Cryptocurrency Drama (Part 3)

Behold, the penultimate instalment in my first and only play! It’s brilliant so far, isn’t it?

In case you missed part’s 1 and 2, you’d better catch up here: (or else you will be totally lost!)

Enjoy!

See you tomorrow for the thrilling conclusion to this drama!

Scene 2

The is a knock on the door. The Director of Automated Networks opens it to reveal Bit Brain standing in the doorway.

DIRECTOR of AUTOMATED NETWORKS
Please, step inside and have a seat Mr Brain!

BB enters and shakes the extended hand of the DAN. They both take a seat.

DIRECTOR of AUTOMATED NETWORKS
Ernie tells me that you wish to discuss something with me?

BB
Thank you Mr Director. Yes, I would.

DAN
I’m guessing that this has to do with your insufficient CPU preventing you from carrying out transactions on our shopping network?

You do realise that this is just temporary right? A month from now the REX lending contracts will expire and things will probably return to normal. Probably. Until then we get to demonstrate how much traffic our network can handle from the EIDOS box; it’s a good thing. Also our franchise will soon upgrade to our optimised “Version 2.0”, that will make us even more efficient!

BB
Well, I suppose that the CPU issue inspired me to be here, but that’s not really why I asked to see you.

DAN
Then I am curious Mr Brain, why are you here?

BB
I am here because I’m concerned Mr Director. I’m concerned because your store is experiencing a rather severe issue, and all anybody says about it is that “it’s a good thing”. Mr Director, I am concerned because you and your supporters are in denial! I haven’t seen this much denial since that German guy said he was going to open a bar that specialises in selling carrot juice; I still can’t believe that so many of the Carrot Bar’s investors were in denial about that scam!

Mr Director, thousands of shoppers can’t shop here at the moment, and you just don’t seem to care because the richest ones still can!  Don’t you see how bad that looks?

DAN
Mr Brain, I think you’re blowing this out of proportion. Anyone who puts enough money into our CPU can still use the system, I don’t see the problem.

BB
I can appreciate that. Can you appreciate that many users can’t afford that? Do you have any idea what it’s like to be in there shoes? My memory is a little fuzzy on this point, remind me again just how much investment capital you attracted when you started up this business?

DAN
Yes, yes, we broke records when we started this business, but that’s not my money, that money belongs to the business.

BB
Yet the board of directors controls it. You get to say how and when it is used. You would never know what it is like to be stuck with only a single unit of credit on your CPU card, because that isn’t a reality that any of you have ever had to experience. But that is a reality that thousands of us customers experience right now, and Mr Director, we can not use your shopping network!

DAN
But can’t you see? The system is working as it should. That is what decentralisation is all about! He who puts the most into the scheme, gets the most benefit from the scheme.

BB
That’s fine, I think we can all accept that. But many of us were led to believe that we had already put sufficient money into the scheme, only to now be told that we will have to invest far more if we want to enjoy predictable, regular access to it! That’s not fair Mr Director! You need to address the problem of EIDOS denying resources to the majority of the network. You need to address the exploitation of your system!

DAN
We don’t see it that way. This is a good thing. There is no problem here.

BB
Damn it Mr Director! Can’t you see that I’m trying to help you guys? Can’t you see that having a whole lot of people who can’t access your network, despite having CPUs, is a big problem? Don’t you appreciate that people don’t want to wait a month to be able to make a transaction? Can’t you understand that nobody wants to create a start-up business as part of your franchise if their customers won’t be able to access their services?

Yesterday I ran into a new guy in town, he says he is the newly appointed District Apothecary. He wants to move into one of the abandoned buildings and start his own District Apothecary service – his DApp,
but he is afraid of the start-up costs. In the past I may have sent him here, to you guys, but now I would never do that to him. Instead I am going to suggest that he joins Ned from across the road and becomes part of his
franchise.

You see Mr Director, your mentality is becoming dangerously elitist, your store no longer cares about serving the man on the street, as long as it can serve a rich happy few, or those who are willing to exploit the system. That’s not right Mr Director, that’s not why we moved out here to the frontier! We are supposed to be moving away from systems like that, we are supposed to be creating fair systems for all! Sure the rich can enjoy benefits, but don’t shut the poor out of the network altogether!

DAN
That’s not our objective Mr Brain, we are neither anti-poor, nor pro-rich, we’re just decentralised.

BB
Don’t you worry about your franchisees? Don’t you worry that they will lose business after having placed their faith in you?

DAN
Our franchisees can create systems whereby they loan their own CPU to their customers, allowing them to continue to use our network of services.

BB
But surely some customers will exploit that to the detriment of others? That sounds like quite a complex undertaking for a start-up business to have to deal with; one which will require a potentially complex solution.

DAN
That’s true. But give it time.

BB
That could be more time and money than what people trying to create a DApp or something similar can afford…

Mr Director, as long as you can’t even admit that there is a problem, you can’t begin to address the problem. You know as well as I do that your franchise is hardly decentralised, the majority of resources and control sits right up at the top here with you! That’s fine, but then use it wisely! You need to address this issue! If you do not, then it will have repercussions for your business! Please just admit that there is a problem so that the problem can be tackled! The frontier is a new place, people accept that mistakes are being made, but in order to retain their confidence and respect you need to be honest with the people! Being realistic, open and honest attracts community support, that’s much better than sitting with disillusioned customers!

DAN
I’m sorry you see it that way Mr Brain. We see no issue. I tell you again, this is a good thing.

BB
Well I’m sorry too Mr Director. I tried to show you an impartial reality, but there are none so blind as those who will not see.

Exit Bit Brain

Perspective on Altcoins

Today I would like to do a fun little exercise. Well, I think it’s fun because I’m a crypto lover. If you don’t like crypto, then you should probably stay well clear of my blog!

I spoke about the silliness of altcoin bashing last week, so I’m not going to delve into that again. Suffice to say: I believe in the cyclic nature of markets, and that altcoins will rise again. There ARE signs that that rise has started (meaning that altcoins have bottomed), but that has yet to be confirmed.

For today’s exercise I’m going to look at the following hypothetical situation:

Say I put $100 into the top 20 altcoins. What would they all be worth if they then got back to their All Time Highs?

I will be using the CoinGecko top 20. I know that most people prefer CMC, but I like the added functionality that CoinGecko offers. For example: with CoinGecko I can easily see how far each coin is from its All Time High (ATH).

From https://www.coingecko.com/en?view=all_time_high

Below is a table which I constructed to display those figures. Remember, in each case we are investing $100 at current prices, and then seeing what will happen if that coin gets back to its ATH.

1 BTC $214,59
2 ETH $800,00
3 XRP $1 162,79
4 BCH $1 315,79
5 USDT $132,28
6 LTC $613,50
7 EOS $694,44
8 BNB $194,17
9 BSV $199,20
10 XLM $1 265,82
11 ADA $2 857,14
12 TRX $1 219,51
13 XMR $862,07
14 LEO $200,80
15 OKB $168,07
16 LINK $168,92
17 HT $156,99
18 ATOM $206,19
19 NEO $1 785,71
20 IOTA $1 960,78

It’s true that one shouldn’t read too much into this: the playing field is not entirely level (for reasons such as some coins only being launched after the peak of the bull market). But what it does serve as is a semi-standardised benchmark indicator of potential ROI.

Yes, we all know that BTC is safer than altcoins, but I personally believe in chasing some higher potential ROI at the expense of a little more risk, and even a little bit of extreme ROI at the expense of massive risk. Note: being the top 20 coins, this table does not represent the “massive risk” section of the market – well….. that’s debatable, we’ll get back to that shortly.

Those are the numbers, the raw stats. Let’s now dig into them a little deeper:

At a mere $214.59 return on a $100 investment, BTC looks positively pedestrian when compared to the average – and it is. This is the entire point of investing in altcoins instead of in BTC, that and helping many small projects to become part of our everyday lives – thereby greatly enhancing them.

However, and this applies to all the coins, these returns are only to get back to ATH. They do not include further market growth beyond that point! Only the staunchest bears would believe that BTC has already reached its ultimate ATH. Another term for such people is “idiots who should be ignored”. As the ultimate crypto store of value, I believe that every portfolio should have BTC in it. I would consider 10-20% to be a good figure, though that is largely down to personal taste (and my own percentage is way outside that bracket at the moment!)

Moving lower down the table we see ETH returning $800. Wow, that’s really not a bad potential investment! Ethereum remains the biggest and most popular crypto platform by far, and it is really the only one with many high quality DApps already running on it. No, your 100 casino DApps on your favourite chain are not “high quality”. Even NEO – and you all know how much I love NEO – can boast only a small handful of good DApps at this stage. But Ethereum has hundreds of them, even if it is also packed full of trash coins which should, and probably will, die. The ETH team is also still very active and the platform continues to be developed, albeit that it misses target dates almost as badly as Cardano does! 😄 In summary, Ether is a fairly secure investment with possibly much higher returns than what BTC can offer.

You all know my feelings on Ripple. I mean XRP. I mean Ripple. Apparently XRP is Ripple when Ripple does good things such as forming major partnerships; but XRP is not Ripple when Ripple is criticised for e.g. being centralised or being a company full of ex-bankers. Oh how I hate Ripple and everything it stands for! BUT: like most dodgy investments, Ripple still has a LOT of support. I do not doubt that Ripple will once again see very good returns when the market runs. However, I could never condone investing in such centralised, anti-Satoshi rubbish – so if you want to hold Ripple, then you will be doing so without my support! The returns you may get on Ripple are better than those of ETH, but I would chose to put my money on ETH instead!

BCH and LTC remain viable alternatives to BTC, especially for smaller transactions. I believe that there is a strong future for such coins, a future in which BTC is the store of value, and such coins (you can add DASH, NANO etc to the mix) become the de facto mediums of exchange. It is interesting that BCH offers far higher returns than LTC when looking at their respective ATHs. I surmise that this may be because people once perceived BCH as possible legitimate competition for BTC, whereas LTC was only ever a coin that worked alongside BTC. The two coins are pretty even in my eyes.

Note Tether sitting between BCH and LTC, with a possible return of $132.28! I find that rather amusing! 😆

At $694.44 EOS is not looking as good as ETH. This should serve as a mild warning to EOS investors. I have long said that EOS is good, but over-hyped. I stand by that statement.

At $194.17, BNB is deceptive. As far as exchanges go, Binance is by far the most well known. Crucially, its ROI to ATH is less than that of BTC, which on its own should make the decision to buy BTC instead of BNB a simple one. But BNB is a special case, and I caution against writing it off. While my favourite exchange is KuCoin (and its KCS token), I can not ignore the fact that Binance is also launching programs, projects and platforms left, right and centre. It’s very popular and I have great faith in its CEO. CZ has a brilliant mind and a comprehensive understanding of blockchain technology, business principles, international affairs and also a general sense of what a powerful agent of positive change cryptocurrencies can become.

I assess that if any blockchain company can become the next “Amazon”, “Google” or “Microsoft”, then Binance has the best chance of being that company. It is even possible that as other cryptocurrencies grow, so Binance may one day pass even BTC in terms of market cap! Don’t laugh, just think about it…

BSV is a joke, as is Mr I-did-not-pay-now-I’m-back-in-court Faketoshi. It is sad that such people even exist, they are an ugly scar on the beautiful face of crypto. ‘Nuff said.

Of the top 10 coins, XLM offers the second best potential returns (after BCH) on its climb back to ATH. Personally I consider it a little over-valued, but I far prefer it to its greatly overvalued and far more dodgy cousin XRP.

With the best potential returns of the lot (an incredible $2857.14 for a $100 investment) ADA does look like a prime choice! However, I urge you to remember what I have often said: that US investors are too fixated on US crypto in general, and also that ADA is way behind where it should be: many promises, no deliveries. Other platform coins have since moved far past it, even if market cap has yet to catch up to that fact.

At $1219.51 for $100, TRX is looking strong! It’s not that high up that you would expect it to fall down the market cap ladder, the potential returns look good and Tron is a good product. True, like most of the platforms, it also lacks a large number of good DApps – but those will probably come with time. Justin Sun is a dynamic young entrepreneur with enviable levels of charisma, I think there is a high chance that he will lead Tron to success.

XMR has been quiet lately, which is not always a good sign. But I still see Riccardo Spagni on every episode of “Magical Crypto Friends” and he still seems enthusiastic. While they still have issues to iron out, Monero remains the biggest name in privacy coins, and that is NOT something to ignore! A potential return of $862,07 to ATH is only slightly better than that of ETH, but one could argue strongly in favour of privacy coins, based on the way that crypto regulations are going. With exchanges blocking ZCash (which I no longer endorse), it is clear that privacy coins are a threat to the financial centres of the world. If they do succeed, then XMR may well be the most successful of them all.

LEO has a relatively low potential return (very similar to that of BTC), easily explained because it is so new. However, it is the coin of BitFinex, and I have no love for that exchange. I’m still waiting for the whole dodgy BitFinex/Tether monster to come tumbling down. I’m happy to have closed my account there a long time ago, and I have no intention of having anything further to do with that exchange. I suggest avoiding it.

OKB is the coin of another big exchange, though honestly it isn’t one of my favourites and there are other exchange coins which I would much rather hold. There’s nothing inherently wrong with it though, and like LEO, its price is not reflective of it’s potential, because it was only launched after the demise of the 2017/18 bull run.

To an impartial outside observer, the LINK figure of $168.92 should be very troubling! I keep saying that LINK is way too hyped at the moment. It’s possibly the most over-hyped cryptocurrency of all (at the moment). LINK is not a new coin and it’s not even a special coin in any way. Investors should be very worried that it is hovering so close to its ATH figure. I like LINK, but I would NOT buy it now!

HT is almost identical to OKB for the purpose of this post. I wouldn’t put money there.

ATOM has low returns back up to ATH. But Cosmos has been around since 2014 so it… wait. What’s that you say? Cosmos is a new coin? Oh yes, you’re right. Cosmos is a 2019 coin which (to me) looks remarkably similar to Blocknet (BLOCK) – a coin which has been around since 2014. Why is that relevant? Because BLOCK has a market cap that is more than 130 times smaller than that of very similar Cosmos. What does that mean? It means that ATOM is all new coin hype. No thanks.

NEO’s looking solid with a potential return of $1785.71 for its $100. It’s well known how much I love NEO, and with the current blockchain developments in China (which I have been predicting since the China FUD in 2017), I love it more than ever.

IOTA is a dark (and largely forgotten) horse, sitting at the bottom of the list, but with a figure of $1960.78 per $100 should it make it back to ATH. That’s the second highest in the table, and should not be ignored. I know there have been some criticisms of it, but I honestly haven’t looked deep enough into IOTA lately to know if they are valid or not. As with everything in crypto – you should do your own research.

Conclusion

I believe that good altcoins (note: GOOD altcoins) stand to provide much better returns than Bitcoin will in the near future. Of course with the chance of greater returns comes greater risk. How much risk you are willing to expose yourself to will depend largely on your investing style and current financial situation – I recommend being safe rather than sorry. Having said that, the mere fact that somebody chooses to invest in crypto indicates that they probably have a pioneering spirit (it’s still early days for crypto) and personally I already see BTC as a minor “risk”. If BTC works, then it’s logical that altcoins should work too, thus I invest a decent amount of money in them. As of yesterday, 43.2% of my crypto portfolio is in Bitcoin, which is actually almost the highest percentage it has ever been, a consequence of me holding my alts through the bear market.

I continue to invest slowly and carefully, some in BTC, some in altcoins (though I also keep missing the dips!). In the long-term I believe that altcoin investors will be richly rewarded, and I will continue to invest accordingly. Remember that the table above only deals with the top 20, there are many more coins out there. I suggest that people do their best to make decisions based on facts as opposed to emotional attachment. Crypto is often a sentiment game, but sentiment can’t keep a coin going indefinitely.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Cryptocurrencies – Recent Highlights and the Road Ahead

Well it’s been quite a week for crypto! After too many months of no significant action, things are (finally) starting to come to a head. I’ll briefly discuss the highlights by fitting them in under the simple headings of “Bitcoin” and “Altcoins”.

Bitcoin

The recent Bitcoin price dip to below $7500 was not a surprise. I, like many other analysts, both expected it and welcomed it as a buying opportunity. Most of us (myself included) expected it to dip further. Indeed, I had yet to have a buy order fill (silly me). What we didn’t expect was a rapid BTC rise. Twice.

That the reason for those rises is still open to debate, indicates that (as usual) nobody REALLY knows the real reason behind them. Bullish sentiment appears to be partly from short squeezes, but mainly from FOMO about pro-blockchain comments made by Chinese president Xi Jinping. No doubt the full story is more complex than that, but FOMO never bothers with getting all the facts.

Despite the rapid rise, a little messing around on my charts reveals that BTC MAY still be in a descending channel.

I emphasise that this is just a theory, but I wouldn’t rule it out. My gut feel (which is often wrong when it comes to crypto) suggests that prices may yet again dip lower in the channel. I still believe that BTC has to reach the vicinity of its long-term trendline (approximate position indicated below) before it can begin to climb properly. Granted: the exact position of that trendline is hardly cast in stone.

The massive volume increase which followed the Bitcoin price rise is indicative of just how much (dumb) money is just waiting in the wings – waiting for some sort of confirmation that bitcoin is not going
to crash to zero before it decides to invest.

Altcoins

I have never been impressed by the altcoin bashing that has been so prevalent ever since the Bitcoin Maximalists greatly and suddenly multiplied in number starting in mid-2018. I consider altcoin bashing to be rather immature and short-sighted. As sure as my name is Bit Brain, most of the altcoin bashers will flip and become some of the biggest pro-altcoin campaigners when altcoin season returns.

Altcoin season has threatened to return on several occasions, though we have no positive confirmation of that happening yet. Of course there will always be isolated instances, such as Chainlink which is doing
very well at the moment. I can only shake my head in dismay as I see the Chainlink supporters declare their coin to be bulletproof and capable of decimating all the others. Guys – Chainlink is good, but it REALLY isn’t
anything super-special!

Before I get too far off-topic, I think that altcoin season WILL return very shortly, and I strongly suggest (as I have been doing for over a year now!) that investors stock up on all the ridiculously, laughably, insanely, insert-superlative-herely cheap altcoins that are currently available.

This last year has given us considerable new insight into the possible long-term nature of BTC dominance (seen below). It appears that BTC dominance will probably cease to increase now, freeing up a lot of money to be invested in altcoins.

From https://www.coingecko.com/en/global_charts; modified by Bit Brain

The SHITPERP Index (that’s a real thing, I promise) which tracks the performance of selected altcoins is indicating the same thing. It’s chart shows a double-bottom, indicative of a transition from losing value to gaining value.

President Xi Jinping’s comments (referenced earlier) seem to be having a direct effect on Chinese coins. I have noticed my beloved NEO doing exceptionally well ever since BTC took-off this weekend. The same applies to some of my other Chinese coins such as Ontology (ONT) and THEKEY (TKY). I have been saying for a LONG time that Chinese altcoins is where the smart crypto money should be. I’m sticking to that.

China definitely seems to be looking more blockchain friendly than both the US and the EU at the moment. Combined with their rise to global economic and military dominance (sorry USA, that is happening), I’m feeling VERY good about my Chinese altcoin investments.

BUT:

Note that Xi Jinping is talking about BLOCKCHAINS, not cryptocurrencies! I honestly think that the Chinese crypto hype is premature. Sure, it’s a GREAT idea to get in very early at ultra-low prices, but I don’t think that the current FOMO wave is thinking along those lines; they’re just thinking “China” = “pro-crypto” = “Chinese crypto to the Moon”; which is not necessarily the case. Chinese authorities appear to want blockchain tech that they can control, that’s NOT crypto!

It is however true that Xi Jinping is a visionary and that he knows the importance of not getting left behind in the blockchain race. In the long-run I believe that China will come around to the realisation that decentralised blockchains are the ones that work best and that centralised ones (like many reserve banks are currently investigating, or like Zuckerberg’s shitcoin extraordinaire) are doomed to fail thanks to the transparency and forced accountability that blockchains offer. It’s worth remembering that the Chinese government has been trialling THEKEY for several months already. I also remind you that Da Hongfei got WAY ahead of the game and helped China develop Chinese blockchain regulations about two years ago – regulations he built NEO (and by extension, Ontology too) around…

Looking to the future of alts, my crypto investing suggestions remain unchanged:

1) Good Chinese coins (NEO is still by far the best example, but others (e.g. VeChain) – are also worthy of consideration)

2) Good Exchange coins (My best bets are: Binance (BNB), KuCoin (KCS) and Nash Exchange (NEX) – all of which I have referral links to in my signature block)

3) Good Platform coins (you guessed it: NEO again! Other coins that I would recommend in this category are EOS, Ether (ETH), Ontology (ONT), Tron (TRX) and Holochain (HOT).

4) Other coins which have good use cases, especially the neglected ones which have survived the extremely harsh altcoin winter. Yes, I STILL love CargoX (CXO) (check them out at www.cargox.io and tell me what’s NOT to like!), but there are many others such as Kyber (KNC), Enjin coin (ENJ), UTrust (UTK), TenX (PAY), Worldwide Asset Exchange (WAX), OmiseGo (OMG) – too many to list. Just remember: “Favourite” does not equal “Good”!

Final Word

To my fellow NEO investors, it’s good to see NEO getting some LONG overdue attention, but be prepared for the FOMO-turns-to-FUD price drops which are sure to come. Like most good investments, NEO’s strength will lie in its long-term performance.

Yours in crypto

Bit Brain

Featured image in the public domain. Sourced from https://knowyourmeme.com/memes/its-over-9000

All uncaptioned charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




BTC update: 21 October

As BTC grows so it slows. This is a little frustrating to those of us who have grown used to the rapidly changing BTC market of old, but on the other hand, it’s a positive sign of adoption and of maturation.

While on that subject, I would like to remind everybody just how far we’ve come since late 2017 (when BTC was at the height of a major bull run). We may not see the developments taking place on a day-to-day basis, we may not notice how much the market has changed since then, but it HAS!

Think of the primitive wallets you used two years ago. Think of the clunky exchanges and their primitive user interfaces. Think of all the new crypto derivatives products, the regulations which make institutional investment possible, the constant mainstream news coverage. The price doesn’t reflect it, but crypto has made good use of the bear market and subsequent consolidation period. Crypto has grown – something that will stand it in good stead when hype picks up again. For example: Bitcoin’s hash rate is currently about six times what it was when BTC was at its All Time High. Crypto is fully ready for the next bull run, now it’s just a question of waiting for the investors to catch up!

Without further ado, let’s look at some charts:

Forecast:

My last couple of posts on Twitter have looked something like this:

It is my belief that BTC price is forming a bear flag, from which I expect it to drop into the low $7000s, possibly even into the $6000s if the $7000 psychological support level fails to hold.

For this reason I have made the mid-to-low $7000s my “Buy Zone”, while anything in the $6000s is my “Buy Like Crazy Zone”. I do not anticipate a scenario where BTC drops below $6000.

However, my already-published Bear Flag Charts can not be quite correct. I say this because BTC broke below their base this weekend, but then recovered. Analysing this, I have concluded that the most likely scenario is that a bear flag is still forming, and I have adjusted my charts accordingly to incorporate the recent price dip. My latest interpretation of the flag is depicted by the shaded rectangle on the chart below.

The most likely short-term future scenario is now that BTC will climb in price until it reaches the top of the flag again. This will occur at approximately $9000. Thereafter, BTC should drop back to the bottom of the flag and break through into the “Buy Zone” (at least I hope it will). I expect such a downwards break to occur in the last three days of October.

You may have noticed a thin, dotted, horizontal red line at $7600 on the charts, this is merely a price alert that I have set at that level. If it triggers, I will fine-tune my own buy prices, because I’m looking to buy from $7500 downwards.

Accuracy and probability:

My original bear flag was a text book example of a bear flag. For this reason I had fairly high confidence in it, though flag and pennants are never a sure thing. After the adjustment of the flag, it may be that it becomes more of a Descending Channel than a bear flag, but this doesn’t really matter because:

1) The outcome of the two patterns is identical,
2) The two patterns have similar levels of predictive reliability (around 70%).

Unfortunately there are many different possible scenarios that could occur from this point forwards. For this reason it is difficult to confidently predict any specific scenario with certainty. BTC may continue to rise now and break out of the top of the flag – destroying it completely, or it could continue sideways and begin to create some other pattern.

What I have described in this post in my best guess, based on current levels of market hype (low), volume (stagnant), previous price movement patterns and long-term trendlines. I am about 50% sure that BTC will take a dip to the low $7000s/$6000s, find the long-term trendline and then move gradually upwards again. It’s also worth remembering that during times such as these, markets often plunge unexpectedly, followed by a very rapid recovery. Such a price movement may move well beyond the levels predicted, and could be exploited by shrewd traders who have their order prices set to catch it.

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Cryptocurrency Quarterly Report – Q3 2019 (by CoinGecko)

Hooray, it’s that time of year again!

The time of the next CoinGecko Quarterly Report on cryptocurrencies.

Bit Brain readers may remember that I’ve spoken about CoinGecko Quarterly Reports before. Back in July I wrote this post “Cryptocurrency Quarterly Report” about the Q2 2019 CoinGecko report.

As before, I want to use this post to give you an idea of what is in that report, so that you can be sufficiently tempted into reading it for yourself. Once again I want to start by praising the high quality of the report, and stating what a smashing job CoinGecko does in the cryptospace. CoinGecko remains Bit Brain’s go-to site for general crypto information – especially related to token/coin prices and trading. The reason I use CoinGecko so much is simple: it is the best site.

Remember that I don’t work for CoinGecko, they don’t pay me to write this, and I’m not affiliated with them in any way (not that I would object to any donations *cough cough* ? ). What I write here is thus an honest representation of my findings and experiences. With no further ado, let’s take a look at what can be found in the Q3 Quarterly Report.

CoinGecko Quarterly Report for Q3 2019

Firstly – where do you find it? On the CoinGecko site, click the three horizontal dots in the main links bar and select “REPORTS”. From there you choose the latest report “Q3 2019 Report”, and voilà – the information is yours to absorb!

The CoinGecko team have stuck with the formula of producing something long enough to be complete, but short enough so as not to bore you. As before, this report is comprised mainly of diagrams, charts and infographics, as opposed to boring walls of text. The report is 53 pages long (“slides” is probably a more accurate term than “pages”), of which about 5 pages are non-content intro and outro sections. etoro has sponsored this report, so thanks to them for that..

This report begins with the usual “Founders’ Notes”, whereafter it dives into its first major topic: Market Dynamics.

The Market Dynamics section is ten pages long, and is a must-read for crypto aficionados. Much of the information will be old news to those who watch crypto closely, but even so there is value to be had from seeing this information from CoinGecko’s perspective. Even arrogant people like myself can appreciate an objective and intelligent overview of the crypto market when presented in this manner.

I find that such information helps to put things into perspective and to check that my own predictions are in keeping with a realistic and unbiased view of the future (and past).

The next section of the report deals with CoinGecko’s unique “Trust Score”. While I have already reviewed CoinGecko’s Trust Score in detail, that was during its infancy and much has changed since then. For those who may not know: CoinGecko assigns a score to each trading pair for each cryptocurrency listed on its site. How they arrive at those scores is briefly outlined in this report. They indicate the differences between their new Trust Score 2.0 and the previous Trust Score 1.0, as well as mentioning upcoming features to be integrated into the Trust Score system.

The next major section of the report is dedicated to Derivatives.

Crypto derivatives are becoming ever more popular, especially as crypto companies are eventually starting to get approvals from conservative regulatory bodies such as the United States SEC.

On a personal level I should state that I am not a fan of any form of crypto derivatives and that I don’t use any of them. It’s not that I don’t trust them, it’s just that I am opposed to a system that deals with derivatives as opposed to the underlying assets. I believe that many of the problems of current fiat systems are tied to a runaway derivatives market.

My old-school beliefs aside, derivatives are exciting for crypto and are an indication of a more mature market that should gain more credibility and public acceptance. They also provide new on-ramps into crypto. Much good can come from crypto derivatives, such as greatly increased publicity.

For those who are keen to start trading derivative but don’t really understand them; CoinGecko gives a fairly complete high-level overview of crypto derivatives. You will be introduced to all the major types of derivatives and the terms associated with trading them.

The explanations are very simple and are written for the layperson, so most people should have no trouble understanding them (see the pumpkin-based example below which explains how Futures contracts work).

For more experienced traders there is a “Derivatives 201 – Serious Traders’ Handbook” section. It’s also not rocket science, but explains some of the more advanced terms of derivatives trading.

The Derivatives section of report ends on an exciting note: that CoinGecko is working on their own Derivatives Market tracker (much like their existing coin tracker). If you want to see a screenshot of what it looks like in prototype – then go read the report!

The News section of the report deals with the big news stories of the quarter, just a very short introduction into each. I learnt that I had missed news of a “shitcoin index”. Interesting…

This page dedicated to Binance shows just how much binance has been up to in the last quarter: quite amazing!

I keep suggesting that Binance Coin (BNB) is a really good coin to hold…

I would love to see a similar slide for KuCoin, that exchange has been REALLY active in the last quarter! (How about it next time CoinGecko?)

While you’re out buying BNB (at ridiculously low discount prices right now), you may want to check out some (far cheaper) KuCoin Shares (KCS) too…

The next big section of the report deals with DeFi (Decentralised Finance). DeFi has quickly become a buzzword in the crypto community, though it remains poorly defined and possibly misunderstood.

The CoinGecko Report delves into with DeFi in surprising depth, and should therefore give anyone a very good idea of what it is, why it exists and what it means to the future of finance.

DeFi should be old news to the crypto stalwarts, but will be valuable information to those who have only started learning about crypto this year.

The final main section of the report deals with DApps. A series of tables and charts analyse DApps by blockchain, activity and type. This is probably my least favourite section of the report, because I would like to see more of the big name blockchains added to it. Having chains like TOMO and IOST in the report while excluding chains like NEO, Waves or Cardano makes little sense to me. I know that Cardano is largely a bunch of unmet promises, but it still has a very high market cap. It would be good to include it – if for no other reason than that its over-optimistic bag-holders realise that…

The report finishes up with a brief look at the CoinGecko Changelog platform hosted at Coindesk’s “Invest: Asia”.

Finally there is the usual page with links to their (many) social media accounts. I follow them on Twitter and STEEM and I have an account on CoinGecko itself. I also use CoinGecko API calls for my personal crypto-tracking spreadsheets.

Conclusion

Well done to CoinGecko for producing another very fine market report. For those who haven’t read one before, I suggest you take a look at it. For those who don’t use CoinGecko, I strongly suggest that you do. Since I started using CoinGecko as my main coin tracker (about a year ago), I haven’t looked back.

As we move into the final quarter of 2019, I expect to see the market take its final dip before finally turning around properly. Altcoins are well overdue for some serious attention, and have been heavily neglected and even openly mocked throughout 2019. That situation will not last, and while I think that BTC will have to regain popularity before altcoins do, I think that this final quarter is the period where that process will begin. We should have an exciting Q4 of 2019 – but not nearly as exciting as what 2020 will be… I hope to see some increasingly bullish CoinGecko reports next year!

Yours in crypto

Bit Brain

All images are taken from the CoinGecko Quarterly Report for Q3 2019. Note that Bit Brain has been granted permission by CoinGecko to use their images.

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Bitcoin Price Clears First Hurdle

Few days back we looked at bitcoin price as it neared the 7400 area again. Since then price got a boost and rallied with yesterday’s candle giving a nice push through the 8400 area, which is where price stalled out on the last bounce.

Ideal situation is we stay above 8400 before making a run at the prior support level of 9400. There are some prior tops from earlier in the year at 8700 as well so we could see some struggle there first.

Patience is Key

Downside remains the same. 7600 area is support. I’m not initiating any new positions here as the upside is nearly the same amount as the potential downside. Still holding my adds from the past couple weeks at 8400 and 7800. 9400 is my first profit target.

BITCOIN: WXY Double Combo possible terminations zones

Long time since I posted my last post about BITCOIN , I think last time was on August 24th and I talked about the evolution of a complex WXY Double Combo correction.

Answering to a request of @beiker, I am going to show you what I think can be the possible scenario currently on-going.

The Y leg was in doubt that time, we were either thinking a possible triangular shape or a Flat configuration in order to end the wave II of BITCOIN.

However, it seems that the most likely, in my opinion, is a finalization of the correction by a FLAT configuration for the “Y” leg:

In my opinion, currently we have 2 possible termination areas probabilistically speaking:

  • The area around the 100% of the FIBO length of the wave “W”, corresponding to 7400 USD
  • The area around 5500 USD which is around the 127% of the FIBO length of wave W

Of course, the volume is so small that I would no enter in any LONG position till a clear increase of this variable will become a fact.

@toofasteddie


Disclaimer: This is just my personal point of view, please, do your own assessment and act consequently. Neither this post nor myself is responsible of any of your profit/losses obtained as a result of this information.

CryptoMood – an app review

Note: This post is written as an entry into the CryptoMood Content Competition hosted on Trybe. Why don’t you make a note to enter it yourself? Prizes are pretty decent and you have until the end of October to check CryptoMood out and to write your own review.

Let’s begin

The competition rules state that this post/review “should be written as an answer to the question “What would you have done if you had access to CryptoMood 3-5 years ago?” “

I’m going to make things really simple by answering that question immediately. My answer is this:

“I would use it the same way as I do now.”

This post tells you how I use it

I’ve been trialling CryptoMood for well over a month now, and I can happily report that it has passed the Brain Test.

What’s the Brain Test?

Like most ancient people (I’m in my 40’s), I’m stubbornly set in my ways: I like what I like and I don’t want to move outside of my comfort zone. I stick with what works for me.

But: I’m also well aware that technology moves ahead at a rapid pace, and that you neglect it at your own peril. I look in dismay at Octogenarians in my own family at the moment: at risk of being cut off from the world because they can’t send a simple e-mail message or operate a touch screen phone.

True story: A year or two back, I setup a laptop for a certain old lady. ALL she had to do was turn it on – one button. I configured it to boot up, connect to the internet through her cellular dongle and open her e-mail program for her, all without displaying any pop-ups or screens where she had to click “Okay” or “Yes” or anything like that. It was still too confusing for her, she still managed to get it wrong.

Trying not to end up like the poor little old lady I just spoke of, I make a habit of continually trialling new things. I keeps me abreast of the latest developments and teaches me how to use them. It also gives me a good idea of what is unique in the market, what works (or doesn’t work), and most importantly: what I should continue to use (and what I should just ignore).

This last part is the Brain Test. To have ‘passed the Brain Test’, means that something has been used by Bit Brain throughout the trial period, and now continues to be used by him. CryptoMood has passed the Brain Test.

Look, I’m not here to shill products, you know me better than that. I’m not saying that you must use CryptoMood. I’m not saying that it is my number 1 crypto tool or even that I use it daily. My primary crypto TA tools remain the raw charts. For monitoring the prices of coins, I still use CoinGecko. My primary FA tool remains the many crypto news sources which I check continuously.

What I’m saying is that CryptoMood does have value to me. Like most tools, there is more than one way to use it, it certainly offers more than just one function.

Personally, I use it mainly in two ways:

  1. Crypto Market Sentiment Analysis
  2. Missed News

Crypto Market Sentiment Analysis

CryptoMood does this very well, in fact, it’s designed around it. The app correlates news stories about different cryptocurrencies and then obviously performs some sort of quantitative algorithm on them – thereafter allocating each a score of “positive”, “negative” or “neutral”. That’s not really the part I use, as I already read most of the important crypto news reports (or in some cases just the headlines). The part I like are their sentiment charts:

The sentiment charts are a graphic format of the above-mentioned news analysis, as well as a chart of social media interaction.

To me, there is not that much value in tallying up number of positive or negative news stories about a coin. Obviously if a coin is, for instance, openly discovered to be a scam, then all the reports will be negative and that will be indicated as such. But in general the news reports we read tend to be subjective. It is more important for me to read the context of such information in the full news reports and to ignore the extremely large number of very poor crypto journalists out there, than what it is to see such information correlated into a single positive or negative news sentiment score. Mainstream financial journalists are notoriously poor at any form of crypto reporting.

Of much greater value is the social media score. There is a direct correlation between how often a coin is mentioned on social media and how popular it is at that time. For example: Chainlink has been trending lately, and we saw how that affected its price (even though it ended up climbing too high and “bubbling” a bit). Ravencoin would be a similar recent example.

Because markets are fickle, that which receives the attention at the time has got a far greater chance of rocketing up in price than what other coins do. For this reason, when social media sentiment on Cryptomood goes up, then one can expect the price of a coin to follow suit. Obviously the rise will not last forever. Social media trending will remain high as FUD sets in, and will continue to stay high when the bulls and bears fight each other during the inevitable price correction – so a modicum of common sense is still required when interpreting the charts.

Nevertheless, I find this feature to be very useful and it is one which most often prompts me to open my CryptoMood app.

Missed news

Though I read a lot of crypto news, I don’t read all of it. I also don’t follow every news service. Some days, when the market looks very dead (as it has done a lot of recently), I don’t even bother reading the news at all. This is when CryptoMood once again becomes very useful.

CryptoMood consolidates important news and presents it in a format that I can easily use to get myself up-to-date. It does this in various ways and you can pick which of them suits you at the time.

You can catch up on the days headlines, the latest social media posts or the trending headlines. Even better, you can select which one of the major coins you want to see news for, or you can see the news for all of them at once.

It is worth nothing that CryptoMood doesn’t have news for all the coins, but it does a good job of catering to most of the big names. You can make a Watchlist of the coins you are interested in, and then select which one you want to see news about from your homescreen. At the moment there are 18 coins to choose from. Note that the focus is definitely skewed towards the bigger name coins. For example, there will be no lack of Ethereum news, but you may struggle to find much happening in the Ontology feeds. Hopefully the smaller coin newsfeeds will be developed over time. In addition to giving you the news from your watchlist coins, CryptoMood will also tell you which coins are trending in the news, which is a useful feature in its own right.

Those are the two main things that I use CryptoMood for. But before I go, I should mention that there is a feature which allows you see the amount of crypto senton exchanges vs the amount of crypto withdrawn from exchanges to wallets in the past 24 hours. I’d be lying if I said that I used this, but for regular traders this could be invaluable information.

In conclusion 

CryptoMood forms a part of the very small group of crypto apps which I keep on my phone. That alone is high praise coming from me. I suggest that you check it out if you haven’t already done so. It’s free and easy to use, so what have you got to lose?

Yours in moody crypto

Bit Brain

Attribution: all screenshots from the CryptoMood app. Available on Google Playstore. Featured image from https://cryptomood.com.

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Bitcoin Making Us Sweat a Little Bit

At this point I don’t think anyone wants to see bitcoin break the 7,600 area support. There is alot of downside potentially from there and would mean a ton of buy order got eaten up.

So after Sunday’s down move we see price floating not far from that level today and it probably makes us all sweat just a little bit.

The good news is if price can hold this level again then it becomes a rather major support in the near-term and can act as a solid bottom for a potential run higher when bitcoin is good and ready.

When that is we can only guess. The 2020 halving could provide a catalyst as price runs up into it but that is still a ways off to expect it could happen now.

Bitcoin: Support Becomes Resistance

When bitcoin cracked 9,400 the next support level was around 8,400. Price closed there with a doji type candle (indecision) but failed to put up any fight and continued to fall lower.

Support becomes Resistance

With price getting down to 7700 and bouncing it was smart to keep an eye on 8,400 for the upside. Sure enough price got to that area and struggle and after closing lower yesterday did so again with today’s candle.

Now we wait to see if bitcoin will push lower and test that 7700 area low or if it can make another run at 8,400.

A move lower would be interesting as the 7,600 to 7,500 area is where everyone originally was looking for support on that prior move lower. There are a lot of buy order stacked in there, myself included. If that doesn’t hold than 6k is on the table.

For the upside it is 8,400 and then 9,400. Pretty simple. Let’s wait and see.