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Cryptocurrencies

The Jon Snow of Crypto

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In about eight hours from the time of this writing the moon will pass in front of the sun and cover it completely in a total solar eclipse.

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The eclipse will be visible across the United States of America starting in the Washington State and making it’s way towards Florida.

My family and I are lucky enough to be scheduled for a flight from Vancouver Canada to Los Angeles that, if my calculations are correct, should take us right through the path of totality.

Will try to snap some photos for you.

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@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs below are valid as of August 21st. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

The White House shake up continues as Donald Trump’s top advisor Steve Bannon has left the scene. For those of you who are unfamiliar. Steve Bannon was the editor of an online tabloid that reeks of conspiracy theories and racism.

Bannon has been instrumental in helping Trump win the Presidency but on Friday it was revealed that he will be going back to his old job.

This was seen as a positive thing by the markets, which ended higher on Friday but not positive enough to bring them to weekly gains.

This morning, markets are brooding over the departure of the infamous investor Carl Ichan from Trump’s billionaire dream team of advisers.

At this point, headlines about who is and who is not at Donald Trump’s side are having a direct impact on the financial markets.

This week in Markets

As far as the economic calendar is concerned, the week should start off fairly uneventful but by the end there is a chance to pick up some real momentum.

On Thursday, Friday, and Saturday we should be getting news from the Jackson Hole Symposium. This annual event will be attended by many politicians and bankers including Janet Yellen and Mario Draghi.

Long term investors should pay close attention to these meetings as we are at somewhat of a crossroads in the world of monetary policy.

On the one hand we’ve seen a big push from many central banks to tighten up the money, to raise rates, and reduce the quantitative easing measures.

On the other hand, some countries may not be ready just quite yet to let go of these tools and doing so could potentially have dire consequences.

Game of Crypto

The world of crypto has been extremely eventful since Friday and the powers that be are nipping at each others heels.

The old king Bitcoin remains on the Iron Throne for the time being but his dominance has decreased significantly in the past few days. Just a week ago BTC controled almost 52% of the crypto market. Today it is down to 46%.

From the north, the bastard bitcoin cash that nobody seemed to have much hope for just last Thursday has been gaining ground in an astonishing way.

A strong victory on Friday led to further gains in price until it was discovered that miners of bitcoin cash would be receiving greater rewards than those who mine for the old bitcoin. The first house has defected just this morning as mining pool btc.com, who currently controls about 13% of the total bitcoin mining ability, has begun to support Bitcoin Cash.

Meanwhile in the South, Ethereum has been growing in usefulness. The number of transactions on the network have consistently been reaching record breaking levels and the volumes seem to be increasing as well. Just this morning the price has bumped above $300 per coin and the momentum has carried it to it’s highest level since June.

Keep your eyes open. The games are afoot.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.
The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

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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2 Comments

2 Comments

  1. jeffc89

    August 21, 2017 at 3:12 pm

    Great post Mati, love the GOT references lol

  2. Chris G

    August 21, 2017 at 3:33 pm

    love it mati … go ethereum 😉

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Altcoins

AirToken (AIR) – Extremely Undervalued Long-Term Investment

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I have the opportunity to research many altcoins on a daily basis. While reading through altcoin websites and whitepapers, it sometimes gets overwhelming. The reason is that a lot of altcoins are doing amazing things with their technology, but it is hard to understand what exactly they are trying to accomplish and how the token integrates with their product.

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AirToken has been a breath of fresh air. I am always looking for companies that are solving a real need and utilizing their token in a way that is integral to the ecosystem of the company, and not just an afterthought to raise money.

AirToken, which was founded by a former Google employee, provides mobile access to the underserved. It is based on the assumption that the cost of mobile data and internet access is too high for some to afford. So, how does it work?

Users earn free AirTokens by using the AirFox browser. AirTokens are earned and redeemed for data on pre-paid plans. Reaching those that are currently using pre-paid plans will lower their cost with redeemable tokens. A user simply watches advertisements from the free Android app as well as the AirFox browser. The user earns free AIR tokens and will be eligible for micro-loans based on the proprietary AirToken scoring system.

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Let’s look at the current state of AirToken:

Following the AirToken ICO, you can see that it had a couple of spikes but has since leveled out. The current price of AirToken will change very quickly after a couple of things happen. First, AirToken will need to get listed on a major exchange, and this will immediately increase liquidity and volume. From what I understand, this is supposed to happen as soon as next month. Second, AirToken releases Phase 2, which allows users to recharge their pre-paid mobile cards as well as obtain physical goods by redeeming AirTokens (AIR). Hitting this milestone in the first quarter of 2018 will accelerate growth by attracting more companies to participate in the AirToken advertising and micro-loan program.

Companies like AirToken that are solving real-world problems are pioneers in the blockchain and cryptocurrency space. A lot of the altcoins will come and go. Some will never deliver a product, while others will just take the ICO cash and run. I believe AirToken is here for the long-term. AirToken is easy to understand and is helping a large part of the population that may otherwise be forgotten. When I  look for altcoins to invest in, the most important financial factor for me is the market cap. You can see that the market cap is currently only $5.5 million putting AirToken in 305th among the list of other tokens at the time of this writing. In my professional opinion, once AirToken hits its first major exchange, the market cap will easily rise to $20 million, a 4x ROI (Return on Investment). While I believe AirToken will rise much higher in the long-term, this is a conservative, realistic view of the short-term growth of this token.

Disclaimer: The analyst does not currently own AIR tokens but after researching may put some cash in for a long-term hold.

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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Analysis

Bitcoin’s Record-Breaking Rally Continues as Prices Cross $8,100

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Bitcoin surged to new highs on Sunday, as the world’s largest crypto by market cap continued to generate bids following the cancellation of Segwit2x.

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BTC/USD Price Levels

The value of a single bitcoin reached a daily high of $8,110.59, its best level on record. At press time, BTC/USD was valued at around $8,002 for a gain of 4%.

With the gain, bitcoin’s market cap now exceeds $133 billion. That’s roughly $100 billion greater than Ethereum, the market’s second most valuable cryptocurrency.

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Bitcoin has added more than $1,100 over the past five sessions. It was down around $5,600 just one week ago.

Bitcoin Cash (BCH), a digital currency alternative that broke away from the original blockchain Aug. 1, was down 5.1% at $1,185. BTC and BCH locked horns earlier this month after the Segwit2x hard fork was abandoned.

$10,000 and Beyond?

Institutional clearing platform LedgerX has initiated its first long-term bitcoin futures option, which is set to expire Dec. 28, 2018. In setting up the option, LedgerX is assuming a price of $10,000 at the time of expiration. That’s a 25% premium on current levels.

Investors who buy the option are essentially saying they believe prices will exceed $10,000 by the time of expiration.

Bitcoin is being helped by growing institutional demand for the digital currency, as hedge funds, day traders and other mainstream investment outfits look to access this burgeoning asset class. CBOE and CME Group have each announced plans to integrate bitcoin into more conventional investment vehicles in the coming months.

The rush of institutional money into bitcoin is a sure sign that the digital asset class is becoming too big to ignore. The value of all cryptocurrencies in circulation has already exceeded $230 billion, with more than a dozen coins valued at $1 billion or more. Nine others have a market cap of $500 million or greater.

Coinbase Responds

The rise of institutional capital has also compelled Coinbase to introduce a custodial service targeted at account holders with more than $10 million in assets. This service targets hedge funds and other institutions that have remained largely on the sidelines of the crypto revolution.

In a recent blog post, Coinbase CEO Brian Armstrong announced that the new service will launch sometime next year.

“When we speak with these institutions, they tell us that the number one thing preventing them from getting started is the existence of a digital asset custodian that they can trust to store client funds securely,” Armstrong wrote.

In addition to maintaining the minimum $10 million asset requirement, institutions must pay a $100,000 setup fee to gain access tot he Custodial program. In response, institutional investors will receive assurance that their assets are secure.

The Coinbase Custody website lists broad support for bitcoin, Ethereum (ETH) and Litecoin (LTC), as well as ERC20 tokens. The ERC20 protocol has emerged as the favorite for startups launching initial coin offerings (ICOs), a controversial crowdfunding model that has already overtaken early stage venture capital.

Disclaimer: The author 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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Cryptocurrencies

Is Ethereum Ready to Play Catch Up With Bitcoin?

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In mid-June of this year, the difference between the market capitalization of bitcoin and Ethereum had narrowed down to less than $8 billion. This had many market participants excited. They expected Ethereum to dethrone bitcoin as the leader, a move popularly termed as flippening.

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Key observations

  1. Ethereum has hugely underperformed bitcoin
  2. The chart pattern suggests that Ethereum is likely to play catch up in the next few months
  3. Stay on the long side of Ethereum to benefit from the bullish setup

However, fast forward five months and the difference in the market capitalization of the top two cryptocurrencies has increased to about $96 billion. This shows that while bitcoin has raced ahead in the past few months, Ethereum has hugely lagged behind.

However, is the underperformance about to end?

The chart pattern shows that Ethereum is likely to embark on a rally of its own that can carry it to $645 to $670 levels in the next few months. Let’s see how we arrived at these levels.

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Ethereum opened trading at $8.16 on January 1, 2017. It started its rally in March and by June 12, it reached a high of $420, an astronomical rally of about 5047%. Thereafter, it entered a period of consolidation, digesting the gains.

On the charts, Ethereum has formed a large symmetrical triangle, which usually acts as a continuation pattern. The breakout is generally in the direction of the long-term trend, or the trend that was prevailing before the pattern formed. In this case, the sharp move from January to June confirms that the cryptocurrency was in an uptrend before forming the triangle.

However, this is not a fool proof trade because sometimes the symmetrical triangle acts as a reversal pattern. Therefore, the best way to play this trade is to wait for a breakout of the triangle before initiating any trade.

Where can we take an entry?

Currently, the resistance line of the triangle is at about $378 levels, a level close to today’s intraday highs. The bears are likely to strongly defend this level. However, if the bulls breakout of $378 and manage to close above the resistance line, the trade on the long side will set up.

Different traders use different methods to confirm whether the breakout is valid or not. Some wait until price moves 3% above the breakout level, others wait for three consecutive closes above the resistance level.

However, we have observed that the best breakouts never look back, hence, waiting for three days may lead to a missed opportunity. Therefore, we can wait for a closing above the resistance line of the triangle and initiate the long positions on the following day.

The breakout can face resistance at $400 and $420. However, we expect the virtual currency to scale both these resistances and rally towards its pattern target zone of $645 to $670.

Notwithstanding, even the most reliable patterns can fail. Therefore, our stop loss will be kept at $340. We don’t want to hang on to the trade if it falls back into the triangle. We shall raise our stops to breakeven as soon as Ethereum breaks out to new lifetime highs. From thereon, we shall trail the stops higher to protect our paper profits.

Note

The chart pattern suggests a resumption of the long-term uptrend in Ethereum. However, this will not get confirmed until the cryptocurrency breaks out and sustains above $380. Therefore, please initiate positions only on a breakout and close above the triangle. Entering presumptive trades may result in losses.

Featured image courtesy of Shutterstock. 

 

 

 

 

 

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