Market report

THE WAITING GAME

London Block Exchange

2nd February 2017

Three simple tips to utilise when everyone is panic selling.

THE WAITING GAME

Three simple tips to utilise when everyone is panic selling.

Bitcoin is the sun of cryptoassets and all their children feel its weight. Even ether — which seemed to be defying bitcoin’s gravitational pull — has now tumbled 18% to £660 ($950).

Warren Buffet used to say that “the market is a device for transferring money from the impatient to the patient”. This is a good observation, but for it to be useful for traders, they must not lose all their funds through their decisions.

The waiting game is difficult and today is the first since the circulation of our newsletter that 99 out of the top 100 cryptoassets are in the red (and tether is not the one in the green). The lucky project is DigixDAO, a gold-backed token!

We will continue sharing tips that might help you get through these hard times. Today is not about our timeless advice that knowledge is the best way to navigate a storm — today is all about psychology. You can’t be the skipper if you’re nervous!

If you don’t have Warren Buffet’s patience (or funds) you can at least have peace of mind. Even though the below strategies might come at a cost of less stellar returns when the markets go wild, no one goes broke taking profits!

Firstly, use stop-losses so you are never caught off-guard. Secondly, define your targets before making a short to medium-term trade or a long-term investment and be sure to close your position at that point. Finally, create your rules and stick to them — or else you’re just gambling!

WHAT IF WE HAD A CRYSTAL BALL?

Bitcoin is heading down, but will it drop below £5k ($7k)?

No one has a crystal ball, but let’s try to look at the possible scenarios over the weekend — a time where markets have traditionally experienced the largest dips. This was the case during the worst crash of 2017 where, on July 16th, bitcoin fell 40% from its previous all-time high.

As we write this report, bitcoin’s price is £6k ($8.6k) on Bitfinex, the exchange with the highest trading volume — representing a 56% retrace from its all-time high of £14k ($19.9k). Looking at the daily chart, it seems we are close to the bottom.

As we said before, it’s impossible to actually call the lowest point, but you can look at the amount of people looking to short bitcoin after a month of downtrend as an indicator of greediness and of a possible short-squeeze that will mark the reversal!

Remember, however, that people can use charts to ‘confirm’ any conclusion they’d like. The more relaxed chart readers draw beautiful ‘stegosaurus formations’, while the bearish ones see £2.8k ($4k) as a real possibility. Last July, many felt cheap bitcoin was here to stay — but will this dip also be a missed opportunity at these ‘low’ prices?

WHAT TO LOOK OUT FOR

Filter the noise and stay ahead of the pack

The European Commission just launched the EU Blockchain Observatory, with a fund that can go up to £300 million. Read all about it here!

The Indian government created some panic yesterday but few feel it was responsible for the dip. Here’s an overview of the media misinterpretation.

The most famous bitcoin puzzle of the past three years has just been solved — and the genius that solved it won 5 bitcoins as a reward! Here’s the best overview we found!

WHAT TO READ TODAY

An insight a day could give you more profits to play

ICOs were clearly back over January, with many new investors clambering for the potential quick 10x returns. Wired tells us why that won’t last long!

Many media outlets love to say bitcoin is dead, but the free Alphaville blog of the Financial Times believes ‘nobody puts bitcoin in the corner’. Great read!

Some are afraid censorship could wreck havoc in blockchain-based databases, but radio-based blockchain technology could overcome it!

  • Bitcoin
  • Warren Buffet
  • DAO
  • Blockchain
  • ICO