Market report


London Block Exchange

10th May 2018

Everyone is talking about technical analysis but few know how to do it


Everyone is talking about technical analysis but few know how to do it

As crypto markets continue to go crabwise despite recovering from the 6% lost two days ago, let's delve into one of the common obsessions in this space - Technical Analysis. The first thing to note is that TA doesn't provide a significant edge to traders - only risk management and discipline on emotional control. Some say that the space is ripe with fallacies such as the common misconception that if a cryptoasset is printing "higher highs, then that leads to higher prices" and vice-versa.

In short, FOMO buyers will always meet aggressive shorters, i.e. investors who bet against the appreciation of what is being bought. Contrary to popular belief, TA is not about trying to forecast future prices, it's about finding "asymmetrical reward to risk set ups" based on possibilities rather than probabilities. One can then decide to trade or not based on their risk profile. 

This is a great quick cheat sheet summarising this craft. Remember that "more often than not, markets will defy whatever TA approach is being used", and note TA worked in traditional markets until algorithmic trading caught on. For now, it's proving to work quite well across all time-frames in crypto markets but it might only last as long as crypto traders continue to blindly follow their emotions. To avoid falling into more traps, can you answer this question by the reputable chartist and trader, Peter L Brandt? If you don't have an answer, we recommend reading and acting on this!


Crypto markets are moving away from its infancy phase

Michael Novogratz is a seasoned crypto investor. After making a substantial bet on Ethereum back in 2015 and buying around £370k ($500k) of ether, for less than a dollar,  the former Goldman Sachs partner became hooked on cryptoassets. 

Earlier this year, Novogratz announced he was building Galaxy Digital, a digital assets "merchant bank" aiming to become "the Goldman Sachs of crypto". Yesterday he announced Galaxy's partnership with Bloomberg to launch the "Bloomberg Galaxy Crypto Index", which will track the ten most significant and liquid cryptoassets. Bitcoin and ether each represent 30% of the index, which will update its weightings monthly

The herd is on the move, was said. It seems the race to the moon wasn't sufficiently interesting for institutional investors, so we hope they are enticed enough aiming at a new galaxy to perhaps land on mars. This is key as even though some institutional investors are exposed to cryptoassets since 2015, access to such funds is scarce and there are a few alternatives for those who aren't brave enough to short bitcoin futures on CBOE or CME's bitcoin futures.


Filter the noise and stay ahead of the pack

▪ EOS is launching the latest version of its EOSIO decentralised application platform - Dawn 4.0 - tomorrow, May 11th. The full launch of EOSIO 1.0 will take place this June.

▪ EOS is transferring copious amounts of ether over the past month from their known wallet addresses - roughly £710 ($960) million - 15% of it to Bitfinex. Dump incoming?

▪ Casper FFG, the future consensus protocol for Ethereum's platform, is coming to life. Its first release was published and details of its economics structure can be found here.


An insight a day could give you more profits to play

▪ How many people actually own cryptocurrency? According to the latest cryptoasset adoption survey, 7% out of the 29,492 'internet-connected respondents' own some.

▪ How much have Iranian citizens invested in cryptocurrency? According to the Economic Commission of the Parliament of Iran, "more than £1.8 ($2.5) billion".

▪ How much have ICOs raised in April? According to ICO Data, practically half as in March and less than 40% as in January. Perhaps too much ether invested into fake teams?

  • BTC
  • bitcoin
  • technical analysis
  • peter l brandt
  • fomo
  • goldman sachs
  • novogratz
  • galaxy digital
  • CBOE
  • CME
  • EOS
  • ICO