden system.

 

While the path forward is obscured, it cannot be denied that we are on the path to somewhere interesting. Can you feel it?

 

Technological progress and more efficient economical processes in tandem with global markets’ evolution and automation changing the workforce.  

 

This is the start of something big.

If you were not able to join us for the recent webinar “Ten Steps to Building Your Portfolio” webinar, the replay is available here.

We’ve started to produce episodes for The ReadySetCrypto Podcast; all of our episodes are posted on our blog (and on iTunes) and episode eight is now available. Episode Eight is an interview with Andrei Polgar, the author of the book “Age of Anomaly” which speaks to anticipating negative market events. Look for more episodes shortly as we comb the crypto space for valuable interviews, and create valuable content to keep you in the loop!

See you tomorrow!

Doc's Daily Commentary

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Offense – Adding Trades

Offensive Actions for the next trading day: 

  • None today.

Defense – Managing Risk

Defensive Actions for the next trading day: 

  • None.

RSC Managed Crypto Fund

[visualizer id="72847"]
How to read this portfolio: Please read through the FAQ tab

  • ETH/USD 2% added 8/10/2018 @ $363.14. (12% more to add)
  • LTC/USD 2% added 8/10/2018 @ $62.56.  (6% more to add)
What is the RSC Managed Cryptocurrency Fund?: We have one goal: To beat the market. To do this, we aim to balance risk vs. reward. Additionally, we aim to enter positions advantageously and in small increments, not all at once. As such, the pie chart you see above is representative of our “expected” portfolio, but will likely not match our “actual” portfolio. Why don’t you just buy into every position at once?: We aim to not only beat the market, but do so in a way that allows us greater leverage than simply buying in all at once. To do this, we will DCA into our positions to lower the average buy-in, and allow us greater yield from our initial capital seed. This also allows you the flexibility to follow our documented moves or immediately buy in when you want. We expect this will help you follow along easier as our moves are more deliberate. By setting targets for allocation, you know exactly how we intend to diversify our portfolio. Why are you only targeting large caps? Where is ____ coin?: We are targeting large market capitalization coins regardless of our belief in their viability as this enables us to diversify our risk and improve our chances of staying positive. We can hedge our bets by creating a fund that incorporates all of the major assets yet distinguishes between them based on the allocation. For example, we allocated more to Ethereum over its competitors as we feel it has more built-in longevity given its status as the default ICO platform. Of course, that can change, and as such we will be periodically rebalancing this fund as we redetermine viability and yield. Can I invest in this fund / can you manage my funds?: Not at this time. We are looking for ways to legally tokenize a fund such as this, but at this time no avenue exists for US citizens. Will we be adding small caps / ICOs?: It is likely we will be starting a separate fund dedicated solely to small caps / ICOs. We feel that the market simply isn’t showing favorable risk / reward signs for us to be trading them right now, but that will likely change soon. Why was the previous portfolio discontinued?: We felt it wasn’t correctly connecting with our customers as we started it in late 2017 and even during the 2018 bear market we were still very profitable. The same could not be said for customers who joined us during the bear market and tried to replicate our portfolio. Simply put: we wanted a portfolio that was easier to follow along with and less risky for our customers while still aiming for profitability.

Technical Analysis Research

This past weekend we introduced a new “fund” project that we’ll be creating over the next few months, in piecemeal form. I will be slowly and methodically creating a “fund” with (currently) 23 assets that we will do “live” or at least very plainly indicate where we intend to enter portions of assets.   As long as the market continues grinding down in a bear, we will use sentiment-based entries to hopefully secure a better entry.   In today’s video I discuss the current “trend” with Ethereum, and whether or not this is a true reversal. It may be, it probably isn’t, but either way there is no huge advantage to secure just yet by trying to pick the bottom.

Here are the recent swings that we’re tracking in the portfolio below; :

  • DGB/BTC – long @ .00000608 (7/23). My target exit is .000008BTC.
  • WTC/BTC – Long @ .00155980BTC (4/23). My target exit is at .002BTC.
  • ADA/BTC – Long @ .00003931BTC (5/1) My target exit is at .00005BTC.
  • ONT/BTC – long @ .0008905 (5/20) My target is .0013BTC.

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

I hope you all got a chance to catch my webinar class from earlier this year; if not, the replay is available here.  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 street price with your member’s “coupon code” of member18crypto..

We’ve started to do some swing trades on alts, tracked in the previous section. I am mostly focusing on the top 10-20 coins for now until we confirm that we’re back into an overall bull market.
I am doing the majority of my Technical Analysis work on TradingView, 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 and/or Delta 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.

Fundamental Currency Research

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:

Chromapolis

For flipping Good.

For long-term holding Neutral.

What is it? 

Database-centric decentralized application orientated platform with a different approach to token economy.

What is our verdict? 

What we like: A good iteration on DApp development with several built-in features that will make DApps faster and more feature-rich

What we don’t like: No alpha, Public GitHub Repo, MVP, or Whitepaper. Looks like it will be fairly centralized to start with hand-picked nodes.

  • Project name: Chromapolis
  • Token symbol: CHROMA
  • Website: https://chromaway.com/ (website of the parent company ChromaWay, website for Chromapolis coming soon)
  • White paper: TBA
  • Hard cap: $15 million (private sale contributors will own 15% of the total token supply)
  • Conversion rate: TBA
  • Maximum market cap at ICO on a fully diluted basis: $100 million
  • Bonus structure: TBA
  • Private sale / white list: TBA
  • ERC20 token: Yes (will be switched to native tokens when the mainnet is launched)
  • Countries excluded: TBA
  • Timeline: Unconfirmed whether the project will have a public crowdsale at the moment
  • Token distribution date: October 2018

Website: https://chromaway.com/

Whitepaper: TBA

2017- 2018Q2 Portfolio (Discontinued)

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.

Tier 4

ZIL

IAM

FT

DATA

ELEC

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

 

 

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