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Altcoins – There’s Blood in the Streets

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Wow, altcoins have been getting beat down recently. Why? you ask. Good question. Well there are a few reasons why. I first want to talk about why I believe altcoins are taking a beating, then I will talk about what you can do to capitalize on the situation.

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One of the richest investors in the world, Warren Buffett, said to “Be fearful when others are greedy and greedy when others are fearful”. Even though he speaks out against bitcoin, his words ring true in this situation. A lot of people are flocking to bitcoin right now as it is rising at an amazing pace. Investors think that they can ride the train up while it is moving fast, and that is true. However, I would venture to say it is possible to make a lot more by investing in Altcoins right now.

I want to explain the current bitcoin landscape because altcoins are directly tied to bitcoin. Here is a quick explanation of why I think altcoins are tanking. First off, the obvious reason is that we have just recently had a couple of the most significant forks bitcoin has ever experienced. When bitcoin forks, a new coin is created giving those that hold bitcoin free tokens. First it was Bitcoin Cash, then Bitcoin Gold and now Segwit2x. A lot of people with large amounts of cash in cryptocurrency moved a large portion to bitcoin in order to get all these free coins. There are 3 main ways to capitalize on the bitcoin hardforks:

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  • 1. Move all your cash from altcoins into bitcoin in order to receive the maximum free new forked tokens…. Jump for joy!
  • 2. Move a lot of cash from altcoins into bitcoin, wait for the price to rise and then move it all out right before the fork before bitcoin makes a correction… Dance in the Street!
  • 3. While a ton of people are consolidating most of their coins and cash into bitcoin some are viewing this as a golden opportunity to buy up undervalued altcoins…. Ding, ding, ding… we have a winner. This is what I have chosen to do. Why? Because I can buy up tons of undervalued altcoins that will easily outperform bitcoin in the short term. Then, after the fork and money starts to flow back into altcoins, I will wait for altcoins to explode up to a certain amount then move a good portion into bitcoin when it has dropped post fork… Bam, do the moonwalk!

Buying bitcoin at this moment is following the crowd to the all-time high. When bitcoin corrects, some will lose what they have gained in bitcoin for the short term and will have missed out on the altcoin low prices just to get a few free coins that will surely drop in price.

Having said all that, let’s dive into a couple of amazing undervalued altcoins. From a general perspective, coins that are Protocols, Platforms and Privacy Coins are great long-term bets. Why? Well, in a former life I developed websites (for 17 years) and the internet was built on top of protocols and platforms. Privacy coins will always be in demand as there are many that like the fact they can have lots of money and others not necessarily know. While this could be used for illicit purposes it also is a desire for many that just want privacy.

Two amazing coins

0x (ZRX) – 0x is just getting started. 0x is a Protocol that other apps are built on top of. Just as in the early days for the dot com boom, protocols will be the foundation of the blockchain app future. Early coins that are backed by a protocol will be around for the long-term and will definitely see lots of growth when new, exciting apps announce they are building on top of the protocol. For example, here are a few projects currently building on top of 0x:

0x is a great coin for swing trading and will eventually see a parabolic rise as more and more apps are built on top of it.

Groestlcoin (GRS) – this coin has had some tremendous growth lately and for good reason. It was the first to activate SEGWIT (Segregated Witness) in 2017 basically increasing the block size limit by removing the script and signature from the transaction block send in a transaction. This will help scalability which was a major issue for bitcoin. Another key feature of this coin is that it allows users to mine the coin (get free coins by running a script on your computer) with less computer power. Users can run mining software on their normal desktop or laptop and get free coins. In comparison, bitcoin is almost if not impossible to mine from a regular computer profitably. Long story short, this will bring a lot of users into this coin just to mine it which will stabilize the coin and make it a more desired coin. Many will want to keep this coin around to mine it and make a profit from that. Groestlcoin currently has a marketcap of approximately $39,997,745 which puts this in the top 100 coins. There are many crap coins in the top 50 – 100 coins so this coin can easily beat some of those out and grow. While I think this coin is a little overbought at the moment I still believe it has a bright future.

We that’s all for now. Please check back often for more altcoin insights from CryptoDayTrader.

Featured image courtesy of Shutterstock. 

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Altcoins

Trading recommendation: Lisk/Bitcoin

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The best way to trade a range-bound market is to buy at the lower end of the range and sell at the upper end. If the range is large and well established, it offers us a good risk to reward objective. We believe that LSK/BTC fits the bill and offers us an attractive opportunity to buy at the support and sell at the resistance.

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Key points

  1. LSK/BTC has formed a large trading range.
  2. Buy at the lower end of the range.
  3. Sell at the upper end of the range.

Weekly chart

LSK/BTC has been trading in a large range of $0.00046 on the lower end and $0.0016 on the upper end. On three occasions, the cryptocurrency pair has bounced off the supports. Similarly, it has returned from the $0.0016 levels thrice. The range is well defined. Currently, price is trying to rebound after breaking below the lower end of the range last week. We believe that a buy at current levels offers us a low-risk and high-reward trading opportunity.

Daily chart

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On December 07, the cryptocurrency pair broke below the support of $0.00046. However, the very next day, it climbed back into the range, which is a positive indication. This shows that the bulls want to keep the range intact. However, the rally from the lows hit a roadblock at the 20-day EMA.

Currently, LSK/BTC is again pulling back towards the lower end of the range. If the support holds, we believe that the digital currency will again rally to the upper end of the range. Therefore, we suggest buying 50% of the desired allocation close to $0.00050 levels. Remaining 50% of the position should be purchased once the digital currency breaks out of $0.00068. The profit objective is a rally to the upper end of the range at $0.0016. The trade should be closed if the virtual currency breaks down and sustains below the lower end of the range. This is a long-term trade.

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Altcoins

Trade Recommendation: XMR/BTC Pair Throwback

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The XMR/BTC market (Monero) has been in downtrend on the hourly chart after posting a high of 0.0225 on December 6 and failing to hold critical support at 0.02. It went to as low as 0.0145 on December 8 before respecting RSI at 32 where it established support. The market used the new support level to rally and generate one higher low after the other. It recently attempted to reclaim support at 0.02 but was repelled by bears. Currently, the market is trading around 0.019 levels where it appears to have created another higher low.

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Technical analysis shows a large reversal pattern in the hourly chart that can take the XMR/BTC pair to 0.025. Even though the market failed to breach resistance at 0.02, investors should not see it as a failed breakout. What we’re seeing is a throwback which is a temporary retreat in price. Throwbacks are common in breakout plays and are often seen as a bullish signal. The next time the market attempts to breach 0.02 resistance, it has a much better chance of breaking it with conviction.

The strategy is to buy breakout at 0.02 with immediate stop at 0.0189.

Hourly XMR/BTC Chart on Poloniex

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As of this writing, XMR/BTC is trading at 0.018714 on Poloniex.

Summary of Strategy

Buy: breakout at 0.02

Target: 0.025

Stop: move below 0.0189 after buying breakout at 0.02.

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Altcoins

Trade Recommendation: FCT/BTC Bullish Reversal

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The market reach its all-time high back in June this year when FTC/BTC (Factom) reached 0.01463162. Unfortunately, the pair wasn’t able to sustain its momentum. It created a lower high several days later at 0.01066744 which signalled investors to take profits or cut their losses. As a result, the market tumbled and lost 93.17% in value from its all-time high. Such a tremendous loss would have created an atmosphere of despair in the market. Usually, that’s when the savviest traders come in.

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Technical analysis reveals that the worst is behind the pair. FCT/BTC touched support at 0.001 on the daily chart twice and respected it on both occasions. This is a good indication that the market has found a reliable support level. In addition, hourly chart shows that a large reversal pattern is underway. The pair may have retreated when it nearly touched 0.002, but it generated a new higher low in the process at 0.00156566. The throwback is a bullish signal that enables the pair to gather momentum to break resistance at 0.002.

The strategy is buy on breakout at 0.002. Breach that level and the market reclaims 0.003. Sell that level because it is a strong resistance.

Hourly FCT/BTC Chart on Poloniex

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As of this writing, FCT/BTC is trading at 0.001738 on Poloniex.

Summary of Strategy

Buy: breakout at 0.002

Target: 0.003

Stop: move below 0.0018 after buying breakout at 0.002.  

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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