Premium Daily Crypto Newsletter

November 19, 2018

Crypto Market Commentary

Mav's Daily Commentary

FOLE

Fear Of Losing Everything

 

There’s no sugarcoating this one.

If you’re still in, you’re in this for good.

 

This is everything we’ve waited for but it’s also everything we’ve dreaded.

 

If it’s not immediately, obviously clear: the old crypto market is dead, but the new market is just beginning.

When I look around the comment sections in the crypto community, I see a dangerous amount of comments crafting a narrative of crypto that simply doesn’t exist. I see people looking for a the next Bitcoin or the next Ethereum.

They repeat to themselves that crypto is going to suddenly launch to the moon at the flip of a switch, They cling to confident shills in the comments and fall prey to pump and dump scams. They’re chasing the next meteoric rises and that we saw on a weekly basis in 2017.

They say: Why own X when Y could go up 2000% to reach its ATH? The problem with this line of thinking is that it is focused entirely on the past.

While it is true we can use historical data to help us predict future price movements, it is dangerous to assume that a coins past will always dictate its future.

Let’s be honest with ourselves here, 99% of ICOs were jumping on a trend and are never going to deliver on the dream that they sold. Most of these tokens will fade into the past with investors left to hold the bag. Many coins will likely never reach their ATH ever again. It is much more likely that we see a shift in value from these “shitcoins” as many would call them into solid projects that actually built their products.

Think of it another way, if the stock market listed every company in history that failed and went bankrupt, it would be really easy to see that only a small percentage of companies that ever existed would be profitable and the vast majority, regardless of how profitable they might have been, died. If you look scroll threw the endless pages of CoinMarketCap, do you really think that every single coin will exist in 10 years or even 2 years?

Staying fixated on the past instead of forging the path forward hurts you as an investor.

In the months and years heading forward, we’re going to a very VERY large consolidation into quality coins in the crypto space. Much like the dot com bubbles, your job as an investor is to look for the winning coins and services that will last. You’re looking for the Amazon’s and the Google’s, not Pets.com… and more importantly, financial business models are going to grow and change over time.

It’s easy to fall for groupthink of LAMBO-sized gains but the reality of the situation is that if you can cut through the noise on social media and look for your own signals, you are going to come out better for it.

You need to remove yourself from echo chambers that preach the Golden Bull Run prophecy that will lead us to new ATHs.

It is much much more likely that we could see an extended bear market that ends in consolidation of value and users behind quality products and services that deliver.

The beauty of the current climate of the crypto markets and development is that the history is still being written and your actions shape that future. There are plenty of creative ways you can make a profit on your holdings in this bear market by taking advantage of the actively growing open financial tools out there.

Savvy crypto investors have known for months that the ICO is dead and that STOs are the new metamorphosis of this format of investment. However, STOs aren’t the only opportunity cropping up in late 2018. Existing tokens and Dapps are starting to maturing by the day and the community keeps coming up with new methods for users to benefit from these innovations.

Dapps are becoming more and more accessible. Many of these Dapps require liquidity to function and will pay you interest on your tokens to provide it. For example, lending protocols like Compound will give you interest for certain ERC tokens. Uniswap, Kyber, and ZRX relayers  all will both require pools of liquid tokens to fulfill demand in the future.

Staking pools for cryptocurrencies and governance tokens will become important services for those looking to make interest on their holdings.

This technology is brand new and it is important to realize that the methods for investors to make money in the future aren’t going to be the same as they are today. Crypto is going to continue to evolve and you as an investor need to evolve with it or get left behind holding the bag.

I’d like to stress that the legality and tax responsibility for some of these methods are still in a very grey area. Make sure to do your own research before diving head first into anything.

The important takeaway from this video is that thinking outside the box can be very lucrative and it is your job as a responsible investor to explore new revenue streams to diversify your crypto portfolio in this defining moment in crypto history. You can choose to look at this market and feel scared that the fantasies you formed in 2017 won’t come true or you can look to the future.

You can see this market as gut-wrenching and terrifying because it doesn’t meet historical expectations or you can look at the adoption occuring on a daily basis and realize right now is an amazing opportunity to build something the world has never seen before.

 

 

 

Doc is giving a free class on Trend Trading this Tuesday night; please visit this link to sign up for the live webinar!

 

We’ve started to produce episodes for The ReadySetCrypto Podcast; all of our episodes are posted on our blog (and on iTunes) and Episode Fourteen is now available. Episode Fourteen is entitled “Atomic Habits and the Four Maxims of Trading.”  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 Premium-Only Livestream

Our next ReadySetLive session will be this Wednesday evening at 2000ET/0000UTC; Doc will be doing a live class on Trend Trading on YouTube live. Watch for the link below and set a reminder for yourself! Doc’s latest “Trade School” video is also listed below; we announce those with links in the Premium Chat room of the Discord page.

Our Public Livestream

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 for tomorrow.  

Defense – Managing Risk

Defensive Actions for the next trading day: 

  • None.

RSC Managed Crypto Fund

[visualizer id="76496"]

How to read this portfolio: Please read through the FAQ tab

  • ETH/USD 2% added 8/10/2018 @ $363.14
  • ETH/USD 2% added 9/9/2018 @ $200.50 (10% more to add)
  • LTC/USD 2% added 8/10/2018 @ $62.56.  (5% more to add)
  • XMR/BTC 2% added 9/21/2018 @ .018BTC
  • BTC/USD 2% added 11/7/2018 @ $6501
  • XLM/BTC 2% added 11/19/2018 @.00004389BTC
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.

Click on image to download the datasheet

RSC Altcoin-Exclusive Crypto Fund

[visualizer id="78512"]
What is this? The RSC Altcoin Fund is meant to replace our V1 portfolio. This portfolio, referred to as Portfolio V3, will represent a portfolio that is built upon more risky assets (assets outside the top 20), and is inherently more risky than Portfolio V2, the RSC Managed Crypto Fund (above). We will NOT be actively entering positions for this fund, but we will be updating the portfolio percentages and contents periodically.

Click on image to download the datasheet

 

Click on the image to download the TXT file

 

Technical Analysis Research

I wrote yesterday, “I think that most of the large-cap coins are showing a bearish pennant on the 4 hour chart, with perhaps more downside to come. This is not my “feeling” but rather a chart pattern read with a specific probability associated with it.”

Today was “part II” of the downside distribution and the supposed “support” level that everyone in the world saw at BTC $5k has failed. When everyone sees the same thing, they are apt to be wrong.  

 

 

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.
  • ETP/BTC – long @ .000522BTC (9/21) My target is .00072BTC

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

We’ll focus in-depth on a coin you should consider, and talk about the fundamentals of what makes it interesting. This is not a “ this is the next big crypto” article or “reasons why you should buy”. We’re simply laying it down with hype, speculation, and other nonsense.

 

Today’s RSC Coin Spotlight is the 0x Protocol (ZRX):

No doubt you’ve heard about ZRX in the past several weeks since its listing on Coinbase on October 11, 2018. But you may be asking yourself: What is ZRX? And What gives it value?

 

ZRX is the governance token of the 0x Protocol, a standard for trustlessly trading ERC20 and ERC721 tokens. 0x Protocol allows users to trade tokens right from their wallets in either OTC trades or through a decentralized exchange otherwise known as a relayer.

 

0x protocol uses an approach they refer to as off-chain order relay with on-chain settlement. In this approach, cryptographically signed orders are broadcast off of the blockchain through any arbitrary communication channel an interested counterparty may fill the order by submitting one or more of these signed orders into 0x protocol’s Exchange contract to execute and settle trades directly to the blockchain.

 

The project ICO’d in August 2017 for $24,000,000. On August 2, 2017, iFinex Inc. (BVI), the company that owns Bitfinex, announced it would launch Ethfinex, an Ethereum-based trading and discussion platform that would utilize the 0x Protocol. Several other prominent relayers rose in the 0x ecosystem such as DDEX, Radar Relay, and Paradex.

On May 23rd, Coinbase announced it had acquired Paradex, a decentralized exchange that uses 0x. At the time of the Paradex acquisition, Cointelegraph reported,  

 

“Coinbase will integrate the Paradex relay platform into Coinbase Pro which, according their blog post, will let customers trade ‘hundreds of tokens directly from their wallets.’ This would markedly expand the types of cryptocurrencies to which customers will have access through Coinbase. The blog post states that the new service will be made available to customers outside the US before eventually being offered to American clients.”

 

This acquisition led many in the crypto community to speculate that Coinbase would list ZRX and sure enough it was listed on Coinbase on October 11, 2018. The ZRX community eagerly awaits Coinbase Pro “Trustless” which could see the listing of many ERC20 tokens.  Coinbase’s recent announcement of USDC, an ERC20 backed by USD, may be used in trading pairs on Coinbase’s new trustless service.
https://cointelegraph.com/news/coinbase-announces-launch-of-coinbase-pro-paradex-acquisition

https://blog.0xproject.com/18-ideas-for-0x-relayers-in-2018-80a1498b955f

 

0x protocol relayers have a lot of flexibility on how they collect and relay the orders they interact with. Relayers can choose whether to have open or closed liquidity pools. Relayers can be private or open.

 

They can even be dark relayers which allows big players to transact outside of the eyes of the public by obfuscating their orderbooks and provide just-in-time quotes for crypto assets to emulate the experience of using a dark liquidity pool.

 

But 0x goes far beyond decentralized exchanges. The liquidity pools that relayers create can be beneficial to any number of projects in the Ethereum ecosystem. 0x allows developers a flexible approach to offering their users liquidity for their tokens.

 

Any DApp looking to accept multiple tokens as payment methods could tap into 0x’s orderbooks for the liquidity to convert the payment into the token of their choice.

 

For example, Since 0x can handle ERC721 tokens, two players of the ERC721-based card game Gods Unchained can trade cards with one another. Gods Unchained is going to utilize 0x to create an in-app exchange where players can trustlessly trade ERC721 cards with one another.  https://godsunchained.com/

 

Developers see the value in a protocol like 0x and several major projects in the Ethereum ecosystem are integrating the 0x protocol as a vital function of their code.

 

District0x (DNT) is one of these projects. According to their website, District0x is a network of decentralized markets and communities known as districts that solves a number of coordination issues and inefficiencies commonly found within distributed community marketplaces.

 

This is accomplished by providing tools that can better align incentives and decision making among the market participants themselves.

 

The end goal is to create a self sustaining ecosystem that can flourish without the need for a central authority. Districts exist on top of a modular framework of Ethereum smart contracts and frontend libraries referred to as d0xINFRA.
https://district0x.io/

 

District0x embedded their 0xprotocol into their districts on the district0x Network, giving users the ability to pay and receive payment in the ERC20 or ERC721 token of their choice.

 

Simlar to the ZRX token, DNT is used to govern District0x. As their FAQ puts it:

“The district0x token holders themselves decide whether a district is good or bad for the network through the District Registry, an incentivized voting game that dictates access to the network. Whether a district is good or bad not only applies in terms of the quality of the marketplace, but also prevents against districts that are deemed immoral or threatening to the entire network by DNT holders. This will be entirely up to the DNT token holders to decide.”
https://district0x.io/faq/

 

Like many people you may be asking yourself: “Where is the value in governing these protocols? Where is my money?” These are valid questions that honestly no one has the answer to yet. Like many aspects of crypto, these investments are speculatory.

 

One concern many have raised in the ZRX community is: What stops someone from forking the 0xprotocol in the case of a dispute? While it is true that a relayer who wanted to could fork away from the rest of the 0xprotocol but they would also suffer the consequences of disconnecting from everyone else in that pool of liquidity.

 

Similar arguments have been made for open-source software in the past and it usually boils down to the same concept that gives these open-source projects value: network effect. It’s hard to copy and paste Ethereum because it is the Ethereum network that has value not strictly the technology.

 

0xprotocol can be viewed in a similar light. Yes, you could fork the protocol but the value in ZRX is the network of users and application built on top of the protocol itself. District0x and relayers are a prime example of this. Any project that tried to duplicate ZRX would need to attract all of the protocol network’s users as well.

 

As the cryptocurrency space keeps evolving, we’re going to see users and developers take the path of least resistance. Why make my own operating system when I can use one someone else wrote? Why make my own network protocol for computers when I can use TCP/IP to connect to the internet?

 

Why make my own cryptocurrency network when I can build on Ethereum or Stellar? This line thinking logically progresses into: Why make my own liquidity when I can tap into a network like ZRX? Why make my own marketplace when I can use District0x?

 

This interweaving of utility protocols is going to create a strong fabric for ecommerce in the age of Web 3.0. Just like ZRX, District0x benefits from developers building off of their framework. These developers must place a refundable deposit of DNT to become a district creating a symbiotic relationship.

District0x provides a standard framework for any marketplace system with a reputation like Ebay or even Amazon.


One example of the districts on the District0x network is the RedLightDistrict created in partnership with Spankchain. They sell, as you might have guessed, adult content from performers on Spankchain’s network. District0x’s framework provides the RedLightDistrict with the ability to have buyer and seller reputations, an issue interface for performers to sell digital content, and seamless payments via the ZRX protocol.

https://github.com/district0x/district-proposals/issues/197

 

The decentralized finance ecosystem grows with each new strand woven into its fabric; We are seeing more and more Dapps in the Ethereum space being built on top of or interwoven with other Dapps or protocols.  District0x is just one of the threads interwoven with ZRX.

 

dYdX protocol is building another important product that integrates with ZRX relayers. dYdX is a protocol for short selling and derivatives built on the Ethereum blockchain. dYdX provides decentralized peer-to-peer shorting, lending, and options trading of any Ethereum based token. dYdX allows decentralized exchanges to offer sophisicated financial tools similar to centralized exchanges but in a completely trustless way. https://medium.com/dydxderivatives/introducing-dydx-2d0f0f326fd

 

Dharma protocol is another great example. Dharma is a protocol for issuing, underwriting, and administering debt agreements as tradeable cryptographic tokens built on top of, you guessed it, the 0x protocol. https://dharma.io/

 

Overall, 0x is certainly a project doing big things, and will certainly be one of the more successful projects you should keep your eye on heading into next year.

 

More resources on 0x:

 

https://blog.0xproject.com/0x-is-laying-the-foundation-for-the-token-economy-eb2cc3b070d0


https://www.0xproject.com/wiki#List-of-Projects-Using-0x-Protocol


https://0xtracker.com/

https://medium.com/@FEhrsam/why-decentralized-exchange-protocols-matter-58fb5e08b320

 

https://www.cnbc.com/2018/01/22/tencent-wechat-mini-program-push-takes-aim-at-apple-and-google.html

 

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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