Market report

CALM BEFORE THE STORM?

London Block Exchange

12th February 2017

Maybe, maybe not. Remember we appear to still be in a downtrend.

CALM BEFORE THE STORM?

Maybe, maybe not. Remember we appear to still be in a downtrend.

The crypto markets escaped the weekend in a rather quiet style. After a fake breakout above the £6.1k ($8.5k) resistance last Friday afternoon, bitcoin finally tested the £6.5k ($9k) area on Saturday morning, but the attempt was a flop.

As the mother of cryptoassets flirted with £6.6k ($9.1k) and failed to break through, bulls lost trust, and bitcoin started declining until it hit £5.6k ($7.8k). This was formerly a level of resistance that became a level of support - a common event in equities and forex markets.

As we write this report, it's back at the £6.1k ($8.5k) level, which shows how important it is to move slowly and not trying to chase green candles. It's safer to wait for a trend to become confirmed instead of trying to outsmart other investors.

Taking a step back, since last Wednesday, bitcoin and the majority of alternative cryptoassets have been trading sideways, showing some bullish signs such as making higher highs and dipping to higher lows but the market still hasn't left its rather long downtrend.

Some traders still believe that bitcoin will test the bottom of its 2017 log channel again, which lies around £5k ($7k). If the stock market sell off continues that could be a possibility. If not, look for the £6.5k ($9k) and £7.2k ($10k) resistances it's make or break time!

TAKE ADVANTAGE OF THE VOLATILITY!

These market swings exist because large holders are not hodling!

Even if trading sideways within a narrow range, the crypto markets continue to have significant volatility and this is what makes them so interesting. A traditional hedge fund manager even said that they trade crypto to keep [their] skills sharp.

Such opportunities are used by whales a terminology used for large holders of cryptoassets to play the market swings and accumulate more coins. According to this very analysis of the top 100 bitcoin whales, however, they are not hodling!

On the subject of volatility did you know that Jay Clayton, the SEC Chairman, noted during last week's Senate hearing that other securities can be far more volatile than bitcoin? The example used was the VIX index, a product that tracks stock markets volatility, which just had wild 100% swings!

WHAT TO LOOK OUT FOR

Filter the noise and stay ahead of the pack

To better understand these volatile markets, look into how the dot com bubble showed how the market isn't very good at valuing early stage technology!

To better profit from these impatient markets, dive into the fundamentals behind the projects to evaluate cryptoassets. Here's some evaluation framework!

To better gauge these anxious markets, meet the people creating the technology behind the assets. Stellar will have a meet-up in London tomorrow at 18:00 GMT!

WHAT TO READ TODAY

An insight a day could give you more profits to play

Andreessen Horowitz, a major VC firm that has invested in the space for four years, has just shared an excellent and exhaustive compilation of crypto reading resources!

Brave New Coin, another go-to source for crypto insights, has just launched a new (much needed) global classification standard for cryptoassets!

MyCrypto, the new spin-off /rebranding of the popular MyEtherWallet website, has clarified last Friday's events! All seems safe and MEW will continue to run.

  • Cryptoassets
  • Stellar
  • Brave New Coin
  • Candles