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August 21, 2018

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Crypto Market Commentary

Mav's Daily Commentary

Market Holds Breath As Neither Bulls Nor Bears Make Progress

Are We Gearing Up For Thursday’s ETF Decision?

 

While we saw a largely technical move to the downside in the late hours of Monday, the market was able to recover throughout Tuesday to leave us, once again, nearly neutral for the trading day.

Bitcoin is once again one of the best performers on the field, only being beat by Litecoin in the top 10.

Meanwhile this week South Korea is looking to potentially reverse the country’s ban on ICOs. What’s interesting is that they’re also looking to create South Korea’s own ‘Blockchain island’ that would compete with the blockchain-friendly trajectory adopted by Malta.

Meanwhile, new research suggests that the volume of the global automotive blockchain market will reach $1.6 billion by 2026, based on a financial analysis of market movers including Ethereum (ETH), Ripple Labs Inc., IBM, and R3.

 

Taking a broader view of the market, overall trading volume has declined by about 25% since last week. This trend is also observable in Bitcoin futures, where volume has declined for three consecutive days and is down approximately 69% since last week.

What’s likely going on this week is that market is awaiting the U.S. Securities and Exchange Commission’s (SEC) impending rulings on two Bitcoin ETF proposals.

 

Most market experts are unanimous in their opinion that the Bitcoin ETF will not be confirmed until at least 2019. The ProShares ETF to be decided on this week is a Bitcoin Futures ETF, but what exactly does that mean?

 

A futures-backed ETF differs from a physical (or commodity) backed ETF that is also under review in the form of the VanEck / SolidX ETF. What’s interesting for us is unpacking the differences and realistically looking at which stands a better chance of being approved by the SEC.

 

As a refresher, ETFs trade like stocks, but you do not actually own the underlying shares of the asset when you purchase a share of an ETF.

Instead, you own a share of the fund. In the case of a physical-backed ETF, you can effectively participate in the crypto market without having to own any coins. This saves you from the need to manage keys and the risks of being hacked.

 

Futures-backed ETFs, in comparison, go one step further by basing the value of the ETF shares on Bitcoin Futures contracts rather than the price of Bitcoin itself.

 

Futures contracts are based on a fixed price and date of expiry, making them more speculative.

 

What’s beneficial about the Futures-backed ETF is that it allows investors to make profit even when the market is down, and there is no need to worry about the underlying assets being hacked.

 

As it stands, there are 10 Futures-backed Bitcoin ETF applications currently under review in comparison to just 1 Physically-backed Bitcoin ETF.

 

Daniel Masters, executive chairman for CoinShares, explained:

“Until such time major institutions put their name to cryptocurrency custody, I don’t believe a physical ETF can exist in the U.S…I think any futures backed ETF in the United States now has a far better chance of being approved.”

 

This being said, the markets clearly prefer the Physical-backed Bitcoin ETF, as  Eric Balchunas, senior ETF analyst for Bloomberg Intelligence, points out:

 

“Where the investors have a choice of buying the ETF that hold the futures versus the ones that physically holds it…95% of the people go to the physical one, the only time they hold the one that holds futures are if they have to.”

“I take the one that actually holds the bitcoin will be more successful and you don’t have to deal with rolling futures. There could be some costs associated with that people don’t like,” he added.

 

One key advantage of the ProShares Bitcoin ETFs over the recently-rejected Winklevoss Bitcoin ETF is that it uses the well-respected SEC-regulated CME and CBOE futures exchanges rather than the unregulated and relatively new Gemini digit asset exchange.

 

However, in view of the fact that Bitcoin is experiencing a bear market and concerns expressed by the Commissioners just last month regarding price manipulation in Bitcoin markets, it seems unlikely that the ProShares Bitcoin ETFs will get approved.

 

Even if they do somehow get approved, since neither of these ETFs would buy/sell/hold any Bitcoin, the effects of such approval on the Bitcoin price would probably be fairly limited.

This is why so many crypto traders/investors are so obsessed with what happens with the Physical-backed VanEck-SolidX Bitcoin ETF.

 

Although approval of the ProShares Bitcoin ETFs does not dramatically increase the chance of eventual success for the VanEck-SolidX Bitcoin ETF, it could indicate a less negative stance shown so far by the SEC, and is likely to be seen as good news by the markets.

 

One thing is for sure, it could be a very interesting next couple days in the markets.

 

Meanwhile today, members of the U.S. Senate Committee on Energy and Natural Resources inquired about the cost of crypto mining and the opportunities for blockchain in the public sector.

 

In opening remarks, committee chair Senator Lisa Murkowski of Alaska noted:

 

“The hearing will examine any cybersecurity advantages that blockchain and similar technologies might offer over other ways of securing our energy infrastructure.”

 

“Can we anticipate the consumer rates and the concern that some might have that, ‘my family and I might not be the ones that benefit from blockchain and bitcoin and yet I’m wondering are my rates going to be expected to pay for this infrastructure?'”

 

The conversation during the hearing often turned away from perceived problems and towards blockchain’s application in the energy sector, including tracking shipments, validating security protocols, or building upon existing technologies.

 

One interesting conversation was looking at alternatives to PoW, noting that while they require large amounts of power, and that proof-of-stake and proof-of-authority algorithms are far more energy efficient. These can pose as feasible alternatives to scaling a blockchain without requiring large amounts of power.

 

Like previous hearings, no firm conclusions were reached, but Chairwoman Murkowski noted that the hearing was educational for the committee’s members – perhaps setting the stage for more queries to come.

 

Overall today’s news was largely positive and while we anticipate some bearish action towards the end of the week, it will hopefully be temporary.

Mark your calendars for this Thursday evening! We’re going to hold a special one-hour session on “Top Ten Ways to Create Passive Income With Crypto.” This session will be held Thursday at 8pm EDT (New York) and of course, we will provide a link to a replay session if you cannot attend. Sign up here to get the live session where we answer your questions!

We’ve started to produce episodes for The ReadySetCrypto Podcast; all of our episodes are posted on our blog (and on iTunes) and Episode Ten is now available. Episode Ten speaks to this whole notion of “Buy The Dip” and whether or not that is sage advice for today’s market. 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.

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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.  All that I saw were bear flags tonight; we are close to some good entries on coins showing positive divergence on the RSI. 

Going forward into the end of this year my plan is to do a LOT more swing trading; what would really help is a decent derivatives exchange. I am looking for big things from Digitex in this regard, which will be a commission-free futures platform however all trades must be made in DGTX as the base currency. Put yourself on the waitlist for this platform by clicking here. I have started to acquire DGTX tokens at Mercatox in anticipation of them turning up their platform, and this looks to be a good candidate for a pump prior to the production event.

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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