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August 19, 2018

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Crypto Market Commentary

Mav's Daily Commentary

 

Week In Review

Markets Go Sideways

 

The market bounced all over this week as it entered a period of uncertainty; a dangerous intersection of competing interests with unclear motives.

Surprisingly, the market ended the week barely positive despite several major drops and rebounds.  

 

The big story here was the fall of Ethereum, which is down 7% on the weekly chart but took more than just blows to the price. As reports came out that millions have been scammed from investors using ICOs based on the Ethereum platform and how Ethereum is the most popular crypto among phishers stealing cryptocurrency from unsuspecting users, investors expressed their distrust in the platform and caused it to lose 2% of its market dominance in one day.

 

Ethereum has been losing market dominance since its recent peak at 18% in May as the market moves from altcoins into Bitcoin, but this was the most dramatic display of a shifting tide yet.

 

Interestingly, most of the other major platforms also languished during this time period as well as the market showed contempt towards platforms and their apparent inability to prevent major cases of fraud from occurring.

 

It raises the fundamental issues that decentralization is at odds against — how do you promote a decentralized system without running into issues with manipulation, bad actors, and scams? Truly, as the middlemen of the world will argue, it is necessary to have centralized systems because decentralized systems are too close to anarchy and too susceptible to those who inherently seek to misuse the system.

 

It’s worth noting that centralized systems are also highly manipulated and clearly run by bad actors — wealth inequality is at all time highs, debt is at all time highs, and inflation is the norm. The same bad practices that led to the 2008 financial crisis are in play today. Everything is a bubble. So, it’s disingenuous to look at an immature system and critique it by unrealistic standards.

 

Any platform, no matter how good the vetting is, will still have scams and phishers. Any protocol, no matter how strong the consensus, even if it’s 99% as Vitalik wrote about this week, could still be susceptible to attack or manipulation.

 

The point here is that these are ephemeral problems.

 

Simply because Ethereum is having issues does not mean that suddenly EOS or NEO or Ethereum Classic is the most viable smart contract and DApp platform in existence. No, this is a collective effort, and we share both the positive and negative consequences of daring to step on the moon, to map uncharted territory, and to invent the uninvented.

 

Simply put, this space is too small and too new to see issues like these as anything other than heuristics. Technological innovation requires seeing things break, having bad actors test your weak spots, and working to improve and adapt so that moving forward your old issues are solved and replaced with new issues.

 

For example, 100 years later and we’re still perfecting the car. People die in car accidents every day, does that mean we should all abandon cars immediately? No, it’s more feasible for us to use the existing infrastructure and the existing platform and improve both. Make roads safer, make cars safer, and eventually we’ll reduce the number of fatalities to the point where deaths on the road are a genuine surprise, not a mundane statistic.

 

Do you see how this same line of logic can be applied to where we are with blockchain platforms? Yes, there are issues, but we can improve and adapt. This space is hyperdynamic and it changes every day, as you’ve probably noticed.

 

So, while things look bleak right now and people are crying from the rooftops that Ethereum is going to sub-$250, understand that the larger mission and purpose hasn’t changed.

 

Meanwhile, we expect this week to have some interesting implications.

 

For one, the US Congress is discussing Blockchain’s energy usage. It will be interesting to see how that conversation is driven, and what narrative will be the pervasive rhetoric. Certainly, those who are against this initiative will decry the “wastefulness” of Blockchain and point to the current energy usage of Bitcoin as an example.

 

But again, we have to champion the point that this is the price of innovation and building something new — it does not fit conventional norms and thus it is “bad”. Energy usage is simply a temporary problem as well, and one that the community has already put time and effort into solving and adapting around. Hopefully this is the impression that is left upon the Representatives who listen to this hearing.

 

The second major event this week is the deadline for the ProShares ETF decision by the SEC. The SEC has until Thursday to deliver their verdict on the ETF application, as they can no longer delay it.

 

This decision has implications for the space as a whole, and especially for the VanEck/SolidX ETF decision which was delayed until September 30th.

 

As the ProShares ETF is Futures backed, it is possible the SEC will decide that their isn’t the market in place to support it, similar to the WinkleVoss ETF denial. If this is their rationale, it would strengthen the case for VanEck ETF as that is commodity backed.

 

Still, the market is heavily susceptible to manipulation and the market infrastructure is as immature as the technology it is trading, so the SEC may very well deny both applications.

 

Whatever the case, expect some market volatility this week around that decision, whether negative or especially positive.

 

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 nine is now available. Episode Nine looks at the five most common cognitive biases that affect investors year in and year out, regardless of what market they trade.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

Our Weekly Livestream

Our next Premium-Only Livestream is scheduled for 22 August 2018 at 8 PM EDT (UTC/GMT -4 hours). Watch below for new link.

New to Cryptocurrencies? Check out our archived classes “Intro to Cryptocurrency Trading”, “How to Find Your Next Big Cryptocurrency: Intro to Fundamental Analysis,” Mav’s  class on “Security and Wallets” and Doc’s classes, “Introduction to Technical Analysis” and “Short Term Trading Strategies” which are now all available for immediate purchase in our Store, and seconds away from viewing in the Premium Member’s Home. View more about them at our online store by CLICKING HERE.

 

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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

In August 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.   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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