Current State of Markets

Hi there folks,

I read an interesting article on Coindesk.com, talking about whether this crypto rally is a bubble or not.For sure an interesting read, I will quote along the article but feel free to have a full read:

http://www.coindesk.com/bitcoin-ethereum-ripple-crypto-asset-class-finally-coming/

“Interestingly enough, this [total] market cap surpassed $90bn earlier this week, representing a year-to-date (YTD) gain of more than 400% from the value of $17.7bn at the start of the year, according to CoinMarketCap data, with a YTD gain for more than 350%

Alternative asset protocols have experienced even stronger gains so far this year, as these currencies draw robust inflows.

While some analysts warned that cryptos may have entered bubble territory, Arthur Hayes, co-founder and CEO of leveraged digital currency platform BitMEX, emphasized that these assets could experience further inflows now that wealthy individuals have started looking.

“We are finally at the point where wealthy individuals, those with [more than] $1 million of liquid assets, are considering whether to allocate a very small portion of their net worth into digital assets,” he said. “If this happens on even a small scale, the value of the entire industry will be in the hundreds of billions of dollars in short order.”

The broader cryptocurrency space may be well-positioned to draw additional inflows, due to the constant creation of new alternative asset protocols and the ever-changing range of value propositions they provide.

Tim Enneking, chairman of Crypto Asset Management, commented on this development:

“The growth of alts has changed [cryptocurrencies] from a one-trick pony to a range of investments in which one can construct a portfolio.”

And its true. Have you recently considered to take any outside money into the cryptospace to invest in one of those many opportunities popping up every day? Or even already invested another great amount because you feel this thing is close to getting really started? I know many people who just recently bought Bitcoins to invest in the altmarkets. Likelihood is, when you do it, others do it too. imagine just a little fraction of the global population has or is in the process of purchasing Bitcoins, not as for the reason to speculate with BTC, but to forward it to an alt exchange to buy some ETC, XRP, DGB, and what not.

What a massive inflow of capital into small but promising projects. There is not much innovation anymore in Bitcoin and people figure that. The real shiny ones are Altcoins who are capable of changing the face of money economy and IT. And in all honestly, out there are more profitable picks than you can possibly take. Research is key here, distinguish the dirt from quality, accumulate quality coins.

I know the voices on twitter and news are talking about the end of the rally. I believe this rally has not taken off yet and will do so with the momentum currently available. IMHO the #goldenage is unstoppable at this point. The only reason BTC can hold current level despite blocksize debate going on for years now is that fresh entrants come into the game and bring fresh capital to be distributed in many different alts.

Marketcaps of Altcoins will thus further accelerate until it spikes and becomes a runaway bull trend. This pattern will unfold this year and will leverage all coins to a way higher price plateau, that high that it is unlikely we will ever see a retest at this range ever again. That means if you are not positioned when this rapid moves happen, you missed the rally of a lifetime. Talking to shortterm traders here, you will be burned along the way as fuel for the accelerating price increase. We need to push out last weak hands before being able to spike seriously. Sellers and bears must be completely wiped out in order for the goldenage spike to begin.

Shorters, top sellers, margin traders, most of the get wiped out during that process and will take the massive loss and buy back with the remaining capital way higher during the fomo spike. and that then is REAL fomo, not the kindergarten rallies we see here at the bottom still. From purely technical aspects, when bears get extinct, we see insane prices increases going on for days, even weeks in a row before retesting.

ETC example why market is in a bear trap.png

Lets examine that on the chart of ETC which is showing exactly what is going on in the correction and the entire market. We have a classic double checkmate situation here. We got both a triggered bear reversal and bull reversal bar. That means, both bulls and bears are trapped between red and green line. stop levels for their positions is at dark red, either side.

What else is that when not a disagreement of traders debating whether or not the current altcoin rally is true? There are many different opinions in the market, but the truth is, nobody knows how this story ends. Everybody trying to assess using their very best knowledge which is the accumulation of experiences of a lifetime.

So both the bull and bear camps have positioned themselves for the showdown. both signals are valid, the bear reversal is strong and on high volume, however little tail on bottom, indicating bulls already bought into the close of the bar. The bear reversal got triggered on the very next bar, which means sellers are officially in the market now, and try to add on positions when the price is rising a bit. Those bears speculating on a “bubble” think prices might return to lower prices, so they can accumulate more there. However the next bar dumped deep, right into previous High support, but immediately reversed to the upside and closed as a strong bull reversal. This entry bar got triggered at the very next bar, which means buyers have found the way into the market again.

So checkmate, the next move decides the fortune of that rally. Who’s camp get stopped out first while have a bad bad time. Both dark red lines are in the market, clearly visible for everyone, which means that there will be shorters below, and buyers above.

So wait, we have to equal signals, how do we distinguish the good from the bad move?

As we have two signals we will look more into price action, which is the analysis of bar to bar, one after another, to get a feeling for the overall market. Combine that with a sense of empathy and technical analysis and you have an impressive skillset in your hands. Feeling is a substantial part of my analysis. I am one of the rare people in this world who have the joy to spend such insane amount of hours in this space, i follow all charts without any breaks for three years. It is a story that you follow, a little word every day until you can read a whole chapter, the whole book.

Here again the picture so we dont have to scroll up.

ETC example why market is in a bear trap

Lets compare the two signals. Because we want to analyze a potential edge here which gives us an indication of what is more likely to happen. The bear reversal was strong, on high volume, but had a little tail on bottom. The bull reversal was also a strong breakout, but the body is slightly bigger than that of the bear bar, also it has no tail on top at all. So to me, the bull signal is slightly stronger.  But there are more factors:

First off all the bull momentum is way stronger as we had several breakouts during last days, first small ones, then getting bigger any time. It is hard to stop a bull trend when it has finally manifested in the market for everybody to see. Likely scenario, which would be my best guess in that situation, is that bulls will be slowly taking over control, especially with rising BTC again, which drags the USD value of alts with it. That means prices will slowly close higher until many of the positioned bears will give up on their positions which leads to a chain reaction and eventually strong up spike.

Also it can be possible we see another retest of support, trying to push out more weak hand bulls who are tempted to cut losses. For both camps, both bull and bear, its a test of belief. Are they panic-closing their positions when they are in red (shorters) or are they rather relaxed because they know the upside momentum is way stronger and buy support is thick below, as we have established a healthy uptrend on daily (holders)?

Well how the situation continues remains to be seen, exciting times for sure. Upside potential for all alts (this ETC chart is a reference to most of the altcoins, as the market feeling is the same) is huge. When we reach either side of the dark red stop loss levels, the things become interesting. For now from my side, thumbs up, market is in good condition, mostly have retested previous Highs in daily. Trend is intact, I expect acceleration of trend in the next days and weeks as soon as Alts have recovered from the “surprising” BTC drop.

total mkt cap zoom 1m.png

Different chart, same situation. This is Total Market Cap. Sellers and Buyers in squeeze zone, the next High decides the fate of the next days and weeks. Still time to do a lot of research about promising coins! Take some hours of time and really scan every market you can find, polo, bittrex, bitcoinwisdom, whatever. Look for undervalued coins with promising charts, collect these in a list. Then research every coin you have found and disregard if trash, take to the next round for quality picks. Sort out so you have some solid undervalued early coins to invest in, then accumulate. Time is still early, so it might be that these days and weeks are the very most important in our financial future. Refine your portfolio everyday, until the point when you are just happy with how it is, which never happens. Its a constant refinement, no static thing. But we will figure that out along the way, we have a lot of time left to speak about these things in the future.

For now keep on doing what you do, so will I. This week will be pretty exciting as some move has to occur. So all the best, speak to ya again soon,

yodatransparent

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