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Horrible Mistakes You’re Making With Crypto Trading

When it comes to crypto trading, there are a number of mistakes that all of us are making. Some mistakes are okay, as they don’t really affect our accounts or our emotions, others though can be horrible, so bad that they have a massive effect on pretty much everything that we do. Let’s take a look at some of the horrible mistakes that we see happening quite a lot and what we can do to try and avoid them in the future.

Trading the Same As Forex

Crypto trading looks very similar to regular forex trading, in fact, it uses the same trading platforms and the same charts, from the outside it looks pretty much the same. In reality, the way that it works is very different, but a lot of people fall into the trap of trading crypto the same way that they do with forex. There are some fundamental differences to them, firstly the amount of money being traded is a lot lower, so the markets are a lot more volatile, the markets are also not quite as open as you would think when it comes to crypto.

In the forex world, a single trader can’t make much of a difference, but when it comes to trading, a single trade can cause the markets to shift. The markets are controlled by the people rather than the markets controlling them, so the price is all based on what people want it to be. There are also much larger movements, both up and down, making it far riskier, so you need to ensure that you understand it before you trade. You cannot use the same tactics with crypto trading as you do with forex trading.

Trading Too Much

The trade sizes when it comes to crypto trading vary a lot, 1 lot does not always mean 1 coin. For some it does, things like bitcoin, a 1 lot trade may be trading 1 bitcoin, but if you trade XRP, 1 lot may mean 100 XRP, this can drastically affect your trading. You need to understand how much it is that you are going to be trading. Due to this, many crypto traders start out trading far too much. One major issue with placing trades that are too big is the volatility that comes with crypto trading. The markets are a lot more, so when you have a large trade, one that is too big for your account, as soon as the markets shift the wrong way and they can shift a lot, your account will be in trouble.

Not Watching the News

The crypto markets can be heavily influenced by news about the coin that you are trading or even a coin that you are not. Things like a big business taking up a currency into their service, or a country banning crypto can have a huge effect on the markets. You need to keep an eye on what is going on in the crypto world, if you do not, you may get caught out as you are treading a coin that has just been banned and the price will drop, but you won’t know that and you will only be greeted by the aftermath of a potentially blown account. There are a lot of sites out there that are quick to get the news up, use them regularly, even if it is just when you are on the toilet, as long as you are keeping up to date, you will be better protected from any sudden movements due to news events.

Not Using Risk Management

Risk Management is a key part of forex trading and it is also a key part of crypto trading, if you are trading without any form of risk management then you are asking for your account to blow. It is far riskier to trade crypto without a risk plan than it is forex too. The markets move so much that a single trade could very quickly blow and account if there aren’t things like stop losses in place, it is also vital that you understand how much you’re trading, as we mentioned above, different trade sizes mean different things depending on the coin that you are using. Risk management is key to keeping your account alive, yet so many people are convinced that a coin will go up that they trade without one, only to find the price drop and they lose quite a lot of money in the process. Always use risk management, no matter how sure you are of a trade, as nothing is guaranteed.

Trading With A Small Account Balance

One of the things that make trading so accessible is the fact that many brokers are now allowing you to trade with as little as $10. That is great but it does come with its own problems, if you want to trade successfully then you need a lot more money, in fact with some brokers a $10 account will allow you to place a single 0.01 lot trade on bitcoin, but as soon as the market moves down, even a few pips, the account will blow. You need a lot more to trade well on crypto than you do forex simply because the markets move a lot and the amount that you are trading is a lot higher, especially as you do not get as much leverage when it comes to crypto trading. So if you want to start, start with at least a few hundred, not the minimum that any broker will allow you to open an account with.

Putting All Your Eggs In One Basket

This is a phrase that you probably heard before, that you should not put all of your eggs into one basket. This basically means two things here, firstly that you should not put your entire balance into a single trade, and that you should not only trade single crypto coins. If we look at the latter, there are a lot of coins available, many of the crypto-focused brokers are now offering 30+ different crypto coins to trade, so there is a lot of variety. It is recommended that you do not trade only one, you need to diversify. Trading only one means that you are tied to its performance, if it is not doing well, neither will you, but if you diversify, even if one does not do well, others might, which will mean that you will negate any losses from the first coin. Try and trade more than one, but not too many for it to overwhelm you.

Those Are some of the horrible mistakes that we see a lot of crypto traders doing, the good thing is that most of them are very easily rectified by making a change to your trading plan or by simply changing your view of things. We all make mistakes when it comes to trading and we will continue to do so, what is important for us and the development of our trading is that we are able to recognise those mistakes and to learn from them, to adapt so that in the future we can do better and be a much more profitable trader overall.

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Crypto Crypto Education

How to Get Better Results Out of Your Crypto Trading

Something that we all look for in our trading is ways to improve, ways for us to become more successful and more profitable. The good news is that there are countless things that we can do that can help to improve our overall trading results. Some of them can be pretty big changes, others can be relatively small, whatever it is, making these changes can really help improve our trading. So let’s take a look at some of the things that we can do to help us get better results out of our crypto trading.

Manage Your Risks

Risks are a central point when it comes to any form of trading and this is particularly true when it comes to crypto trading, based on the fact that the risks can be so big. Because of this, we need to ensure that we are managing them correctly. It is a little more complicated for crypto than it is for forex due to the fact that each coin acts and trades very differently. Different coins have different values per lot size, so you need to work those out. However, despite the differences, the way that we manage the risks is very similar.

We need to ensure that we have a risk management plan in the palace, things like a risk to reward ratio which dictates how much we are risking and how much we are trying to make. This will also tell us where we will put our stop losses, and of course, we will be using stop losses with every single trade that we make. We will control our lot sizes and the number of trades that we make and will keep our trading in line with the rules that we set up in our plans. Doing all of that will help us to control our risks and ultimately help us to get better and more consistent results from our crypto trading.

Diversify Your Trading

When it comes to trading, we will certainly have our favourite assets to trade, some will love Bitcoin, others Ethereum, and others something completely different. While it is good to have a favourite, a coin that we really like to trade, it is still important to diversify, to trade more than just the one. The main reason behind this is that it helps to reduce our risks, it helps us to ensure that we can remain profitable even when one of our trades is going the wrong way. A lot of the coins go the same way, when Bitcoin goes up, so do they, but some do not follow this same path. These are the ones to add, so even if Bitcoin were to go down, those coins may not, meaning that you can cover any potential losses from Bitcoin with the other coins. Of course, it is slightly more complicated than that, but it certainly helps and certainly works when done right.

Jot It Down

Do you have a trading journal? If not then why not? You need to get yourself one, these journals are a godsend and can really help you to up your overall game. In it you will be writing down everything that you are doing, from the entry position, the exit position, the time it is open, sizes, analysis is done, and more, it will be your source of information on what you have done and why. You can then use that information to help you to analyse your own trading, you can see what you are doing well, what you need to improve on, and whether or not your trades have been in line with your trading strategy. If you don’t have one yet, set one up, it only takes a minute or two to fill in with each trade and the results that it can help you achieve will more than makeup for the additional time that you are putting in.

Trade

For many people, the thing that is holding him back is not actually trading, as strange as it may seem, for many traders, actually placing the rads is the first issue that they will come across. Not all of us like risk, some of us are very risk-averse and get nervous and anxious every time there is any sort of risk involved. Due to this, some traders end up placing very few trades. When you find yourself in this situation you will also find that your profits start to suffer too. In order to get past this, you will need to kind of force yourself to place those trades, remind yourself that they are in line with your strategy and plan, the risk is being managed and that you won’t make anything if you do not place the trades. It can be hard to get past this stage, but if you manage to do it, you will eventually get used to the risks that are involved in your strategy and it will slowly become a lot easier to palace the trades on a more regular basis.

Continue to Learn

Learning is the cornerstone of trading, you can always find things to learn and you will never know everything. You can know pretty much everything that there is to know about your strategy, but as you continue to learn about other things, you will soon come to realise that there is actually a lot more than you can do with your existing strategy. In fact, some of the things that you learn you will then be able to implement into your current strategy even though you originally thought that there was nothing in relation at all This shows why it is so important to never rest when it comes to learning, always look for more to learn and you will be constantly improving on your trading.

Those are just some of the things that you can do as a trader which can help to improve your overall results. Some of them are quite simple and quick to do, others can take a long time, your entire career in fact. What is important is that you are constant;y looking for ways to improve, even the smallest change can make a big difference in the long run.

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Crypto Crypto Education

Unbiased Facts about Crypto Trading Part 4: Crypto Outlook

These are some of the topics we’ve covered in this series, focusing on cryptocurrencies, changes that have already taken place, and opportunities for you to be ready ahead of time. The crypto world is in the spotlight these days and we want to know what we can expect in the new year. Actually, the crypto market has been getting increased attention for quite some time now. In the past few years, we have seen a rise in investment professionals’ interest in cryptocurrencies. We now have central bank digital currencies and institutional investment vehicles for crypto as well.

In the near future, we could also see some big companies buy much bitcoin. Square invested 1% of its total assets to get 50 million USD worth of bitcoin; Grayscale reported impressive inflows towards the end of 2020; and, even some affluent figures such as Paul Tudor Jones trusted bitcoin to fight against inflation in the past year. Last year also closed with unprecedented events, leaving the crypto community with renewed hope and more questions on the future of money.

At the end of 2020, with cryptocurrencies soaring to new heights and receiving more investor attention than ever before, the largest cryptocurrency exchange in the US – Coinbase – announced its plans to go public. Recognizing cryptocurrencies’ long-term potential, Coinbase strived to provide investors with safe, easy, and regulated access to bitcoin from the very beginning. The significance of the company’s expansion plans also lies in their ability to show us whether there is any interest in something like this. Based on this transition, which also attracted increased media coverage, 2021 could bring other companies towards achieving similar goals. Having private investors and venture capitalists recognize Coinbase’s high growth potential and providing funds for its development could also signify an opportunity for the public market to value the company as well. The dynamics should render both Coinbase and its investors flushed with cash that could also be eventually reinvested smartly in 2021.  

Many people wonder if the impressive 2020 rise of bitcoin, as a global network and financial system, is going to drive an even greater spike in the market. With over trillion USD market cap public companies, gold amounting to a similar height, real estate soaring trillions upon trillion, and derivatives market equally thriving, among others, bitcoin may as well join the club at some point this year. We are still hundreds of percent away from this goal, which is why we may anticipate some expected volatility in the upcoming period.

Central bank digital currencies (CBDCs), along with the accompanying technology, comprise another important topic for 2021. As we discussed in the previous article of this series, the US Federal Reserve mainly talked about its discoveries, apparently without really putting its foot down and making any lasting commitment. Still, there may be more happening under the surface than we can see at the moment. The question of regulations comes up as the first step in trying to see how Americans can even start to rely on the Digital Dollar. 

The US central bank seems to prefer to take things slow, being cautious about its next step. However, some other central banks (e.g. China) are already testing and preparing to release their CBDCs for the public. Any information disclosed regarding these events can certainly be of use to the rest of the world, but we should also understand that central banks generally refrain from sharing everything before any product is completely ready to launch. People’s reactions always pose a concern in the early stages and any misinterpretation, especially in the loud crypto community, could just hinder the process, affect safety levels, and make things more difficult for the central banks. 

In terms of blockchain, experts claim how we can always find a new use, and 2021 may be an interesting year for investable assets too. We can expect to see more discussion on immunity passports this year as well as how to track the vaccinated population and regulate their movement geographically. Interestingly enough, a decade ago, it was predicted that tokenization would be a major theme for the following 10 years, covering an array of assets from the things people own to digital money and identification as well. We have entrusted more of our information to the digital sphere than ever before, allowing our personal identification, such as medical records, to be more trackable. In the past few years, we have seen numerous nations become more open to microchip implants, happening concurrently with an elevated desire to preserve privacy. This is where blockchain comes in handy, giving you the option of sharing personal information (e.g. vaccination) only with the chosen group of people and institutions. Blockchain has the potential to draw the line between what should be shared in public databases and what should not be as transparent to greater audiences, which we can expect to see more of in 2021 and the upcoming years as well.

With all this information and ongoing events and changes, new market entrants may find it increasingly difficult to distinguish what is relevant and helpful. For these reasons, novice crypto traders should consider investing small amounts of money, professionals advise. Start trading with as little as 100—500 USD and take the learning stage seriously as if you had a much larger starting sum. After you commit to getting a small amount of bitcoin or ethereum, among others, choose an exchange such as Coinbase, Binance.US, or Kraken and seek help from them if you need it. The interest in crypto trading is definitely on the rise, which may propel these companies to establish a more user-friendly and supportive service. The post-pandemic surely supports the work from home concept and the crypto market, as we can see from the chart below, is leaving much room for more individuals to join.

While we are all impressed with the events that are taking place as you read these lines, we also need to be mindful of the impact of news events and possible market volatility. Make sure that you are taking every possible precaution as we described in the first article of the series and strive to make smart, not fast, money. Also, as we are seeing developments in other trading markets as well, diversifying trading skills and expanding to other markets could be a rewarding and intelligent move in 2021 as well. Digital currencies are certainly not going away; as a matter of fact, some finance connoisseurs predict that digital currencies will become as important as PCs or cellphones with time. It is only expected that 2021 is likely to bring more news on the long-term changes we are going to see in terms of technologies inherent in cryptocurrencies and related regulations on the national level, as we talked about last time. While cryptocurrencies are slowly but surely increasing their footprint on the global financial system, individuals should take their portion of responsibility to ensure safe trading and maintain the right attitude. 

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Crypto Crypto Education

Unbiased Facts about Crypto Trading Part 3: Will Crypto Replace the USD as the Global Reserve Currency?

The USD is losing its privileged status, many say. Others believe that it will never go away. Still, different financial books describe how the reserve status impacts reserve currencies, such as the USD, with time. The problem with these safe-haven currencies is that their issuing countries can borrow and spend as they please without facing an immediate backlash that other non-reserve nations would in a similar scenario. Decades of reckless spending and management may lead to severe consequences, rendering the reserve currency nations indebted and abandoned by the rest of the world. The loss of trust in one reserve currency’s creditworthiness inevitably leads to another currency acquiring this status. 

And, in the past few years, we have seen extensive attempts to reduce the dependence on the USD. Aside from the United States’ 27.45 trillion national debt, the worldwide frustration with the USD’s global monopoly has reached its peak. The US foreign policy, in particular, seems to raise concern in other nations, with Russia and China being the most vocal opponents to the US meddling in international trade. The US claim to its jurisdictional authority over any transactions settled in and out of its territory also drew the attention of the European Union, especially after the US took severe measures to control European banks’ and companies’ activities even though they abide by the local laws. 

Reserve currencies are believed to enjoy this privileged status for a period of approximately 80—100 years. As the USD has served as the global reserve currency since WWII, its rule may just be over soon. Many believed that the USD would lose its influence after the Bretton Woods agreement, which promised that the US would avoid trade wars, fell through in the 1970s. The new petrodollar system ensued and world oil exporters agreed to settle their exports in the USD and invest their profits in US Treasury bonds. While petrodollars helped the US maintain its dominance for more than half a century, the global oil trade dynamics are changing and a question mark hangs over the future of the USD once again.

These changes are already visible. China has begun trading a crude oil futures contract priced in the JPY instead of the previously used US dollars. And, if the USD has been replaced like this, imagine how much room there is for a cryptocurrency to take over. Naturally, it would be highly impractical to settle international trade or keep central banks’ assets denominated in all world currencies, which is why reserve currencies are not only useful but necessary as well. Throughout history, the world simply found it easier to pick one currency they could trust the most to serve as the global reserve currency, not because they necessarily wanted to have to trust another government. 

So far, reserve currencies have been chosen based on the strongest credit and military. However, after the distributed ledger has been invented (which we talked about in the previous article of this series), the world has a system that can scale to meet the needs of the global economy without having to trust any single nation to take charge. With the digital currency system, there is no need for having a reserve currency as we know them.

The world is still immersed in which cryptocurrency ranks better, while the role of the new reserve currency is there for the taking. The only requirement would be for different central banks to agree on using the distributed ledger system, thus limiting the power of any single government. The US, however, may not take these changes lightly because they would directly interfere with its foreign policy and affect its global position. The rest of the world would, needless to say, welcome the use of the new system with open arms. The possibility of adopting this new system also raises additional questions; for example, will the changes involve different countries building in features that could benefit them individually? 

While many predict that bitcoin is going to take the role of the new global reserve currency, we mustn’t forget that it was solely created as means to settle private financial transactions without having to deal with law enforcement. Nonetheless, it is a rather far-fetched idea that governments, which are tasked with overlooking and regulating any financial transactions, are going to let go of this power so easily. The truth is, governments still have a say and will hardly opt for bitcoin or any other cryptocurrency to replace the existing monetary system just yet. We may, however, expect to witness the enactment of some stringent laws that would limit or completely prohibit cryptocurrencies. While governments may find it hard to silence the crypto community, they are far from powerless to impose any regulations that would help their cause of maintaining power.

Central banks across the globe seem to have already recognized the potential gain of the crypto world, as they issued CBDCs – central bank digital currency, a blockchain-based variant of current currencies such as the USD. Interestingly enough, in the United States, a future CBDC is commonly referred to as a Digital Dollar. While the US Federal Reserve has only recently started to openly communicate their years’ long CBDC research findings, the information shared in the past year commonly points towards the digital currency’s benefits – increasing efficiency and transparency and reducing illegal activity.

Big US companies, such as Facebook, also seem to be seeing the benefits of engineering their own cryptocurrency and, considering their impact on the global scale, we can expect to see some interesting long-term ramifications. Re-engineering money may become one of the strongest pursuits of the financial industry, and the USD’s current struggles may just shove it aside even more.

Yes, the US witnessed some unprecedented moments concerning its official currency in the previous year. Interestingly enough, 21% of all USD (M2) was printed in 2020 alone. This impressive surge in the USD stems from the US government’s freedom to print more money to help its economy. The entire conundrum began in March last year with liquidity issues sparked by the Russia—Saudi Arabia oil price war. Upon the breakout of the COVID-19 pandemic, economies and global trade found themselves at a complete standstill. 

Credit to Katusa Research

While the US was not alone in this money-printing craze, the USD is facing quite a few challenges at the moment. We are currently seeing the USD at the largest short position since 2014, which only means that investors are betting against the currency at record levels. The net positioning of non-commercials presented in the chart below reveals how the wall of shorts piled up all year long, weakening the USD and leaving room for real assets to soar. Gold and silver markets also saw unbelievable spikes in 2020, along with bitcoin that continues to impress traders even in January of 2021, making the USD rather pale in comparison.

Still, should we give up on the USD? Well, the USD continues to dominate as a global trade payment currency, with a 79.5% inter-regional currency usage share. Despite the past year’s scenario, the USD maintained its global importance. And, if all currencies happen to go down, the USD still seems to be the best choice to hold on to. 

Since even the FED admitted to having been testing the CFDC for years now, we may just relax for now and trade as we did so far. The onset of a new monetary era is there, yet more time should pass before we can all start to see any major changes in our everyday lives, which is why we are better off polishing our crypto trading skills and diversifying our coins’ spectrum as we explained in the first article of this series.

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Crypto Crypto Education

Unbiased Facts about Crypto Trading Part 2: Death of Bitcoin or Birth of a New World?

Digital currencies will change the world we live in so profoundly that everyone will be taken by surprise. Yes, it is true and it is already happening. Some are convinced that precisely this year, 2021, is going to force these changes that we have been hearing about lately.  Bitcoin is already believed to be a thing of the past, technologically. With bitcoin skyrocketing these days, it is almost impossible to believe the things you are reading, but just bear with us and maybe discover a different perspective you have never seen elsewhere before. It is just the fundamental analysis we need for long-term investing.

As the ground-breaking precursor to many new coins, Bitcoin served to show the path, to pave the way for innovative tokens, opening our eyes to a whole new world of possibilities. It was a breakthrough invention that changed the world, like the first cell phone or the first TV. Still, it is important to distinguish between a predecessor and emerging inventions because we all long replaced our brick cell phones with devices that can meet our present needs.

When Bitcoin first appeared, it was a true revolution in many different ways. We finally had a new technology and decentralized digital currencies, and such an information technology breakthrough mustn’t be understated. The invention we now know under the name of decentralized distributed ledger eliminated the need for a centralized body or intermediary, like banks, to process or validate transactions. Blockchain technology is thus as important to the world as the first car, having changed the options available and the way different processes are managed.

When we think of the software industry, we know how new generations upgrade their original versions. We can painfully recall the first version of Microsoft Windows 1.0, acknowledging and appreciating all the ways computing has changed since its debut. The thing with each new invention is that its purpose is to see if this item is going to work at all. Only after this point, engineers and concept designers can actually make changes to fix any bugs and enhance performance, launching newer and improved versions each time. 

Bitcoin inventors faced a much greater hurdle than building a graphical user interface, but the accompanying first version quality challenges remained more or less the same. Their first product, blockchain, immediately drew the attention of people and institutions all across the world, but the product’s quality is still questionable. 

To understand these matters properly, it is crucial to differentiate between the bitcoin cryptocurrency and blockchain technology. Blockchain, the first version of a decentralized distributed ledger, is a historically significant invention that has brought about unprecedented changes to all of us. However, and this is the main point, blockchain, as we know it is still version one, just like Microsoft Windows 1.0, was. Unfortunately, blockchain technology resides on a highly inefficient algorithm – proof of work (PoW), which we mentioned in the previous article when we talked about the way to secure extra income with crypto. Due to its imperfections and lacks, blockchain’s performance is far less than what it should be now, 12 years after its creation. 

What these concerns aim to point out is that we need a more sophisticated version of a decentralized distributed ledger that compensates for blockchain’s limitations. We still want to keep the essential functions of blockchain, yet we need faster and more efficient performance. To do so, the current PoW design that serves to keep the network safe needs to be replaced.

Staking, or mining, that we discussed in the first series of these articles on cryptocurrencies, may be an excellent way for traders to earn a few extra coins, but the system’s need for it to work only demonstrates a serious downside. The problem we are presented with here is why we need this feature in the first place to grant security to the system. Thankfully, we have seen some successful attempts to break this barrier in the recent past. 

A new distributed ledger – permissioned distributed ledger, which is used by XRP cryptocurrency, is able to process 10 times more transactions per second than any blockchain-based cryptocurrency. What it lacks however is the means to bypass the need for a central authority because the crypto community essentially needs a mechanism that will bypass the involvement of banks. That is why even this improved version of this technology is insufficient to meet the needs of crypto traders. 

The only reason why blockchain is still used lies in the fact that no one has managed to come up with a better, more efficient solution that will satisfy the basic requirements and speed up the process at the same time. However, in the past few years, we have been seeing different companies advertise their products that have supposedly managed to meet these requirements and overcome challenges inherent to the blockchain. A fully decentralized permissionless distributed ledger finally leaves room for engineering scalable digital currency systems that have the real potential to become, or even replace, major currencies in the global financial system one day.  

Blockchain-based cryptocurrency systems could never be apt at achieving this, but we finally have the stage ready for digital currencies to compete with conventional currencies on the global level. While this indicates global progression towards new systems and ways of operating and existing, it also poses a serious threat to blockchain technology and currencies such as bitcoin.

Are cryptocurrencies as we know them going to disappear? Well – not anytime soon. However, it is reasonable to assume that their importance is going to diminish slowly with time. In the next article of this series, we are going right into the lion’s den to see where digital currencies stand in comparison to the global financial system and what will happen with fiat currencies in the near future. Stay tuned. 

P.S. If you want to learn what you can do now to still make money in the crypto market, check out the previous article where we discussed how to make smart money trading crypto now. 

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Unbiased Facts about Crypto Trading Part 1: Making Smart Money Trading Crypto

Bitcoin will do to the banks what email did to the postal industry, said Rick Falkvinge. Yes, we are certainly seeing gigantic moves in the cryptocurrency market these days. As we are waiting for Facebook to launch its long-awaited Libra (now Diem) digital currency, Bitcoin is skyrocketing like never before. Currency revolution is heavily speculated and we all want to see what’s behind the facade. Where is the crypto market headed in the long run and what impact is it going to have on the world? What’s the big picture and how can we ride this massive wave that is happening as you read these words? Stay tuned as we start a series of articles on crypto trading, providing objective facts and key advice that you can immediately apply in trading.

They say it is not important when you enter the market as long as you forever maintain the buy-and-hold mindset. What we don’t want is instant gratification compulsion, especially now when the market is moving erratically. Money management and trading psychology will prevent you from interfering with your trades, collecting profit prematurely, and taking major losses. If you are new to crypto trading, following these essential tips will make a significant difference in the short and long term. In this market, the upside is extraordinary, while the downside is limited. Therefore, let’s see what steps you can take to make the most of it.

Luckily, we can now go both long and short and crypto already has an inherent upside that we can benefit from immediately. We need to see if we are in a buyer’s or seller’s market and determine where we can make the most profit. Still – and this is imperative now more than ever before – we can always make a mistake in our estimations. That is why we absolutely never go all in. And, equally importantly, we never give in to the market’s community hype, fortifying our sense of independence and self-reliance. The key is to make smart money and, to do so, the best strategy is to spread out. Diversify your coins and that way, even if something falls through, you will always be safe. This also means that you will not overleveraged and, thus, take a smaller (5-15%) fraction of the entire portfolio to hold crypto. 

Always come up with a plan and make sure you stick to it. Keep your anxiety and other emotions aside and set key points ahead. Determine your stop-loss and take-profit, and then move your stop-loss to break-even when it gets there if you want to scale out. Scaling in and cost averaging can be something you can apply but then you would need more attention and research. Rely solely on your system to tell you when the right time to make a move comes and do not deviate from the initial plan. Additionally, besides the daily chart, you can also use the weekly and the monthly ones for long-term trading. Just remember not to let the fear of missing out get the best of you, especially in the midst of this crypto craze.

Holding is used by the richest traders on the globe, who know how to allot their investments to reap benefits continuously. Allocate 70% of your finances to long-term buy and hold and 30% to your short, more aggressive trading strategy. Then, decide how you are going to spread out to ensure risk is reduced. For example, you can have the majority of investment in commodity stablecoins as a protection in case everything else falls apart. The second in line could be bitcoin or ETH or, preferably, both. Next, 5—20% could be distributed across different altcoins. Your final layer should be your longshots or the coins you use for your long-term strategy.

With crypto, we may not know exactly when the best time to start trading is. However, if you do feel that something is to go up, crypto’s upside and downside ratio allow you to invest your money more freely than in other markets. You can also use Trailing Buy, which helps us determine entry signals. To enter a new trade, move the trailing line down only if the price goes lower than it is right now (i.e. if it breaks down upon the candle close). When the price finally hits the trailing stop, you are getting the green light to buy.

Whether a trade renders great results or not, you need to set a defined exit strategy. Like in any other market, you need to align your exit point with your overall strategy; hence, your exit strategy is going to vary depending on the type of trade. You must maintain consistency and refrain from making any changes in the middle of a trade. As cryptocurrencies are great for holding, your exit will then be contingent upon your idea of how long that trade should last. As long as you have a projection of how far you want to go, you will know exactly where you want to take your money off.

Staking is an excellent way to make passive income in the crypto market while holding them at the same time. This strategy implies that you hold some coins (keep them in a crypto wallet) and, therefore, strengthen the network for which you get a reward in the form of extra tokens. While not all cryptocurrencies permit this, the Proof-of-Stake mechanism requires that certain coins’ new blocks be verified by staking after production. What is important is that you can earn additional income when the coin you hold increases in value. Some blockchains have predefined minimum and maximum staking periods that basically determine the span during which you can retrieve your coins. To avoid dealing with all these requirements, traders prefer to delegate their coins to a validator (traders who stake their coins) running a staking pool. It is, however, important to mention that validators lose a portion of their stake if they double-sign or attempt to attack the network.

Since crypto is known to multiply in value up and down in only one year, what we are witnessing right now should not come as a surprise. What you can, and must, do is ensure all possible protection to minimize losses and ride the big waves. Money management, trading psychology, and the right mindset are your strongest tools to combat any unpredictability and volatility, regardless of the positive aspects this market bears. Announcements and predictions generated in the crypto community often come with an excess of falsehood and unnecessary drama, so to avoid this, just try to the best of your abilities to keep a cool head and be smart about each move you make. As they say – haste makes waste. Don’t be another failed promise of success but rather invest intelligently – both your time and money.

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Crypto Cryptocurrencies

The Do’s and Don’ts of Successful Bitcoin Trading

When it comes to crypto trading, especially Bitcoin, there are a  number of things that you should be doing as well as things that you probably know you shouldn’t. We are looking at some of the do’s and the don’ts when it comes to bitcoin trading. Take a look and see how many of them you are doing, if you are doing some of the things you probably shouldn’t, it is not the end of the world, simply use this to help understand what you can do a  little differently to ultimately improve your bitcoin trading.

Do: Trade With A Strategy

It can be tempting to simply follow what other people are doing when it comes to trading bitcoin. There are a lot of people out there making a lot of money of fit, so there is no harm in just following them right? Well no, first they will certainly be trading with a strategy, secondly, you do not know what that strategy is and so blindly following trades is never a good idea in that situation. Also, you will not be getting the trades at the exact same time, so by the time you take the trade the optimum time may have already passed. So this is why you need a strategy, a strategy that outlines what you will be trading, when you will be trading and how you will be protecting your account. You should always trade with one and you should only put on trades that are properly in line with the strategy that you are using.

Don’t: Blindly Follow the Trades of Others

As mentioned above, you should not be blindly following other people’s trades, as tempting as it may seem. You need to remember that they have been doing this a long time, they have a strategy that they are following, they may even have information from sources that you do not know about, so blindly following their trade will basically mean that you are allowing them to trade for you, but with a delay. Even 10 minutes can mean a lot when you are placing a trade that long after they have put out the signal or that you have seen that they have traded. You also may not have the risk management in place that they do in case things go wrong, so their account may be safe from a drop, but yours is not. So only trade trades that you have found, not that you have funded posts somewhere on the internet.

Do: Use Risk Management

Risk Management is key when it comes to any form of trading and it is certainly the case for bitcoin too. You need to use it, things like a proper risk to reward ratio will enable you to remain profitable, things like stop losses need to be used with every single trade, no matter how sure you are that the trade that you are putting on will be successful, you need to use stop losses. They are there to protect your account and to enable you to remain profitable. If you do not use them, then a single trade could cause you to lose your entire account, something that you certainly do not want to do. So use stop losses, with every single trade, every single one of them.

Don’t: Trade Too Much

It can be very tempting to trade more when things are going well, especially when it is bitcoin due to the massive profit potential that it offers, but you need to be wary of this, you do not know what to overtrade. Overtrading is basically when you place more trades than you should. Overtrading can decrease your account’s margin, and when the margin gets too low, it will only take a small movement the wrong way for your account to blow and for your broker to close all of your trades in the negative. Only trade what you need to, do not get greedy, if you are being profitable, accept that, do not try to push too hard for more.

Do: Keep An Eye On the News

When you are trading bitcoin, it is very important that you keep an eye on the news that is going on around you. Bitcoin can be heavily influenced by the news, if a country decides to ban its use it can have a very strong and very quick drop, if a major company decides to start accepting it, it can have a huge spike upwards. You do not want to miss out on the opportunities that the news can present, but maybe more importantly, you do not want to get caught out by a huge drop, which even with stop losses in place, can cause an account to blow if the price jumps passed the stop loss. If you are going to trade bitcoin or any other form of cryptocurrency, then it is very important that you keep an eye on the news and know what is going on in the crypto world.

Don’t: Let Emotions Overtake You

It is very easy to let emotion take over, especially when there is money involved. This is no different for crypto and bitcoin trading. There is a lot of money to be made, the markets can move up and down a lot which can play havoc with your emotions, in fact, it can cause a lot of stress and anxiety. Things like anxiety can make you not want to trade at all, maybe this has come from a loss or consecutive losses. Then there are things like greed and overconfidence, these can make you start to place more trades, or larger trades, each of which will be putting your account under more and more pressure. If you feel that any form of emotion is starting to build up and that it has the potential to affect the trades that you are making, then you need to take a step back. Take a break, go out for a bit, clear your mind and then come back with a fresh view of the markets. Whatever you do, do not place a trade based on an emotion, it won’t end well.,

Those are some of the do’ and don’ts when it comes to bitcoin trading. There are of course many other things that you should or shouldn’t be doing, but we can’t go over all of them. As we mentioned at the start, if you are doing some of the don’ts, do not worry, we have all done some of them at one point in our trading career, simply learn from them and try and turn that don’t into a do.

Categories
Crypto

The Worst Advice You Could Ever Get About Bitcoin Trading

Advice can be a fantastic thing, it can help us improve in pretty much everything that we do. However, on the other side of that coin, it can also be devastating. Advice is often given with good intentions, yet some of the advice given, no matter how good the intentions are can be bad advice, advice that can end up hurting you or your accounts should you decide to follow it. So let’s look at some of the worst advice that you could ever be given about cryptocurrencies, don’t get us wrong, the advice probably worked for someone, but it is a risk to follow it and we would recommend that if you hear any of the following that you avoid that advice like the plague.

Buy, Buy, Buy

Buy, buy, buy, advice that is given out a lot, in the past, at any time throughout the life of coins like Bitcoin, if you had bought and helped you would now be in profit, it is as simple as that so the advice would have done pretty well. For other cryptocurrencies though, that advice may not be quite as good,  a lot of them have had their all-time highs long ago and have not recovered back to that value. If you simply buy without any real plan or idea of where you will get out, including the historical process of the asset then you could be in for a disaster. Only buying can lead to a lack of funds, it can lead to losses should the markets turn and while it can make you money, it is a risky strategy to simply continue to buy at every opportunity that you can. There have been people doing very silly things, selling their house to put all of the money into Bitcoin, yes it paid off but the risk was far too high, do not put everything into it and do not put money in that you do not have.

It’s A Scam

Bitcoin is a cam, cryptocurrencies are a scam, you will hear that a lot, and there is absolutely no evidence behind those claims. The majority of people that state this do not have an understanding of what it is that they are calling scams. We have to admit, that yes, there are some scams within the cryptocurrency world, but then again there are within any industry you look at, this does not, however, mean that the entire cryptocurrency scene is a scam, much the same way that not all banks are scams. Those that are telling you it is a scam will also be advising you to avoid buying it and to avoid trading it. That is terrible advice. There is no harm in trading these coins and tokens, as there are a lot that are very safe to trade. Try and avoid the smaller ones but the majority of brokers that offer any sort of trading and purchasing will be monitoring the coins they have listed and will filter out the undesirable or less than legit ones.

Sell On Drops to Avoid Losses

There are a lot of panic buyers out there, and for every panic buyer, there is also a panic seller, these are people who will see the price falling and instantly panic and sell their coins. This is the worst thing that you can do, well in most cases anyway. Instead, when it comes to cryptocurrencies there is a good example of why you should hold, only sell when you are planning to, when you buy them you should have a target amount in place, that is where you sell and withdraw. Do not sell just because the price is dropping, odds are that it will reverse and go even higher, causing you to miss out, and certainly don’t panic if the price drops after you have just made a purchase, that is an instant loss. So do not listen to those that tell you that you should be selling on the drop, there is no guarantee that it is the bottom and no guarantee that the price won’t instantly reverse.

Just HODL

Something that came up at the start of the whole Bitcoin and cryptocurrency boom was the term HODL, this is basically the idea of holding onto your bitcoin no matter what, with no real aim or goal as to when you will sell or withdraw back into local currencies. While there is certainly some credit to the idea of holding Bitcoin and other cryptocurrencies long term, as there is certainly profit to be had in doing that, the idea of not having any sort of end goal is not. Yes by cashing out you may lose some potential profit, but you are cashing out at a level that is right for you and so you should be happy with that, just aimlessly holding things and hoping that they continue to go up is not a good thing to do as everything that goes up will eventually come back down.

Don’t Buy It, Don’t Trade It

We put these ones in one as they are very similar, a lot of people are telling others to simply not buy into it or to not trade it, why they have decided that this is the advice that they are going to be giving we have no idea. There is absolutely no reason why you should not be buying and no reason why you should not be trading it. Many of the people giving this advice either do not fully understand how cryptocurrencies work or they simply do not like the risks that are involved. That is fine for them, but it is not a reason to advise other people away due to their own preferences. If you want to trade it, trade it, if you want to buy, then buy, do not listen to this sort of advice.

Those are a few of the things that we consider as the worst advice that you can get, there will of course be other silly things that you may hear or you may have even heard something even worse, either way, it is important that you do not take all advice on board, some of it can be ignored. After All the decisions on what you do are yours and yours alone.

Categories
Crypto Forex Psychology

The Impact of Psychology On Cryptocurrency Trading

The cryptocurrency market does not follow the rules of technical and fundamental analysis. Only psychology works here. Who will be the strongest: institutional investors, agitating markets with capital, or private investors, who know how to generate profits from these short-term price changes. The psychological patterns of cryptocurrency movements can form the basis for successful strategies. You will learn from this article how to develop a psychological strategy for operating cryptocurrencies.

Psychology of Operation

Cryptocurrencies make up a market that grows day by day. Following the announcement of BTC futures to begin trading at CBOE and CME, bitcoin increased from $12,000 to $17,000, breaking the 60% level of capital in the entire market. Other cryptocurrencies are also growing fast; total market capital grew more than 30% over two weeks, reaching the level of $500 billion. Such a rise attracts more and more traders to this market, who immediately face the need to choose a correct strategy.

It is possibly difficult to make predictions for cryptocurrency with technical analysis, so trading strategy indicators are not relevant here. The market is today immature to use indicators in historical periods. Sometimes it is possible to follow the formation of graphic figures (patterns), but quotes are often unpredictable. One can apply fundamental analysis, but even so, the movement of price is difficult to predict. For example, bitcoin, following news about the futures release, is constantly rising with moderate fixes. IOTA, following positive news from developers in late November, grew 2.5 times over a week, but then fell 40% in just one day, from $5.48 to $3.11.

Operating with fundamental analysis is complicated by several factors. First, there is no economic calendar. Second, there is no knowledge about how the news will influence quotes. Example: deep drop followed by a rise in the price of bitcoin after canceling Segwit2x; investors did not understand at first how to interpret the news. The cryptocurrency market is driven by private and institutional investor psychology. That’s what used to be used to develop a trading strategy.

Psychological Strategy

Most cryptocurrencies continue to increase the price fast, fewer and fewer investors want to set the profits. More and more traders invest in cryptocurrencies, but reserves are declining. In some markets, the margin is 20-25% and transaction fees make trading flat. First, it seems to be one more bubble. Institutional investors deliberately push the price up, aiming at a market explosion after setting positions.

Some considerations about how to make money with cryptocurrencies:

Study the amount of market demand and provisions. Don’t do long-term operations as you can reverse the market trend. If we have an order that will cover more than 20% of the total market volume it is better not to invest. A trader’s goal is not to create profits in the temporary growth of an unpopular currency with low liquidity. The trader’s goal is to minimize risks. Diversify risks. Fiduciary inflow is not as significant as it used to be. Money flows from one cryptocurrency to another.

There is a similar situation when Segwit2x was canceled. Then, after the collapse of the BTC, the BCH ratio immediately increased. Analyze the correlation of cryptocurrencies and study the currencies with inverse relation (e.g., BTC and ECH). If we find a growing market, you will win anyway; if you transfer from one currency to another, you will insure against potential losses.

Buy cheap. The cryptocurrency market is highly volatile. A 20%-25% asset drop is considered normal, so buy when the price is being corrected. If a currency falls more than 30%, then investors will not trust it. Study the volume of trading in markets. You can do it in market sections on the Coin Market Cup website. If trading is not equally assigned, there is a significant excess of trading volume in a single market, which could indicate that someone is deliberately raising the price of a cryptocurrency by creating an expectation around a currency to raise its price and then sell the asset at a higher price.

Don’t go into the market that’s going too high. A rapid rise (20%-25% per day) compared to the previous day may indicate that the rise is speculative and is likely to be followed by a prompt correction. The same was with IOTA and Ripple. Don’t get carried away by ordinary emotions. Communication forums are useful for Forex but not for the cryptocurrency market, where everything is unpredictable. By joining the overview you can get caught by big investors, who use rumors as a tool to manipulate.

Ignore the time corrections. However, cryptocurrency price charts seem like a Ponzi scheme and the goal of traders is to withdraw money in due time, there is no reason for the cryptocurrency market to collapse. For example, analysts predict that bitcoin will break the $20,000 level and grow more.

Categories
Crypto Cryptocurrencies

The Best Cryptocurrency Advice You’ll Ever Receive

There is a lot of advice being thrown around about things like Bitcoin and other cryptocurrencies, some of it is fantastic advice, other bits are not quite so good and could potentially put you into trouble. Wherever you go, there will be people giving advice on what you should be doing when it comes to the cryptocurrency world. Today we are going to be looking at some of the best advice that you may hear about cryptocurrencies and what you should do with that advice.

Don’t Buy Just Because the Price Is Low

The cryptocurrency markets are a crazy thing, they have hundreds of ups and hundreds of downs throughout the year. The age-old idea of buying low and selling high is used with pretty much everything in the world when it comes to sales and retail, the exact same applies to cryptocurrencies. You should be buying when the price is low and then selling when the price is high. There are some problems with this, how exactly do you know when the price is at its lowest? The truth is that you cannot and you don’t, you need to guess which is why things can be a little risky, of course, once it has been purchased, holding on until the price comes back up is certainly a good strategy and one that has served people very well in the past.

You Can Trade It Too

A lot of people know things like bitcoin and other cryptocurrencies as something that you purchase and then hold on to, that is a good way to make money and it is what a lot of people are getting very rich doing, however, that works best when you can buy a large amount of it, in the thousands. If you do not have that much then there are other fantastic ways to make money with cryptocurrency, one of those ways is to trade it, much in the same way that we do the forex markets. Many brokers are now offering it and you do not need much, just $10 to get started. You can trade it 24/7 with low spreads and low commissions, allowing even those with fewer funds to trade and earn more bitcoin as they go. Trading is a great opportunity and one that more and more people are starting to take up.

Avoid FOMO

FOMO stands for the Fear Of Missing Out, you suffer from this when you see others doing things that you are not, making you want to do it. This is very prevalent in the cryptocurrency world. When you see someone buying up things like bitcoin, only for the price to rise and they make a lot of money, you of course want to be a part of that and so decide to buy simply because they did, but the problem is that you are buying into something that you do not know about or due to your emotions. The markets may well turn at this point, the other guy will withdraw his funds and you are then stuck with a currency that is losing value, it is under your purchase price so you have no choice but to hold on or to sell at a loss. Do not buy into things just because someone else is doing well and you do not wish to lose out on any possible profits, do your own research and buy what you feel is right.

Diversify

Good advice for any sort of investment or anything that you are putting your money into is the fact that you should diversify, you should not stick everything in one basket or in this case one cryptocurrency. One thing to bear in mind though is that you also do not want to spread yourself too thin, you will want to get on 5 or 6 coins, not 20 or 30, the more you do the harder it will be to keep track of the coins you have and where all your money is. So ensure that you diversify out of just one coin but not too much.

Avoid Rumors

There are a lot of rumors when it comes to cryptocurrencies and we mean a lot. More than there are with pretty much anything else in the world right now. Some rumors end up being true, but the majority of them are not, the majority of them are made up and come from people’s minds, often what they want to happen with no real evidence behind them. So the last thing that you want to do is to listen to them or even worse to act on them. We have seen a lot of people place trades or buy coins based on rumor, and you can probably guess that the results ended up with a loss. So some of the best advice that you can be given is to simply not follow the rumors and do not buy things based on what a random person on the internet has said.

Only Spend What You Can Afford to Lose

Do not use money that you cannot afford to lose, that is one of the golden rules of anything to do with money, simply do not do it. Before you buy any coins, before you place any trades, think about the money that you are putting in and consider it as a loss as soon as it leaves your bank account. Consider whether you need that money, what would you use it for? If it would be used for food or things like rent then you should not be using it at all, you should only use money that would not negatively affect your life. Whatever you do, do not do what some others do, do not borrow money, do not take a loan to trade with or to buy cryptocurrencies with, this will only lead to you being in debt potentially for many years to come.

Those are some of the things that we consider some of the best advice that you can get about cryptocurrencies. There are of course many other things that could help you out, in fact, you probably have a few tips for others too. Keep your wits about you, but with money, you can afford and do research rather than blindly listening to others. That is the best advice that you can use.

Categories
Cryptocurrencies

Why We Love Trading Bitcoin (And You Should, Too!)

Bitcoin has been a bit of a revelation, it has grown beyond what many imagined would be possible, it has changed the face of the world in some regards and is still considered and a potential currency of the future, but when it comes to trading it, there are still quite a few people who are skeptical, and that’s fine. We are going to be looking at some of the reasons why we love to trade Bitcoin and the reasons why you probably should too. Of course, it won’t be for everyone, that is fine, we still love it and we know that a lot of you will too.

Amazing Profit Potential

Let’s get this one out the way straight away, there is the potential to make a lot of money. As with any form of trading, one of the motivations for us to do it is the fact that we can make money from it, it will be the same for the majority of traders. When it comes to trading Bitcoin, that potential is huge, as is the overall potential of Bitcoin to be huge. Just look at the recent growths, the coin is now sitting near to $40,000, up from $6,000 less than a year ago, which is over a $30,000 increase in less than a year. If that isn’t profit potential then we do not know what is. That is why we love trading it, the great thing about trading is that unlike holding,m when the price retraces, which it does and always will, you can profit on the drops too, granted that is a little riskier. The profits are there to be had and that is why we love trading bitcoin so much.

It’s Trader Directed

Unlike forex trading, the crypt markets are trader-led, what this means is that the markets will basically move the way that traders want them to move. So if one single very large trader comes in, they have the ability to shift the markets up or down with a single large trade, or when the sentiment is an extreme buy like we have seen recently, more and more little traders are coming in with their buys, this will continuously push the markets up to even higher prices. Of course, the news does have an effect on the markets, when there is good or bad news surrounding bitcoin, the price will often shift up or down, but again, this is solely based on the traders making that decision, hence why more often than not, some bad news or even good news will have pretty much no effect on the markets right away, it may take a few days, weeks or even months for traders to fully understand it and for it to take effect.

It’s Super Exciting!

The Bitcoin markets are exciting, they are a constant battle between the bulls and bears, and even without trading it, simply watching it can be exciting. In fact, we do that quite a lot, just sit by the charts and various other indicators watching things change and watching the battle between the buys and sells. Of course, it is a little more exciting when your money is on the line. Trading often brings adrenaline and it is no different from crypto trading. When our trade is going the right way, it feels fantastic, when it is going the wrong way it is a panic, but both of those emotions bring our adrenaline levels up. There is nothing better than a big trade dropping to near the stop loss only for it to reverse and end up in profit. You do not get that feeling in many other places in life, so that is one of the major reasons that we love to trade it.

It’s Growing Liquidity

The cryptocoryne world is still in its infancy, it is still a baby, sounds crazy to say that but bitcoin has only been around for around 11 years, that is not much at all. When it was first made available to trade, there was not much liquidity at all, you could only place a 0.01 lot, and you were lucky if that matched the price you put in, these days though it is far easier, the liquidity within the markets has been growing rapidly and it is not pretty easy to put on a trade as big as 10 lots. The liquidity will only continue to grow as more and more people start picking up Bitcoin and more people start to trade it. It is growing in popularity which is only good for our trading. Higher liquidity also means that the markets are a little safer, the movements will still be there and they will be just as big, but they may not be quite as sharp, allowing us to implement slightly better risk management, which of course is vital for the survival of our trading accounts.

It’s Widely Accessible

It used to be hard to get into any form of trading, but that is very accessible with the rise of the retail forex brokers, the same thing has happened with Bitcoin trading. Back when the coin first launched you could not trade it on a broker, you could buy it, or you could sell it at very limited places, that was it. Then brokers began to bring it in, but it was very exclusive, only a few brooks had it and those that did, had horrendous spreads, making it not trading at all. Now though, more and more brokers are picking it up, crypto-specific brokers are out there too. These brokers are now offering much better spreads, ones that make it profitable again, and many broilers are now offering leverage on their crypto markets including bitcoin. These developments have made it far easier to get into the world of bitcoin trading, and this added accessibility has helped to improve things like liquidity in the markets. We can only imagine that it will become even more accessible in the future, how we do not know, just that it most likely will.

Those are just some of the reasons that we love trading bitcoin and why you probably should too. There are of course many more reasons, but we would be here all day if we went over all of them. Have you tried trading bitcoin? If you have, you most likely would recognise a number of the things that we put, the markets are always developing and changing, something that is exciting for us and as long as bitcoin and other coins are around, we will pretty much always love to trade them.

Categories
Crypto

Why You’re Failing at Crypto Trading

Crypto trading can be fantastic, it offers so much profit potential and works very much the same way as forex down, so if you have traded forex before then you know pretty much everything that you need to when it comes to crypto trading too. There are however a few differences too, which means that if you rere to trade exactly the same as forex, things might not go quite so well. At any rate, we are going to be looking at some of the reasons why you may be failing at crypto trading.

Trading Like Forex

While things are very similar, we are using the same trading platform, we are often using the exact same brokers, the charts are the same, and indicators and expert advisors work on crypto trading too. However, even though the majority of things are the same, this does not mean that we trade it exactly the same. In fact, we trade it very differently. The fundamentals behind how the cryptocurrencies move are very different from those on Forex. If you were to trade it exactly the same, you will come across margin issues, you will come across movements that go against all of your indicators. If you are planning on trading cryptocurrencies then you will need to alter the way that you trade, you will need to change your indicators and change the way that you analyze the markets. Do not trade the exact same way, cryptocurrencies are not made the same way and so the markets do not behave the same either.

Not Managing Risks

There are a lot of risks when it comes to trading crypto, a lot more than there are with things like forex and due to this you need to manage them properly, not doing so will only lead to losses and potential loss of your account. Risk management is paramount when it comes to trading crypto, more so than it is for any other asset that we have traded before. You need to ensure that you are using things like stop losses with every single trade, you need to ensure that your risk to reward ratio is in place and being used with every single trade. Make sure that you are using risk management techniques at all times, otherwise, your account will blow pretty quickly.

Too Many Trades

It can be very tempting to place a lot of trades, far more than you should be, especially if things are going well for you. This can lead to something known as over trading, where you simply place too many trades. When we do this it is often going against the risk management plans that we have in place. Each trade that we place uses up a little bit of our available margin, when this runs out the broker will close all of the trades at the current value, most likely for a loss. The more margin that we use, the smaller the drop has to be in the markets for us to blow our account. So try and stick to your risk management plan, if that allows you to open a lot of trades then it may need some adjustments. Try and limit the number that you take in order to keep your account safe and try not to get carried away once you have a few good wins in a row.

Trades Are Too Large

One thing that you certainly need to take note of when trading with cryptocurrencies is the vast difference in what a lot size is, when we trade more than one cryptocurrency, we need to be aware that they will act differently. A 0.1 lot size for bitcoin on some brokers is 1 bitcoin, for others, it is 0.1 bitcoins, things like XRP, 0.01 lot could be 10 XRP for others it could be 100 XRP so it’s a big difference. So you need to be aware that different brokers have different amounts, especially if you are taking trading signals from somewhere. You will also then need to manage your trade sizes in accordance with those sizes, so while you may normally trade 0.1 lot sizes, for some you may need to change down to 0.01 lots or even go up to smelting like 0.5 lots in order to stay in line with our current risk management plans. Just remember that it is better to go a little lower than a little higher.

Not Understanding How Markets Move

The crypto markets work and behave very differently to forex markets, they react differently to news, they can be far more influenced by the larger players than the forex markets can and they have certain seasonal movements, not to mention the huge trends that can double, triple or even increase the price tenfold. These sorts of movements can catch out a trader who is not prepared for them. You need to know these things to properly implement risk management techniques, which are of course vital to the survival of your account.

Not Enough Money

Depending on what you are trading, you will often need a lot more capital in your account in order to trade crypto properly, things like Bitcoin can have huge movements, these huge movements can be both up and down, so if you get hit with a downward movement, you will either need to close out our trade or to have enough money to hold it, which can at times be very expensive and require a very large account. Other coins have similar things happening to them too, so if you are looking to successfully trade cryptocurrencies then you should certainly start with a higher balance.

Those are just some of the reasons why people often fail at trading the crypto markets, they can be dangerous things, there are a lot of opportunities to lose money or for you to be caught out. Having said that, they also offer some of the best returns that we have seen with trading in a long time, the trends are long and hard which are fantastic for those that get it right, but the hurdles are there, it is just about getting over or around them.

Categories
Cryptocurrencies

Detailed Breakdown of Bitcoin’s Four Year’s Cycles

Up to 30 companies in Japan have announced plans to issue digital yen, and Rick Rieder, the CIO of BlackRock, is taking crypto seriously if his comments on CNBC are anything to go by. According to the world’s largest asset manager, the functionality and durable mechanism of crypto assets makes them more functional than gold, a fact that is up for debate.

It seems that the financial sector around the world is gradually embracing cryptocurrency, and it’s only a matter of time before it transitions to the mainstream. As a crypto investor, the current trend is satisfying. 

But is it time to make a move and laugh all the way to the bank?

Well, the most recent bitcoin highs had some investors rolling in a sense of accomplishment and success when they cashed out at the right time. Others waited for the prices to continue the upward trajectory above $41,000, but it is now on a free fall. 

Well, understanding the price movement of bitcoins is critical to make wise decisions. 

The popular theory that attempts to explain bitcoin’s price movement is bitcoins four-year cycles.

The price of bitcoin moves in cycles of booms and busts. If we were to learn anything from history, investors’ best financial decision has been to own bitcoin in a bull market.

Let’s examine the historical price behavior to have a better understanding of the bitcoin price volatility.

Price History of Bitcoin

Satoshi Nakamoto invented the cryptocurrency in 2008, and in the following year, the first transaction took place between him and an early adopter. The first real-world transaction took place when a bitcoin miner used bitcoins to buy pizzas in 2010 in Florida.

Bitcoin’s trading history is characterized by volatility since its creation in 2009. It has a reasonably short life, but it has seen a lot of action. One upon a time, the cryptocurrency traded for next to nothing, and the real price increase was from $0.0008 to $0.08 for a single coin. 

All along, bitcoin has been through significant rallies and crashes. Regardless, interest in bitcoin has surged in 2020 and is expected to continue in 2021. By 2020, the crypto-currency had recouped all its losses to record an all-time high. 

The Stages 

Stage 1: Exponential Highs

At this phase, the fear of missing out (FOMO) and euphoria among bitcoin investors is at its highest. The emotions compel many people to purchase at abnormally high prices leading to a prolonged bull trend that pushes the prices through the roof.

The high exponential stage is also called “topping out,” where the bitcoin prices reach their peak. 

Stage 2: Correction

The correction stage comes immediately after the euphoria that characterized the previous 12 months. The stage corrects for over-optimism by shedding considerable valuation.

Profit-taking investors create a sell-side pressure, which causes the bitcoin to drop a bit after an abnormal growth.

Stage 3: Accumulation and Recovery

Following the price correction, the sell-side momentum starts to slow down and bottom out. It is at this stage that bargain buyers take advantage of the discounted prices to accumulate bitcoins. 

Eventually, new demand starts to form, and the phase becomes a point of maximum financial opportunity where the prospect of reward overtakes that of the associated risk. The new growing demand is driven by the desire to make enormous profits. 

Stage 4: Continuation

After bottoming out, bitcoin starts to go up. Historically, the continuation stage has been all about exceeding the sell-side pressure characterized by sellers resisting the growing prices.

The continuation stage is an essential technical step that indicates a shift in market psychology. The stage tends to encourage strong emotions to result in buy-side momentum. Following a successful 12-month close, the market psychology then transitions to buying from selling.

The Effect of Bitcoin Halving 

Bitcoin halving occurs when the value of new bitcoin created every 10 minutes is halved. The latest bitcoin halving reduced the block reward of 12.5 to 6.25 every 10 minutes. 

Typically, bitcoin halving marks a fundamental variation in the protocol of the cryptocurrency. The event also has a significant impact on the prices of the bitcoin as well. It acts as a catalyst to propel the prices to new heights. 

Given that 21 million is the maximum supply cap, the halving event means that it will take much longer for all the bitcoin to go into circulation. It also means that all the bitcoins created will be less and less, limiting the supply. The scarcity of bitcoins increases value, which is why bitcoin halving acts as a catalyst in the new bull market. 

In the past, the bitcoin price has grown exponentially following the halving events. This observation can be used to explain the current situation.

The bitcoin’s next phase one was expected to be in 2021 to manage a 12-month candle close above the price level of ~$14,300. It has clearly exceeded this.

The belief was that the $20,000 mark will spur the buy-side momentum driven by investors’ intense emotions.

The 12-month price chart indicated that ~$14,300 may actually be the inflexion point in market psychology. Based on the 4 Year Cycle historical trends, a candle close above ~$14,300 provides the necessary confirmation that the prices may go above $20,000 in 2021. That is just what happened based on the current prices. 

Current Bitcoin Situation and Interpretation

A few days ago, on 8th January 2021, the world’s largest and most popular cryptocurrency was posting highs of $41,962. It is now just above $30,000, recording losses of up to 20%. Bitcoin is in free fall, which has already wiped $130 billion off the market.

The fall in prices comes after the UK Financial Conduct Authority warned investors that they could lose everything based on difficulties in valuing crypto assets and price volatility. 

However, the problem is that the price volatility will pique the interest of individual investors whose ability to take on significant losses is a far cry compared to institutional investors.

Since bitcoin was created, the debate has raged about whether the abnormal rises in prices constitute market bubbles or are objective indicators of its future role in the financial ecosystem. A market bubble is when the asset value becomes over-inflated.

Some investors will see the latest bitcoin rise and fall as a bubble that has burst. On the other side of the spectrum, some experts believe the bitcoin fluctuations are nothing out of the ordinary and will continue to occur towards its eventual valuation.

The considerable upside swings followed by corrections are normal behaviour and confirm the bitcoins four year cycles is more than just a theory. 

Bitcoin prices were in the first stage of exponential growth to reach an all-time high of $41,962. Apparently, the cryptocurrency is now in the correction stage before it enters the accumulation and recovery phase, and eventually, continuation.

Final Word

As with any other new technology, bitcoin prices are highly volatile, but it’s normal behavior. Based on the four-year cycles, bitcoin was experiencing exponential growth towards the start of January 2021, but it is now in the correction stage. The slashing of up to 20% of its value is just a normal phase of correction and nothing to cause panic.

Bitcoin investment is not for the faint-hearted. It is only for those with higher risk tolerance levels, sufficient exposure to the asset class, and a long term view of the technology. It would be best if you never lost sight of the big picture. Focus on the forest as opposed to a single tree. Happy trading, folks! 

Categories
Crypto Forex Basics

Forex or Crypto Trading: Which is More Profitable?

Forex and Cryptocurrency markets are very popular. With both traders trade looking to profit from this, but in itself which market is the most profitable? While cryptocurrency is growing, it is quite volatile, even more than the Forex market which makes many wonder which option is the most profitable.

Both markets have a high level of volatility, although the cryptocurrency market is much more volatile than any other and in this aspect, you can control more risks in the Forex market having greater chances to maximize profits. Trading in any form means a risk of capital loss but there is always the potential for a trader can earn money. Price changes in cryptos are very wide, and although you can earn money, you can also lose quickly by making risks more controllable on Forex by having less volatility.

The Forex market, as we know, is decentralized just like the cryptocurrency market, but what impact does this have? The currencies and assets of the Forex market are regulated and in the cryptocurrency market, cryptocurrencies are not regulated and are decentralised. Both the market and the assets present within it are totally decentralised.

Because of this, the variation in the price of assets in the cryptocurrency market is allowed to be much higher, which in turn leads to much higher volatility where prices rise and fall widely. While in the Forex market although the changes are present in the same way as the currencies regulated by the countries, their prices remain much more stable despite the volatility.

The purpose of this publication is to say that market is more profitable to operate in terms of the possibility of controlling the risk of loss of capital that as I said always is present. Now, if you ask me if you should trade cryptocurrencies, my answer is that if you do, start by using the most heavily capitalized cryptocurrencies like Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.

Operating in both markets can generate potential profits, but what if you compare the two? You can conclude that Forex is much better, but if you only talked about cryptocurrencies in this article, I would tell you to make use of them because they are very good assets.

Many people wonder what will be the best option to invest, as cryptocurrencies are quite popular and have good returns, but Forex trading is gaining increasing popularity among young investors.

It will always be advisable to make good investigations of the markets of interest. Although for the modern investor Forex and cryptocurrencies head the lists, because they have very good profitability and also offer much desired financial freedom. It should also be noted that many of the investors at the moment have a stake in both markets.

Advantages of Cryptocurrencies:

-They are widely quoted and recognized worldwide.

-They do not depend on any central bank and are not regulated by any country.

-It functions as a scarce asset, so the market gives it value.

-It allows anonymous transactions outside the system’s regulation.

-Cryptocurrencies are immune to inflation.

-It is a payment system that does not depend on banks since it has a blockchain chain system that allows you to transfer money without the need for banking.

-It is a digital ledger that cannot be manipulated. 

Disadvantages of Cryptocurrencies:

-They are highly volatile: it has presented an annualized volatility in the last year of 80%, which makes it enter the classification of high-risk assets

-Changes and Attempts at Regulation: for many, it is a bomb that can explode at any time, and although they have tried to regularize it has only remained in comments and statements. To this end, countries like China prohibit cryptocurrency transactions.

-Robbery: although it is a bit difficult it is not impossible. Hackers have been engaged in developing different methods by which they have succeeded in taking over the assets of others.

-It demands high commissions for its exchange for traditional currencies and they are not yet accepted at all levels.

Advantages of Forex

-You can trade in any currency in the world.

-It offers a greater number of profitable options to invest.

-It is focused on trading (short-term trades) allowing you to see benefits in less time.

-It works with brokers that are regulated by the countries in which they were founded, which increases the reliability of the system.

-It is a highly liquid market and can operate with leverage. 

Disadvantages of Forex

-To see big profits requires the investment of a greater capital or in its absence of a greater number of small and effective operations.

-Forex as such is unregulated and no one or nothing watches over the trades that are made there.

-Leverage can be negative in some cases as it can lead to significant losses.

So… Cryptocurrencies or Forex?

This decision is very subjective, so let’s see what it’s like to invest in each of these markets.

First of all, time plays an important role when you buy these two investments. Forex transactions are short-term, you usually don’t wait more than a few days to close your positions. It’s pretty fast compared to cryptocurrencies, as you want to trade every opportunity you get because of small profit margins.

The more you trade, the more profits you will get, which means you must be an active and experienced Forex trader to know exactly when to place your trades and when to withdraw. With cryptocurrencies, it’s a completely different story.

To begin with, the market is highly volatile, meaning that prices can skyrocket or plummet significantly in just one day, even hours. Applying the same tactics as with Forex trading would be too risky because there is a lot of money at stake, especially if we are talking about Bitcoin.

This is because, in terms of investment, cryptocurrencies should not be regarded as currencies at all, but as precious goods of some kind. Therefore, when you invest in cryptocurrencies, you are actually making long-term investments, because the results are not quick: you will have to wait several months until they start to pay off.

As a result, cryptocurrencies are not for everyone, as they require an infinite amount of patience and self-control to prevent you from performing a panic-stricken transaction when the time is not optimal for you to sell. In addition, with more than 1500 cryptocurrencies today, predicting which one is the goose of the golden eggs and which one is not an almost impossible task.

On the other hand, Forex transactions are much more concrete, as they are almost always the four main pairs and have only a few coins crossed here and there. Forex is a more stable market than cryptocurrency, with the latter being a portfolio diversifier first. Of course, it does not take away the merit of virtual currencies, as they are still a very young market and have much to give, maybe in a few years have enough stability to be seen by traders with greater importance.

For now, Forex will continue to be the favorite for traders on a day-to-day basis, while cryptocurrencies will be seen as long-term investments for those people who can withstand the high volatility of these, and who seek to move away from traditional institutions, as well as banks and states.

Categories
Forex Daily Topic Forex System Design

Trading Algorithms IX – RSI Failures System

Trading the naked RSI system depicted in this series’s previous video as an overbought/oversold signal generator is too risky, and its long-term results questionable. The system is profitable only in sideways movements. Thus, a trending filter or a detrending step will be needed to avoid the numerous fake signals.

Divergences and Failure swings

Welles Wilder remarks on two ways to trade the RSI: Divergences and Top/Bottom failure swings.

Divergences

A divergence forms when the price makes higher highs (or lower lows), and the RSI makes the opposite move: lower highs (or higher lows). RSI divergences from the oversold area show the market action starts to strengthen, an indication of a potential swing up. In contrast, RSI divergences in the overbought area show weakness and a likely retracement from the current upward movement.

Failures

An RSI Top failure occurs with the following sequence of events:

  1. The RSI forms a pivot high in the overbought area.
  2. An RSI pullback occurs, and an RSI pivot low forms.
  3. A new RSI pivot high forms, which is lower than the previous pivot high

Fig 1 – RSI TOP failures in the EURUSD 4H 2H Chart

An RSI Bottom failure occurs with the following sequence of events:

  1. The RSI forms a pivot low below the oversold area.
  2. An RSI pullback occurs, and an RSI pivot high forms.
  3. A new RSI pivot low forms, which is higher than the previous pivot high.

Fig 2 – RSI Bottom failures in the ETHUSD 1H Chart.

According to Welles Wilder, trading the RSI failure swings can be more profitable than trading the RSI overbought-oversold system. Thus, we will test it.

The RSI Failure algorithm

To create the RSI Failure algorithm, we will need to use the Finite State Machine concept, presented in this series’s seventh video.

The Easylanguage code of the RSI system failure is the following:

inputs:  Price( Close ), Length( 14 ), OverSold( 30 ), Overbought( 70 ), 
takeprofit( 3 ), stoploss( 1 ) ;
variables: state(0), state1 (0), state2(0), state5 (0), state6(0), rsiValue(0),
 var0( 0 ), rsi_Pivot_Hi(0), rsiPivotHiFound(False), 
rsiPivotLoFound (False),rsi_Pivot_Lo(0)  ;

rsiValue = RSI(C,Length);

If rsiValue[1] > rsiValue and rsiValue[1] > rsiValue[2] then
      begin
         rsiPivotHiFound = true;
         rsi_Pivot_Hi= rsiValue[1];
     end

else
     rsiPivotHiFound = False;

If rsiValue[1] < rsiValue and rsiValue[1] < rsiValue[2] then
      begin
         rsiPivotLoFound = true;
        rsi_Pivot_Lo = rsiValue[1];
     end

else
     rsiPivotLoFound = False;

If state = 0 then
      begin
        if rsiPivotHiFound = true and rsi_Pivot_Hi> Overbought then
             state = 1    {a bearih setup begins}
     else
           if rsiPivotLoFound = True and rsi_Pivot_Lo < OverSold then
                 state = 5; {a bullish Setup begins}
     end;

{The Bearish setup}    

If state = 1 then
      begin
         state1 = rsi_Pivot_Hi;
         if rsiValue > state1 then state = 0;
         if rsiPivotLoFound = true then
             state = 2;
     end;
    
If state = 2 then
      begin
         state2 = rsi_Pivot_Lo ;
         if rsiValue > state1 then state = 0;
         if rsiPivotHiFound = true then
         if rsi_Pivot_Hi< 70 then state = 3;
     end;

If state = 3 then
     if rsiValue < state2 then state = 4;

If state = 4 then
      begin
        sellShort this bar on close;
        state = 0;
     end;


{The bullish setup}

If state = 5 then
      begin
       state5 = rsi_Pivot_Lo;
       if rsiValue < state5 then state = 0;
       if rsiPivotHiFound = true then
             state = 6;
     end;


If state = 6 then
      begin
         state6 = rsi_Pivot_Hi;
         if rsiValue < state5 then state = 0;
         if rsiPivotLoFound = true then
             if rsi_Pivot_Lo > OverSold then state = 7;

     end;
           

If state = 7 then
     if rsiValue > state6 then state = 8;

 If state = 8 then
      begin
         buy this bar on close;
         state = 0;
     end;
   

If state > 0 and rsiValue < OverSold then state = 0;
If state > 0 and rsiValue > Overbought then state = 0;    

{The Long position management section}

If marketPosition =1 and close < entryprice - stoploss* avgTrueRange(10) then
    sell this bar on close;

If marketPosition =1 and close < entryPrice + takeprofit* avgTrueRange(10) then
    sell this bar on close;


{The Short position management section}


If marketPosition =-1 and close > entryprice + stoploss* avgTrueRange(10) then
     BuyToCover this bar on close;

If marketPosition =-1 and close < entryPrice - takeprofit* avgTrueRange(10) then
     BuyToCover this bar on close;

The results, measured on the EURUSD, are not as brilliant as Mr. Welles Wilder stated.

The trade analysis shows that the RSI Failures system, as is, is a losing system. This fact is quite common. It takes time to uncover good ideas for a profitable trading system. In the meantime, we have developed a practical exercise using the finite state machine concept, handy for the future development of our own trading ideas.

Categories
Crypto Daily Topic Cryptocurrencies

5 Crypto Trading Strategies To Bank on in 2021

Cryptocurrencies are rapidly transforming the financial sector. At the moment, they’re finding greater acceptance in payments besides offering an alternative investment vehicle. The reasons for their increased popularity are varied. Chief, though, is their decentralized nature and potential for high returns. From these reasons, it is easy to see why they’d be an attractive investment. 

Crypto trading is as lucrative as it’s risky. It is, therefore, imperative to adopt a solid investment strategy. Again, investing in digital assets needn’t be a complex engagement. The market is rich in strategies that ease potential investors’ foray into the space. 

This article examines five proven strategies that one may bank their crypto trading on in 2021.

Which are the Best five Trading Strategies to Adopt in 2021?

As already indicated, there is a myriad of trading strategies at any investor’s disposal. Individual preferences determine the choice of the means to employ. Here are five concrete plans that you can depend on this year. 

1. Scalping

Scalping is a trading strategy defined by short durations between a trade’s opening and closing. The underlying thinking is that little profits snowball into huge ones in time. Scalpers are traders employing this technique. It utilizes market volatility and is handy in slow market days.

Types of Crypto Scalping Strategies

A scalper may pick from any of the following five strategies:

  • Crypto Range Trading- the range is the difference between the price support and resistance. Scalpers buy at support and sell at resistance.
  • Bid-Ask Spread- The scalper opens a position at either the bid or ask price. To get a profit, they then quickly close the position a few points lower or higher.
  • Arbitrage- here, the investor profits from trading the same asset in different markets. Arbitrage is either spatial or paring.
  • Price Action– the trader uses price movements to make trading decisions. 
  • Margin Trading- It entails transacting with borrowed funds.

The Pros and Cons of Crypto Scalping

Like any other trading strategy, scalping has its pros and cons. One advantage is that the small position sizes make it low risk. Additionally, regular small price changes enhance profits, and one can automate their transactions. 

Finally, affordable entry positions expand trading opportunities.

On the other hand, scalping is demanding; Any slight delay may lead to losses. Further, it has low returns per trade, and traders incur higher transaction costs.

2. Buy the Dips and Hold

Downswings offer excellent buying opportunities. If the affected asset is strong, the price will appreciate once it gains its market confidence.

An examination of cryptos reveals periods of over and undervaluation. Additionally, the crypto market reacts to media coverage. Positive reportage triggers increased acquisition at overvalued rates. The reverse causes traders to panic, therefore, sell their coins below their real value.

Undervalued cryptocurrencies are ideal investment opportunities. Traders using this strategy study the market to determine peak undervaluation. They also predict the earliest recovery. After this, they do their trades holding out for profit when the market corrects itself.

Pros and Cons of Buying the Dips and Holding

A significant plus for this strategy is that one needn’t have special high-frequency trading software to trade. It is convenient as a single trade suffices. Moreover, one profits from both the cryptos upside and the undervalued amount. 

The downside is that it is a long term approach. There aren’t quick profits here. Additionally, it requires a proper grasp of the market. Finally, the strategy calls for calmness amidst market turbulence.

3. Fading Trading

A high-risk trading strategy, fading involves betting against the market’s momentum. The trader sells when there’s an upswing in the market and buys when the market experiences a downswing.

Owing to its high-risk nature, it’s a suitable method for experienced traders. Also, it’s ideal for risk-inclined individuals. However, it could yield dividends when correctly applied and is best suited for a highly volatile market.

Pros and Cons Of Fading Trading

When adequately executed, Fading can be a lucrative trading strategy. Traders can realize profits from any market reversals, a situation that always follows an upsurge or a markdown. That said, it is a risky strategy. One risks incurring massive losses if they misread the market.

4. High-frequency Trading 

High-frequency trading is the most profitable yet complex trading strategy to use. It involves the full automation of trading strategies. HFTs are algorithmic and entail volume trading in milliseconds.

Pros and Cons of High-Frequency Trading

HFT trading is beneficial in several ways. Firstly, it reduces the bid-ask spreads, enhances market efficiency, and creates high liquidity to mitigate the effects of market fragmentation. Further, HFT removes emotions out of trading hence improving better decision making.

On the other hand, HFTs could be disadvantageous. For example, algorithms are susceptible to spoofing, thus price anomalies. Secondly, the hardware and software required for trading are costly. Also, the risk of glitches isn’t far away.

5. Golden Cross and Death Cross Trading

The golden cross denotes a situation where a cryptocurrency’s short term average crosses its long term average. Whereas the short term average comprises the currency’s 50 days average, the long term is its 200-day average.

The death cross, on the flip side, is the opposite of the golden cross. It is the point when the short term average goes under the long term average. The gist of this strategy is buying at the golden cross and selling at the death cross.

Analyzing the changes in trading volumes confirms the occurrence of these trends. Although some use technical indicators such as RSI and the MACD, many consider volume one of the best indicators. 

Pros and Cons of Golden Cross and Death Cross Trading Strategy

A major boon for the strategy’s users is that it helps to determine the market trend. Using both indicators is essential in pointing out attractive entry and exit points. 

Conversely, other schools of thought consider the two to be lagging indicators. Thus, they indicate momentum after price movements have occurred, not before. Additionally, some of the momenta they show could be temporary hence unreliable.

Final Thoughts

The growth of cryptos has ushered in an exciting period in global finance. Besides expanding the payments sector, it has created alternative investment avenues. This growth is fuelled by, among others, the higher ROIs recorded in the space. 

To the first time investor, navigating crypto investments could be exacting. For profitability, they need concrete strategies. Luckily today, there are many sound ones that help ease their entry into the sector. These vary in their utility, and ultimately the choice of one over the other is individual. That said, they serve the same end; taking the guesswork out of investments. 

So, let us know which of the five strategies you’ll be adopting this year!

 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 29 – Dogecoin Skyrockets as r/Wallstreetbets Enters on Crypto; Bitcoin Jumps on Elon Musk’s Twitter Profile

The cryptocurrency space had a wild week, first because of the r/WallStreetBets community entering the market (and pumping Dogecoin’s price by over 1000%) and then because of Tesla’s CEO Elon Musk tweeting about Bitcoin and promoting it. This has, in turn, caused Bitcoin to spike from $31,000 all the way to $38,200 in a matter of one hour. An interesting fact is that Musk’s Twitter bio now has #bitcoin displayed for everyone to see.

The crypto sector ended the day with most of the top cryptocurrencies in the green. Most analysts speculate that the recent wave of buyers came as a result of Dogecoin’s incredible pump, which was caused by the notorious r/WallStreetBets subreddit. Bitcoin is currently trading for $32,964, representing an increase of 5.26% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 1.41% on the day, while Litecoin gained 5.11% of its value.

Daily Crypto Sector Heat Map

3X Long Dogecoin Token gained 905.02% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by Dogecoin’s 513.17% and DOGEFI’s 369.90% gain. On the other hand, 3X Short Dogecoin Token lost 99.85%, making it the most prominent daily loser. It is followed by Panda Yield’s loss of 83.13% and Psychic’s loss of 72.46%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance decreased slightly from when we last reported, currently 62.8%. This represents a 0.1% decrease from our previous report.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has increased greatly since we last reported, with its current value being $979.02 billion. This represents a $54.27billion increase when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day attempting to push its price up as the market turned to green. Its price conquered the $32,350 level and pushed higher without hesitation. The move ended as bulls reached exhaustion near the $34,627 level. BTC’s inability to push past its immediate resistance has triggered a pullback, and the cryptocurrency is now most likely to retest the $32,350 level.

The overall change in market direction today came as a result of (as most speculate) Dogecoin’s insane upswing triggered by r/WallStreetBets.

BTC/USD 1-hour chart

Bitcoin’s technicals on all time-frames are either neutral with a slight hint of bullishness or bullish with a slight hint of neutrality.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is above its 50-period EMA and at its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (51.01)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $34,627                             1: $32,350

2: $37,445                             2: $30,072

3: $38,000                             3: $27,960

Ethereum

After yesterday’s failed break of the top downtrend line, the second-largest cryptocurrency by market cap pushed past and broke its descending pattern. Its price (at one point) went past the $1,350 level, but as bulls couldn’t confidently hold this level, bears initiated a pullback.

Ethereum’s short-term price direction will be dictated by how the cryptocurrency handles the top downtrend line (which is now a support rather than a resistance line) as well as by Bitcoin’s price direction.

ETH/USD 1-hour Chart

Ethereum’s technicals on all time-frames are bullish but also show a hint of bearishness.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is slightly below both its 50-period and its 21-period EMA
  • Price slightly below its middle Bollinger band
  • RSI is neutral (45.66)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,440                               3: $1047.6

Litecoin

Litecoin has confirmed its position above the $128.4 level after pushing its price above it yesterday. LTC is now in consolidation mode and is currently testing the 21-hour EMA. Its recent moves seem slightly unenthusiastic, meaning that its short-term price direction will most likely be determined by other cryptocurrencies’ movements.

LTC/USD 1-hour Chart

Litecoin’s 4-hour and daily overviews are neutral/bearish, while its weekly and monthly overviews are completely bullish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly above both its 50-period EMA and its 21-period EMA
  • Price slightly above its middle Bollinger band
  • RSI is neutral (55.45)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $120

3: $181.3                               3: $114.75

Categories
Cryptocurrencies

5 Exchanges that Don’t Need KYC Verifications

The KYC (Know Your Customer) regulations are standard with financial institutions around the world. These laws were enacted to prevent money laundering activities in the financial industry, and every one of us has been subject to them, in one way or another. 

The regulations require institutions or platforms to verify individuals’ identities before using their money transmission services, and most recently, virtual currencies. 

Cryptocurrency and blockchain technology is the new kid in the financial block, and already disrupting the market with lower transaction fees, confidentiality of transactions, and improved security against fraud.

Surprisingly, the KYC verifications are gradually creeping to cryptocurrency exchange platforms. This means that getting your money from the cryptocurrency exchange is a bit more complicated than sending money. But you don’t need to use “surveillance exchanges,” as critics call them, to trade.

If you prefer to withhold personal information with your cryptocurrency investment, you can use anonymous cryptocurrency exchanges. We list five of the best exchanges that don’t require KYC verifications.

Are KYC Exchanges Safer than non-KYC Exchanges?

No doubt, the exchanges that mandate KYC verifications may sometimes offer better security. The platforms are fully regulated and may provide better redress in case of a hack or when something goes wrong. 

On the other hand, regulators may not be able to track culprits in a fully anonymous platform. It can also sometimes be difficult to access important information such as inflation rate, currency generation, and other blockchain transactions. Regardless, the benefits of anonymity in cryptocurrency outweigh its downsides. 

BitMEX is a cryptocurrency derivatives exchange that is the latest to join the club of cryptocurrency platforms aligning themselves with the traditional financial institutions’ regulations. Since August 28 of 2020, the exchange has been rolling out KYC. All traders are required to submit photographic ID and other identifying information by February 12, 2021.

But this does not imply non-KYC Exchanges are not safe. In contrast, many cryptocurrency investors prefer non-KYC platforms. This is because they believe KYC is a powerful magnet for hackers, making everyone unsafe. Every time you make a transaction, you give out your crypto address that can be used in blackmail, social engineering, hacking, or by law enforcement.

At the Web3 Summit, Edward Snowden was given a headline spot, and this goes to show that privacy hardliners are not going to relent anytime soon. The action by BitMEX could see migrations to non-KYC exchanges such as ByBit, but still, that is a wait-and-see situation. 

The main goal of high-value crypto traders is to be in cryptocurrency exchanges that blend anonymity and security to a satisfying level. If any one of the two fails, the investors move to better alternatives, and there will always be crypto exchanges such as ByBit ready to receive them with open arms.

As a crypto trader, you can choose to keep your personal information and protect your identity from the reach of criminals by choosing secure, anonymous crypto exchanges.

Binance

The Hong Kong-based cryptocurrency exchange is currently the most popular and the world’s largest, with up to 10 million active users, ahead of Bittrex. With Changpeng Zhao as its head, Binance has been one of the most innovative with creating the Binance Coin (BNB) token. Binance supports over 150 cryptocurrencies.

Users can access a 2 BTC worth of cryptocurrency trading limit without KYC verifications, with additional benefits of up to 50% reduction in fees. You do not need verification for spot trading.

However, transactions involving large amounts of BTC will involve completing KYC procedures to use the Binance platform. Binance US, which the US traders must use, requires KYC verification during registration.

You can deposit funds on Binance through credit cards, bank transfers, and crypto deposits. Holders of its native token, BNB, enjoy a discounted rate. The exchange has a referral program for BNB tokens, among other rewards.

There are some signs that Binance could go the way of BitMEX and transition to full KYC sometime in the future. This is mainly because it is compelled to align with numerous jurisdictions’ requirements where the platform operates. They choose to avoid the push and shove involved with the regulators of different countries and regions. 

Block DX

The exchange operates on blockchain interoperability protocol or the Blocknet, allowing communication between private and public blockchains. Blocknet also makes it easier to interact and exchange crypto among the platform users. 

The Blocknet Protocol-powered decentralized exchange allows users to transact without an intermediary. It has no withdrawal and trade limits, thus allowing greater flexibility. The exchange provides trading pair freedom, where all you need is a small amount of its native coin, BLOCK, to take an existing order. You do not need BLOCK tokens to create an order.

According to the non-custodial exchange developers, Block DX does not have any pause button, kill switch or email notifications. There are no interruptions in scheduled or unscheduled maintenance, and it does not have any offshore company. It claims to be the best definition of a decentralized and anonymous cryptocurrency exchange.

What separates Block DX from its other decentralized peers is that it decentralizes all its platform components. You enjoy more flexibility and freedom.

Changelly

The anonymous cryptocurrency exchange has been around since 2013 and has considerable experience in the crypto space. 

The platform allows instant transfers across various cryptocurrencies to cryptocurrency wallets. The exchange has a reasonable fee of 0.5% and is very committed to protecting your privacy. Changelly only requires an email address.

Changelly is integrated into the Stratis app, and you can conveniently trade the $STRAT tokens right on your mobile device. But still, the exchange supports up to 150 cryptocurrencies. $STRAT is among the leading cryptographic tokens that you can freely trade in open exchanges. 

However, you need supporting cryptos such as dash and Ethereum to exchange for BTC. Changelly is a centralized exchange, but it does not require id verification to access the swapping services. The only instance where KYC verification is necessary is when Changelly detects suspicious activities.

The platform has a vast array of acceptable payment services apart from the crypto deposits. You can deposit through credit card payments, bank transfers, and even ApplePay. Besides, its trading algo is one of the most impressive yet, which scans other platforms to find the best trading prices.

ByBit

This platform matches the ability to leverage trades by up to 100 times by BitMEX without requests for any personally identifying information. This strategy helped ByBit accrue more than a million users worldwide since its launch in 2018.

ByBit may seem too lax with security for a casual observer, but nothing could be further from the truth. ByBit is only part of a handful of cryptocurrency exchanges that can genuinely be said to have never been breached since its establishment.

ByBit leverages two-factor authentication sign-ins compatible with authenticator apps, SMS, and email. Funds are usually in multi-signature wallets stored in offline cold storage.

The Singaporean crypto exchange has a wide variety of features for margins trading. The perpetual swap product, BTC-USD, is the most popular with ByBit, and you can trade ETH, EOS, and XRP. 

ByBit’s crypto margin trading guides have a wealth of tips and tricks on swapping derivatives. Anyone around the globe can use ByBit without the need for KYC verification. The platform has both Android and iOS compatibility and is available in different languages. 

Unfortunately, ByBit bars users from the US. 

IDEX

The hybrid cryptocurrency exchange, which has centralized and decentralized features, is a favorite for Ethereum holders. In an operating environment where owners can be liable for illegal activity in their exchanges, IDEX has pursued pragmatic decentralization to influence legal treatment by the regulators.

IDEX is mainly designed for Ethereum and Ethereum-based tokens (ERC-20) trading. 

The platform employs blockchain technology security and privacy to allow anonymous trading by using only the wallet addresses. You only need to deposit tokens to unlock the wallets and start trading. The IDEX native token holders receive a percentage of the transaction fees generated on the platform.

As of August 23, 2020, all users in the IDEX platform require partial verification to trade. You will also need passport scans and selfies for withdrawals of $5,000 or more. US customers are restricted from trading particular assets on the platform.

Final Word

The world of digital currency was propelled by, among other factors, anonymity. The increasing need for KYC verification to improve security also acts as a barrier. In some way, KYC is a potential threat, as well, in case of a data breach on public ledgers. 

Well, bitcoin mixers are an excellent option for anonymity and security. Nonetheless, a well-established crypto exchange platform that doesn’t require KYC verification is usually sufficient in most cases. Do a little digging before signing up for a cryptocurrency exchange. Check its policies, read the reviews, and weigh the quality of its customer support.

The above exchanges are only a few of the well-established and reliable crypto platforms you can start with. There are many others, as well. Happy trading!

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 28 – Bitcoin Strong Bounce off the 30K level, Altcoins Reversals Followed

The crypto sector ended up almost completely in the red, though most cryptos barely lost any value. Bitcoin is currently trading for $31,200, representing a decrease of 1.13% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 0.95% on the day, while LTC lost 2.06% of its value.

Daily Crypto Sector Heat Map

Zero Collateral Dai gained 828.50% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by QuadrantProtocol’s 327.68% and 3x Long Dogecoin Token’s 137.80% gain. On the other hand, EveryCoin lost 89.97%, making it the most prominent daily loser. It is followed by Zugacoin’s loss of 79.94% and TokenPay’s loss of 50.46%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance decreased slightly from when we last reported, currently 62.9%. This represents a 0.2% decrease from our previous report.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased very slightly since we last reported, with its current value being $924.75 billion. This represents a $10.78 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

 

After another day of its price moving towards the downside, Bitcoin attempted a rally towards the $32,350 mark. After its price establishing strong support at the $30,000 level, the largest cryptocurrency by market cap started surging. There is a strong chance that BTC will pass the $32,350 level if the hourly candle ends up above the 21-hour EMA.

Scott Minerd, the CIO of investment services firm Guggenheim, said that the institutional demand is insufficient to keep BTC above $30,000. Many analysts agree with this short-term assessment, while almost all of them are bullish in the long-term.

BTC/USD 1-hour chart

Bitcoin’s daily overview is mostly neutral (with some hints of bearishness), while its weekly and monthly overviews are tilted towards the buy-side. On the other hand, its 4-hour time-frame is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is above its 50-period EMA and its 21-period EMA
  • Price is slightly above its middle Bollinger band
  • RSI is neutral (56.39)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $32,350                             1: $30,072

2: $34,627                             2: $30,000

3: $37,445                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap spent the day testing the $1,211 level multiple times. After the support level held up on various occasions, ETH bulls entered the market and started pushing its price up. However, it is still uncertain whether this push towards the upside will end as another lower high and a continuation of the downtrend, or a break from the trend.

Ethereum’s immediate downside is guarded by the 21-hour and 50-hour EMAs, while its first major resistance level is the $1,350 mark, as well as the descending line that connects ETH’s recent lower highs.

ETH/USD 1-hour Chart

Ethereum’s technicals on the daily, weekly, and monthly time-frames are tilted towards the buy-side but also show some neutrality. Its 4-hour overview, however, is slightly bearish.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above both its 50-period and its 21-period EMA
  • Price at its top Bollinger band
  • RSI is neutral (57.04)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,440                               3: $1047.6

Litecoin

Litecoin managed to break out from its downtrend after breaking the $128.4 mark. What’s surprising is that such a strong trend was broken by just average volume. LTC found support in the 21-hour EMA, which currently stands right below the price level.

Litecoin has a zone of heavy resistance straight above it (above $130). It is very unlikely that it can “survive” without a major boost in volume, especially in these market conditions.

LTC/USD 1-hour Chart

Litecoin’s daily overview is mostly neutral (with some hints of bearishness), while its weekly and monthly overviews are tilted towards the buy-side. On the other hand, its 4-hour time-frame is completely bearish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is above both its 50-period EMA and its 21-period EMA
  • Price at its top Bollinger band
  • RSI is neutral (58.51)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $120

3: $181.3                               3: $114.75

Categories
Crypto Videos

Craig Wright (Claims To Be Satoshi Nakamoto) Threatens Legal Action Take my Bitcoin Whitepaper Down!


Craig Wright Threatens Legal Action: “Take my Bitcoin Whitepaper Down!”

Craig Wright, the self-proclaimed Bitcoin inventor Satoshi Nakamoto, has threatened legal action against the owners of two Bitcoin websites he accused of stealing his whitepaper and his other intellectual property.

As announced on Jan 21, Bitcoin.org and Bitcoincore.org had received allegations of copyright infringement coming from none other than Craig Wright and his lawyers. The counsel reportedly claimed that Wright, as the inventor of Bitcoin, was the legal copyright holder of the official Bitcoin whitepaper, owned the Bitcoin name and trademark, and the two aforementioned websites.

While the owner of Bitcoin.org, a developer known only as Cobra, has stated that he refuses to be intimidated by the threat of “false allegations,” the owner of Bitcoincore.org has already adhered to the request.

Cobra then stated: “Unfortunately, without consulting with us, Bitcoin Core developers removed the Bitcoin whitepaper from bitcoincore.org, in response to the allegations of copyright infringement, lending credence to these completely false claims.”

He then added: “The Bitcoin Core website was modified to remove all references to the whitepaper, the local copy of the whitepaper PDF was deleted, and with under 2 hours of public review, the change was merged.”

Things got heated when the owner of Bitcoincore.org, as well as the current maintainer of Bitcoin’s code, Wladimir J. van der Laan, responded quickly, telling his Twitter followers that this issue was not something he cares deeply about. 

He stated: “So let this be clear: I’m happy to maintain Bitcoin core’s code, but I will not personally be a martyr for BTC. It’s completely up to you as Bitcoiners to protect it.”


Van der Laan added: “This thing is all about decentralization and distributed systems, rather than personal macho posturing. I have no interest in it and am definitely not paid enough to take a stance.”

As the two Bitcoin core websites decided to take vastly different approaches, we will see which one was better and why. In the meantime, the Bitcoin whitepaper will continue to be hosted on Bitcoin.org, which hopes that other websites would follow them in resisting Craig Wright’s attempts at intimidation.

Categories
Crypto

Holding Bitcoin Now Is As Safe As Gold & Bonds!


Holding Bitcoin is as Safe as Owning Gold and Bonds – Anthony Scaramucci

Anthony Scaramucci, the head of SkyBridge Capital as well as former White House communications director, believes that Bitcoin’s value proposition has strengthened ever since governments have addressed many of the risks that are associated with the digital asset. 

In an opinion article published by CNN, Scaramucci and his fellow SkyBridge executive Brett Messing argued that Bitcoin had become a viable option for long-term investors seeking refuge from inflation. The authors also stated that holding Bitcoin is far less risky today than it was just a couple of years ago when regulations and infrastructure were underdeveloped.

Bitcoin’s growth has “caused government, as well as institutions, to step in and address many of the risks that are often associated with the digital currency,” the authors wrote, pointing to the Office of the Comptroller of Currency’s decision to enable all banks to provide cryptocurrency services.

They added: “Increased regulations, improved infrastructure, as well as access to financial institutions such as Fidelity, have made Bitcoin investments just as safe as owning bonds and commodities such as gold, which are used to balance portfolios.”

SkyBridge Capital made a big splash in the news last month when it applied with the US SEC to launch a Bitcoin hedge fund. Its SkyBridge Bitcoin Fund LP launched just a few weeks later, with Fidelity serving as custodian, while Ernst & Young were chosen to handle the auditing.

SkyBridge reportedly invested in Bitcoin during Nov and Dec 2020, allowing it to accumulate a substantial position in the cryptocurrency prior to its parabolic spike. By the time the fund was launched, on Jan 4 of this year, SkyBridge had claimed its BTC exposure was worth around $310 million.

Institutional capital is considered a major catalyst behind Bitcoin’s 300% rally in 2020, which brought its price to a new all-time high of $42,000 on Jan 8. Smart money investors are beginning to view Bitcoin as digital gold rather than just a speculative asset. 

 

Categories
Crypto Daily Topic Cryptocurrencies

Impact of DeFi in the Banking Sector

Blockchain is revolutionary fintech, and DeFi applications are taking success in financial services to a whole new level. Over 1.7 billion people remain unbanked, and DeFi is empowering internet users with permissionless financial services that cut out third parties.

Investors locked more than $15 billion within DeFi protocols in 2020. While decentralization has only captured billions, traditional, centralized finance controls the vast trillions of dollars transacting globally. Therefore, more innovations and marketing will suffice for further adoption.

However, with the industry admitting roughly $500 million from investors monthly, the prospects are changing. DeFi offers irresistible convenience and cost-effectiveness. The potential is also vast.

DeFi encompasses digital lending, borrowing, staking for capital gains, and regular income. DeFi services are permissionless, and they execute most transactions through tokenization and smart contracts. Eliminating all the third-parties and profit-seeking intermediaries make DeFi cost-effective.

Laws, rules, and regulations are programmed into blockchain protocols, and DeFi impacts every aspect of traditional financial services via automation. The impact is so great that it could change human interactions on an international scale.

In this article, we are peering into DeFi and its impact on the finance industry. A chronological outlook of blockchain developments suggests a pattern of innovation and adaptability. Understanding this pattern is crucial for your future investment projects.

The Ethereum Blockchain: How Are dApps Taking over the Banking Sector?       

To start with, let’s appreciate that the Ethereum community has revolutionized and accentuated DeFi as no other blockchain has. The ecosystem is advanced enough to evaluate systemic risks, and it reports DeFi Scores for platform security.

The ecosystem supports open-source composability, and the Ethereum blockchain harnesses the collaboration of independent developers worldwide. Borderless, open-source development has encouraged software designers and coding experts to focus on their strengths.

Ethereum’s infrastructure allows users to integrate various DeFi applications covering vast, diverse industries such as gaming, credit, supply-chain management, and capital markets. Laying and building applications on each other creates a vast network effect.

The Ethereum community is significant in DeFi because its network has over 7,083 live, global, main-net nodes, over 88 million unique users, over 42 million smart contracts executed.

You can utilize over 2,773 decentralized applications along with over 23K daily users. DApps are popular and post daily transactions exceeding 78K because of their:

  • Open-source codes.
  • Decentralized consensus and governance.
  • Noncustodial, permissionless services.
  • Tokenization and the use of smart contracts.

The diversity of dApps supports digital currency banking services, alternative services, DEXs, and P2P lending. Users embrace digital transactions because they are fast, secure, borderless, pseudo-anonymous, and irreversible.

Cross-chain interoperability came into DeFi markets in 2020, and you can now lend, borrow, and trade tokens across different blockchain networks.

How DeFi Saved Global Finance from Total Atrophy

When the Coronavirus became a global pandemic, states imposed mandatory lockdowns. Globally, the banking sector came to a standstill, and the international exchange services and other intermediaries such as asset managers, insurers, and bankers.

People were required to stay at home, and only essential services were allowed to proceed. If we didn’t have alternative financial services, most global supply chains would have suffered complete atrophy.

Governments created concerns about the value of money when they printed cash to bail out people and agencies. People and investors got more concerned that they pay taxes, yet governments dilute their savings by printing more money.

The threat to traditional finance was runaway inflation and the concern that credit is limited for those needing it the most. The international investment landscape went through shocks as investors turned to DeFi, seeking to mitigate the effects of a global pandemic.

Fintech Verticals Most Impacted by DeFi

Open Banking and Financial Data

Data is one of the most valuable commodities in the Mega Big Data era. Banking institutions traditionally hoarded all the financial data of users. In the US, financial data is worth over $15 billion. However, bankers won’t let you access it.

DeFi frees up your financial data for your benefit, allowing you to make intuitive, cost-effective investments. DeFi applications and services are providing open-source, immutable, financial market data.

Moreover, pseudo-anonymity and permissionless transactions prevent a handful of corporations from accessing your private transaction history.

Decentralized Exchanges

DEXs empower users to control their funds, giving them exclusive access to their private keys. These permissionless exchanges reduce the risk of custodian third-parties and diminish the risk of custodian third-parties losing your funds through major hacking events.

Cross-chain money markets are completely cutting off permission-based, custodian exchanges where you need expensive, third-party intermediation to swap bitcoins for other tokens like ETH, BCH, and XRP. Therefore, you can take just seconds to execute fast, borderless, almost-free transactions.

Borrowing and Lending

DeFi allows people to earn high interest on their savings. As crypto-assets stabilize volatility issues, DeFi is empowering crypto users to save profitably. You don’t need banks to store or transfer value. You can just use your smartphone and an internet connection to upload your finances to online savings software with blockchain transparency, security, and profitability.

DeFi platforms offer flexible interest payments, with some paying out interests every second. The best part is that you don’t need credit checks to take out DeFi loans. You only need to collateralize with your long-term investments. DeFi borrowing costs for commercial use are tax-deductible.

Tokenization and Asset Management

The tokenization of assets is at the core of decentralized finance. It’s revolutionizing assets-trading across the globe, offering traders new markets and opportunities. DeFi offers reliable asset and supply-chain management via smart contracts.

You can make international deals and trust total strangers to hold their side of the deal. Smart contracts don’t release payments unless all predetermined conditions are fulfilled. Tokenization is crucial in executing group contracts such as the ones utilized in:

  • Liquidity pools.
  • DeFi insurance protocols.

Parting Shot

The impact of DeFi on the banking sector threatens its existence, but bankers can adopt dApps to survive the storm and thrive. The banking sector won’t disappear, but it will evolve drastically as DeFi revolutionizes how we interact and do business.

Understanding the role of DeFi in 21st commerce is important for your financial future. Remember that these technologies offer cutting-edge convenience, and the market is growing exponentially. Therefore, you need to join in on the benefits or risk falling behind.

What do you think about DeFi, and what are your predictions on 2021 banking? Share your views in the comments section.

 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 27 – Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) Price Analysis

The crypto sector ended up either slightly red or slightly green, with only rare exceptions making significant moves to either side. Bitcoin is currently trading for $31,679, representing an increase of 0.51% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 1.61% on the day, while LTC lost 3.33% of its value.

Daily Crypto Sector Heat Map

Coupon Chain gained 74575.19% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by YVS.Finance’s 683.5% and Chonk’s 198.23% gain. On the other hand, Narwhale.finance lost 72.98%, making it the most prominent daily loser. It is followed by 3X Short Matic Token’s loss of 67.68% and MangoChain’s loss of 66.24%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance increased slightly from when we last reported, currently 63.1%. This represents a 0.2% increase from our previous report.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased very slightly since we last reported, with its current value being $935.58 billion. This represents a $0.96 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

After a day of attempting to break out of its slightly descending channel, Bitcoin has returned to the downtrend. The largest cryptocurrency by market cap tried to regain the $32,350 level but failed in doing so. This created a strong sell-wall above its current price of just below $32,000.

Bitcoin’s immediate upside is guarded by the 21-hour and 50-hour EMAs, as well as the 32,350 level. Its downside, however, is a free-fall until the zone above $30,000.

BTC/USD 1-hour chart

Bitcoin’s daily overview is mostly neutral (with some hints of bearishness), while its weekly and monthly overviews are slightly bullish. On the other hand, its 4-hour time-frame is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly below its 50-period EMA and its 21-period EMA
  • Price is slightly under its middle Bollinger band
  • RSI is neutral (46.41)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $32,350                             1: $30,072

2: $34,627                             2: $30,000

3: $37,445                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap returned to mirroring Bitcoin’s movement after entering its consolidation phase. Ethereum has, after failing to break the $1,350 level, returned to its slightly-downwards movement. The zone just above the $1,300 level mentioned yesterday was also broken, meaning that ETH is now trading between $1,211 to the downside and $1,350 to the upside.

Ethereum’s immediate upside is guarded by the 21-hour and 50-hour EMAs, as well as the $1,350 level. Its first major support level is sitting at $1,211.

ETH/USD 1-hour Chart

Ethereum’s technicals on the daily, weekly, and monthly time-frames are tilted towards the buy-side, but all have neutral oscillators. Its 4-hour overview, however, is completely neutral.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is slightly below both its 50-period and its 21-period EMA
  • Price slightly below its middle Bollinger band
  • RSI is neutral (46.02)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,440                               3: $1047.6

Litecoin

Litecoin has seemingly created a double bottom formation after hitting and staying above the $128.4 level twice. This may be a bullish signal for LTC traders, but the move needs to be accompanied by at least a slight increase in volume.

Despite creating a double bottom, LTC will have a hard time moving past the 21-hour and 50-hour EMAs, as they seem to be its immediate resistance levels. On the other hand, its $128.4 support level is holding up well for now, making it very uncertain where LTC will go in the short-term.

LTC/USD 1-hour Chart

Litecoin’s daily overview is mostly neutral (with some hints of bearishness), while its weekly and monthly overviews are slightly bullish. On the other hand, its 4-hour time-frame is completely bearish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is below both its 50-period EMA and its 21-period EMA
  • Price slightly below its middle Bollinger band
  • RSI is neutral (41.89)
  • Volume is slightly below average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $120

3: $181.3                               3: $114.75

Categories
Crypto Videos

Largest Russian Bank Sberbank Launching its Stablecoin in Spring 2021!


Largest Russian Bank Sberbank Launching its Stablecoin in Spring 2021

Sberbank, the largest Russian state-owned bank, has reportedly filed an application with the Bank of Russia regarding the launch of a blockchain platform for its “Sbercoin” stablecoin.

The director of the transaction business at Sberbank, Sergey Popov, announced the news on Jan 21 at a local financial event.

At the “Digital transformation and prospects for regulating the digital economy” event, Popov stated that Sberbank applied with the Russian central bank in early January, explaining that this kind of registration procedure usually takes no longer than 45 days. If everything goes by plan, the bank may launch its platform by spring 2021, the official said. However, Sberbank is still working on specifics about how to tax Sbercoin:

“There is a high probability of this project being launched in the spring. However, there is still one more issue that has not been fully resolved, and it is connected to the taxation of digital assets. We hope that this question will soon be resolved.”

Popov also added that Sberbank had completed internal testing to see if the solution they propose works, which it apparently did.

Sberbank broke the news on developing its own Sbercoin token at the end of November 2020, following long-running speculation about these plans. Its latest announcement comes shortly after Russia’s official adoption of the crypto law “On Digital Financial Assets” on Jan 1, 2021.


In late 2020, a member of the Russian State Duma, Anatoly Aksakov, said that the Duma’s Committee on Financial Markets expects that Russian crypto issuance will surge after adopting the country’s new crypto law.

Categories
Crypto Videos

Grayscale About To Unveil Chainlink?


Is Grayscale about to unveil a Chainlink (LINK) trust?

Rumors about Grayscale Investments being set to launch a raft of new products, including a Chainlink (LINK) trust, surfaced in the last week.

A statement from the State of Delaware’s Division of Corporations says that someone set up Grayscale Chainlink Trust on Dec 18, 2020. Basic Attention Token (BAT) trust, Livepeer (LPT) trust, Decentraland (MANA) trust, and a Tezos (XTZ) trust were also set up at the same time.


Grayscale Investments didn’t respond to the rumors and has yet to officially confirm it is behind the filings at all. Some reports tried to cast doubt on the legitimacy of this whole ordeal, as the registered agent for the trusts is not listed as Grayscale Investments, but rather as “Delaware Trust Company.” 

However, the Delaware Trust Company is currently listed on Grayscale’s website as one of its official service providers. On top of that, the same details were used when the Grayscale Bitcoin Trust was initially created in 2013.

With that being said, new trusts are far from certain to launch. A Filecoin (FIL) trust was established two months before the aforementioned trusts and still has not been made public.

Adding to all the uncertainty, a few weeks after the inception of numerous trusts, Grayscale founder and CEO Barry Silbert decided to step down from its position. He was then replaced by Michael Sonnenshein. It is unclear if Sonnenshein will continue with Silbert’s strategy or take the firm in a completely new direction.

Grayscale last made an official filing for a Stellar Lumen (XLM) trust in October 2018 — over two years ago. The Stellar trust was made public around six weeks after its inception.

The Chainlink army has been very vocal about the potential filing, showing its support and speculating on the effect this might have on the LINK’s price.

Chainlink recently flipped Bitcoin Cash and became the eighth-largest cryptocurrency by market cap, boasting a value of over $9 billion. 

Categories
Crypto Daily Topic Cryptocurrencies

DeFi vs CeFi Investments: What’s the Difference?

The advent of the blockchain and Bitcoin ushered a new era of transformation in the financial sector. The latter’s successes catalyzed further innovations in this space. One of its earliest adaptations was Centralized Finance( CeFi). Further developments have seen the introduction of Decentralized Finance(DeFi). 

Though the two are diametric opposites of each other, they serve one end: the expansion of financial services. But what do these concepts mean? What are their pros and cons? Can we find commonalities between the two? Finally, is there a way of bridging the divide between them?

This article will use the questions above to differentiate CeFi and DeFi investments. In this way, it aims at deepening your understanding of these crucial financial developments.

Understanding CeFi

CeFi is centralized finance and comprises closed financial markets. It entails a central authority controlling all aspects of transactions between peers. The said authority could be a bank, government, or any other uninvolved third party. 

Salient Features of CeFi

A keen look at CeFi investments reveals several important features. First, there’s a strong emphasis on KYC and AML requirements. In keeping with their jurisdictions’ laws, CeFi service providers require their users to provide personal information, including identity and residence details.

Secondly, CeFi investments are custodial in that they hold their users’ private keys. They are centralized and offer cross-chain services. CeFi investment services also allow for the exchange of different cryptos issued on different blockchains.

Advantages of CeFi

The popularity of CeFi investments speaks of their usefulness. For instance, they guarantee the protection of depositors’ funds. As they’re custodial, CeFi service providers assure their users of the safety and returns on their users’ funds.

Additionally, they undertake to secure one’s private keys. Since the service provider holds the private keys, there’s no danger of ever  losing them. Moreover, they have dedicated customer support systems. 

Disadvantages of CeFi

There are several deficiencies linked to CeFi. Among these are higher transaction fees. Because they use intermediaries in transactions, they charge higher fees. Another shortfall is that they lack transparency as they don’t provide for a public audit of transactions.

The centralized nature denies users control over their funds and makes them invasive in nature. Their  KYC requirements demand full disclosure of personal information. Users can quite easily lose their funds on these since CeFi investments are an easy target for hacking owing to their custodial nature.

Decentralized Finance (DeFi)

DeFi is an acronym for decentralized finance- a movement that champions the provision of P2P financial services. DeFi solutions give parties greater control over their transactions. They achieve this by eliminating centralizing authorities – banks and governments – from the exchanges.

Last year saw a proliferation of DeFi platforms. Currently, the major players in the space include Compound, Yearn Finance, Uniswap, and Marker DAO.

Key DeFi Features

A number of features define DeFi investment projects. To begin with, they are permissionless, which means that anyone can use them, regardless of their geographical location.

On top of that, they depend on Smart contracts, a set of code defining the relationship of the transacting parties. The smart contracts work together with Decentralized apps (Dapps) to automate transactions.

Again, DeFi investments are Blockchain-based. They run on the Ethereum blockchain and have wide applications across the payments, lending, and trading sectors.

Advantages of DeFi

The ballooning of DeFi projects points to them being beneficial. Here’s a rundown of their key advantages. A key feature is that DeFi investments give users autonomy over their funds. The user is the sole custodian of their investment.

Equally, it is expedient as it eliminates third parties, which helps to make it more affordable. Furthermore, DeFi investments are tradeable, thanks to tokenization, which allows for trading in micro-units.

Another key feature is that they’re accessible. DeFi investments are open to everyone, notwithstanding their location. They are also transparent since their deployment on the blockchain opens transactions to public scrutiny.

Disadvantages of DeFi

Although advantageous in many ways, DeFi platforms have their shortcomings. The threat of losing assets ranks highly among those. DeFi users may permanently lose their crypto assets by losing their private keys or mistyping their wallet addresses.

In close tow is the possible exposure to scams. Many cons have infiltrated the DeFi Sector. These take advantage of the absence of centralized control; victims have very little recourse, if any, in such cases. 

Significant Differences Between DeFi and CeFi

The differences between CeFi and DeFi are more than in the terminology. As the following points will indicate, the two platforms are stark contrasts of each other.

Governance

Centralized authorities run all aspects of CeFi platforms. The users have to subscribe to a set code of regulations. On the contrary, DeFi platforms look to their user communities for governance. Some of them issue governance tokens that enable holders to participate in the decision-making processes. An example is Compound (COMP).

Features 

Both CeFi and DeFi have unique features defining them. For example, CeFi projects are custodial while DeFi projects are non-custodial. Again CeFis offer dedicated customer services, which DeFis don’t.

Further CeFi investments adopt the use of Centralised Exchanges (CEX). On the flip side, DeFi investments use Decentralized Exchanges (DEXs).

Whereas CeFi projects are permissioned, DeFis aren’t. CeFis use third parties to create trust, while DeFis are trustless networks.

Regulation

CeFi platforms conform to strict regulations of the jurisdictions they operate. In compliance, they undertake thorough KYC and AML reviews of their users. On the other hand, DeFi is nascent and unregulated. They, therefore, dispense with KYC requirements. 

That said, many jurisdictions are instituting regulatory measures in crypto operations. The Securities and Exchange Commission of the US oversees cryptocurrency trade.  At the same time, the European Commission is pushing for a comprehensive legal framework targeting cryptos.

Fees 

As CeFi runs centralized exchanges, they charge higher fees. The higher fees arise from the need to maintain the platform, pay their staff, improve their offering, among others.

In contrast, DeFi platforms are affordable. They employ decentralized exchanges that don’t provide custody services and don’t have teams engaging in their day to day running.

Liquidity 

CeFi and DeFi investment platforms have different approaches to raising liquidity. CeFi projects raise liquidity by matching buyers’ and sellers’ orders akin to forex or stock markets. DeFi projects in reverse employ automated market makers that  pre-fund both sides of the trade.

Security 

The custodial nature of  CEXs increases their susceptibility to cyberattacks. Although CeFi platforms invest in robust security systems, it isn’t unusual to hear of major platforms getting hacked.  

 

DEXs, however, are noncustodial. Thus are less susceptible to such attacks. However, vulnerabilities in their smart contracts could expose them to the theft of funds.

Similarities Between DeFi and CeFi Investments

Although different, the two platforms find convergence in certain areas. For example, they offer similar financial services. These include trading (spot, derivatives, and margin), borrowing and lending, payments, and the development of stablecoins. 

Also, both systems bank on innovation. They use transformative blockchain technology. Further, both serve the digital assets ecosystem.

Parting Shot

CeFi and DeFi platforms are polar opposite. That said, they serve similar functions in payments, lending, and trades. Moreover, both are at different stages of their development, with CeFi having a headstart over DeFi. This gap in development calls for urgent redress. 

To that end, several projects and platforms are working on appropriate solutions. Binance is one of them. Apart from reducing the risks inherent in DeFi, there’s a need to mainstream it. Moreover, there must be a simplification of the DeFi adoption process besides building robust DeFi communities.

 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 26 – Blood on the Streets: Crypto Market in the Red

The crypto sector ended up almost completely in the red as most cryptocurrencies pulled back to lower levels. Bitcoin is currently trading for $31,575, representing a decrease of 5.26% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 7.24% on the day, while LTC lost 6.79% of its value.

Daily Crypto Sector Heat Map

EveryCoin gained 501.69% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by BBYS’s 280.04% and X Infinity’s 255.24% gain. On the other hand, ARTH lost 61.58%, making it the most prominent daily loser. It is followed by Typhoon Cash’s loss of 44.07% and Aventus’s loss of 40.31%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance increased slightly from when we last reported, with its value currently being 62.9%. This represents a 0.2% increase from our previous report.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased greatly since we last reported, with its current value being $936.54 billion. This represents a $54.92billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin’s gains in the past two days were taken away when bears took over the market after BTC failed to break the $34,627 mark. The cryptocurrency declined to the $32,350 level but quickly lost hold of it as well. BTC is currently hovering right above the $31,000 mark.

Bitcoin’s 1-hour RSI is getting dangerously close to the oversold territory, while its volume is descending, indicating a possible price stagnation or a direction reversal.

BTC/USD 1-hour chart

Bitcoin’s daily overview is completely neutral, while its weekly and monthly overviews are completely bullish. On the other hand, the 4-hour time-frame is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is below its 50-period EMA and its 21-period EMA
  • Price is close to its bottom Bollinger band
  • RSI is near the oversold area (31.21)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $32,350                             1: $30,072

2: $34,627                             2: $30,000

3: $37,445                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap spent the day retracing after posting a new all-time high at $1,477.30. ETH tested many levels but ultimately fell below the previous all-time high, and then the $1,420 and $1,350 levels as well. It is currently consolidating just above $1,300.

Ethereum seemingly created a zone of support just above the $1,300 level, which is holding up for 10 hours now. If this support holds long enough for BTC to change its price direction (or at least enter a sideways trading period), we may see ETH bulls reentering the market once again.

ETH/USD 1-hour Chart

Ethereum’s technicals on all time-frames are slightly tilted towards the buy-side, with its oscillators taking a more neutral stance.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is below both its 50-period and its 21-period EMA
  • Price near its bottom Bollinger band
  • RSI is very close to being oversold (39.73)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,440                               3: $1047.6

Litecoin

Litecoin has lost all of the gains it made yesterday, and then some. The eighth-largest cryptocurrency by market cap failed to pass the zone just under $150, which triggered a pullback and a dip below the $142.1 support (now resistance) level. On top of that, LTC also fell below the trading range it was in for the previous four days (excluding yesterday’s push).

LTC/USD 1-hour Chart

Litecoin’s short-term and long-term overviews have opposing stances: while its 4-hour and overviews show a slight tilt towards the sell-side, its weekly and monthly overviews are slightly bullish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is below its 50-period EMA and its 21-period EMA
  • Price slightly above its bottom Bollinger band
  • RSI is close to being in the oversold territory (33.05)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $120

3: $181.3                               3: $114.75

Categories
Crypto Daily Topic Cryptocurrencies

A Complete Guide to DeFi Taxes: Everything You Should Know

2020 was revolutionary for DeFi markets, and investors flooded the young industry with over $7billion from a mere $1.2 billion. As the market cap and number of transactions surged, regulators came up with responsive ways to tax cryptocurrency income. 

Initially, taxes were a foreign concept in crypto realms, but the IRS made definitive tax rules for blockchain transactions. Most digital currency taxation policies are based on cryptocurrencies, but regulation is spilling over to the DeFi markets.

Most crypto users are ignorant of digital currency tax laws, but the IRS will not let you plead ignorance. The federal tax agency is decisively cracking down on crypto tax compliance, and this article will help you gain some valuable insights.

Reading on will help you keep compliant with DeFi taxation requirements. Even more importantly, it will help you navigate DeFi, so you trigger as much tax deductibility as allowed in novel legal confines. 

Crypto Taxes 101

The IRS categorizes digital tokens as properties and not currencies. Bitcoins, for example, are capital assets that can attract profits and losses from transactions.

Reporting your crypto taxes gets harder with the increasing number of blockchain transactions per financial year. The IRS adopted and has never changed its use of first-in, first-out accounting, which means you should determine your net gains/losses on crypto assets.

Profits are categorized as long-term or short-term capital gains. Losses on cryptocurrencies are considered deductible capital losses.

To prevent crypto holders from absconding cumbersome tax computing and filing, the IRS imposes the form 1099-K for all crypto exchange users posting over 200 transactions per year. This file is similar to form 1099-B that stockbrokers use for filing capital losses/gains, but it has some unique provisions.

Introduction to DeFi Taxes

DeFi exists within cryptocurrency realms, enabling digital token users to trade, lend, and borrow via low-cost automation that rules out third-party financial services. In DeFi markets, crypto owners earn interest on lending platforms, and the interest is paid in the same digital currencies.

Therefore, crypto interests increase the number of digital currencies. When you earn interests through your crypto tokens, a different taxable event occurs from profits/losses. Taxable events in DeFi markets transpire when:

  • You trade one cryptocurrency for another via cross-chain money markets, realizing either profits or losses.
  • You trade crypto tokens for fiat currencies, either realizing either profits or losses.
  • You spend digital tokens on goods and services, realizing either profits or losses.
  • You earn in cryptocurrencies, and DeFi services create numerous earning opportunities where you trade your time and skills by executing network protocols. Moreover, some CEOs and athletes prefer getting their salaries in digital tokens.

These taxable events in cryptocurrency transactions are either:

  • Capital gains.
  • Ordinary income.

Ordinary Income vs. Capital Gains Income               

Ordinary income taxes apply for normal jobs, and the IRS doesn’t classify cryptocurrency miners any differently. You must pay according to your marginal tax bracket.

Bitcoin miners and validators on Proof of Stake protocols earn digital tokens for authenticating transactions. These earnings are categorized as ordinary income, and they offer minimal tax savings.

Capital gains income manifests when you swap your digital assets for a higher monetary value than you acquired them. These income streams present significant tax benefits and holidays. For starters, long-term capital gains tax rates are diminished compared to short-term capital gains.

Moreover, you can completely offset capital gains with capital losses. However, capital gains can only offset ordinary income up to $3,000.

DeFi Taxes in Lending and Borrowing

The DeFi ecosystem offers lending opportunities like no other. Your digital currencies can earn interest on Compound, Blanancer, and Uniswap by contributing to liquidity pools or lending directly.

Some DeFi protocols take crypto loans and issue out Liquidity Pool Tokens in return. The currencies you loan out determine the number of tokens from the liquidity pool and ultimately how much interest you make.

Interests that you make on crypto lending platforms qualify as ordinary income for tax purposes. The DeFi ecosystem allows you to boost your revenues, with some platforms paying out interests every second.

The same applies to crypto borrowing platforms. You can borrow bitcoins and other digital tokens to use for business or personal use. Commercial cryptocurrency loans qualify for tax-deductible expenses. Therefore, you can claim relief on costs you incur when borrowing cryptocurrencies for commercial use. 

DeFi Taxes for Unexpected Income from Hard Forks and Token Distribution

Sometimes, blockchain networks award existing users or asset holders with free digital tokens. Such tokens are newly acquired assets with monetary value. Such a transaction is taxable, and the IRS categorizes it as regular income.

Therefore, you must report it within your appropriate tax brackets, and you won’t qualify for many deductions on these earnings. If you use such tokens profitably, file the revenue made on top separately.

Networks like Compound sometimes distribute their native tokens for free to users during initial offerings. For example, the DeFi platform distributed $100 worth of COMP. The users who enjoyed free $100-worth assets owed the IRS whatever your income rate is for that $100.

You won’t pay any more taxes if you hold the COMP, no matter how much they appreciate it. However, you will owe the day you redeem that appreciated monetary value, and you should report the net revenue as capital gains.

If the $100-worth of COMP appreciates to $300 within a year, you will owe short-term capital gains tax for $200 if you sell the COMP or redeem it for products and services. Your capital losses for the COMP are not deductible on the income tax you owe for unexpected digital income.

Cryptocurrency forks are other sources of unexpected digital income. Forks result when validators or miners in a network disagree on blockchain governance. A great example is that of Bitcoin and Bitcoin Cash. They disagreed, and the Fork was quite controversial because it created BTC tokens from scratch.

Investors of parent cryptocurrencies end up with an equal number of forked-off tokens. For example, if you had 4 BTC during the fork, you automatically got 4 BCH, and you became a member of two independent blockchains.

These unexpected incomes are also part of your taxable income, and you pay per your tax bracket. Any gains on them are taxable, and any losses on them are not tax-deductible.

DeFi Taxes in DEXs

Basic taxation rules for cryptocurrencies apply to DEXs. You do not incur taxation for transferring funds from one platform to another, so long as the accounts and funds are yours.

However, when DEXs allow cross-chain asset swaps, an element of profitability occurs. You either gain profits or losses on your initial capital assets.

Reporting DeFi Income on Your Taxes

It is your responsibility to report DEX revenue streams for tax purposes. The advantages of DeFi taxation are abundant. Report all DeFi buys and sells on the IRS Form 8949 for your capital gains filing.

Tax Advantages of DeFi

For starters, DeFi lending converts your currencies to Liquidity Pool Tokens. Your liquidity tokens remain the same, but their value increases over time. You make a capital gain when redeeming your LPTs for the original cryptocurrencies.

DeFi converts what should be your regular income into capital gains income. Consequently, you qualify for deductions if you make losses later selling the tokens.

DeFi allows you to borrow tokens with different cryptocurrencies acting as collateral in Ripple’s XRP for the long-run, but ETC is more profitable in the short-term.

Long-term capital gains offer more deductibles than short-term ones, and you shouldn’t keep selling your XRP to leverage ETH’s profitability. You can borrow ETH with XRP as the collateral if the prospective earnings are more than interest costs.

Tax Disadvantages of DeFi

Whenever you exchange a crypto asset for another, you are most likely triggering a taxable event. This makes it cumbersome to track all profits and losses made every time such DeFi transactions occur.

Tax Treatment Overview on Different Platforms

  • Uniswap

Uniswap executes the Liquidity Pool protocol for its crypto lenders. It empowers you to swap income tax liability for capital gains liability, which is deductible. UNI tokens basically cushion you from future losses on the native coin you want to lend.

  • Maker/Oasis

This DeFi service allows you to harness long-term tax deductions on capital gains. The platform allows you to trade between assets and even earn interest on other assets. They allow you to lock your ETH as collateral, and as it gathers capital gains, you can seize the short-term profitability of other blockchain networks.

  • Compound

Compound is also a Liquidity Pool platform, which converts your ETH to cETH. When the liquidity pool earns interest, the value on your cETH will move from income tax liability to capital gains revenue, deductible for losses.

  • Balancer

Balancer is another Liquidity Pool DeFi service. It’s sort of a tax-lien insurance package against future losses on crypto assets. 

Parting Shot

Ignorance cannot be your defense when you are found to be non-compliant. The DeFi markets are enormous and have the potential to overtake centralized finance in years to come. The IRS knows this fact, as do most sovereign central banks. 

Fortunately, DeFi taxes are friendly, and they offer numerous tax-saving opportunities. You stand to make tremendous capital gains and high, compounding interest rates investing in DeFi. The gains are way bigger than the tax costs. 

Enforcement over DeFi taxes will only get more aggressive, intuitive, and efficient. That’s why you need to read this article and share it with your friends. Take charge of your tax compliance, and share some of your most effective tax filing tips for DeFi transactions. 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 25 – Ethereum Reaches a new All-Time High: What’s Next?

The crypto sector ended up mostly in the green as altcoins pushed up (while Bitcoin remained mostly stable). Several cryptocurrencies reached new all-time highs, including Ethereum and Aave. Bitcoin is currently trading for $33,335, representing an increase of 1/59% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 7.93% on the day, while LTC gained 2.12% of its value.

Daily Crypto Sector Heat Map

Foglory Coin gained 389.19% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by Unifty’s 187.19% and MileVerse’s 160.11% gain. On the other hand, EveryCoin lost 76.45%, making it the most prominent daily loser. It is followed by Zloadr’s loss of 62.48% and FUTUREXCRYPTO’s loss of 54.1%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance dropped further from when we last reported, with its value currently being 62.7%. This represents a 2.1% decrease from our previous report.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has increased greatly since we last reported, with its current value being $991.66 14.56 billion. This represents a $77.10 billion increase when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the weekend with its price slowly descending towards the $30,000 mark until a new surge of buyers changed the price direction. BTC has bounced from the $30,900 level and pushed up past the $33,250 level. Its price is currently consolidating in the $33,400 zone.

Bitcoin’s upside is guarded not only by the $34,627 level but the recent high of $33,865. Traders will have to be careful when taking long positions on BTC and will have to devote most of the time checking the order flow to properly gauge the resistance levels.

BTC/USD 1-hour chart

Bitcoin’s 4-hour and weekly overviews are bullish and show some signs of neutrality or bearishness, while its monthly overview is completely bullish. On the other hand, its daily time-frame is pretty neutral.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly above its 50-period EMA and its 21-period EMA
  • Price is close to its top Bollinger band
  • RSI is near the overbought area (64.47)
  • Volume is slightly below average

Key levels to the upside:          Key levels to the downside:

1: $34,627                             1: $32,350

2: $37,445                             2: $30,072

3: $38,000                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap “decoupled” from Bitcoin and pushed up, surging to its all-time highs and briefly creating a new one at $1,477.3. Ether is currently fighting to stay above $140 and enter the price discovery mode yet again.

Ethereum has quite a lot of support levels right beneath its current price, most notably the $1,440, $1,420, and $1,350 levels. Its upside levels past the all-time high will, however, have to be determined by drawing Fib retracement levels.

ETH/USD 1-hour Chart

Ethereum’s technicals on the 4-hour, daily, and weekly time-frames are bullish and show some signs of neutrality or bearishness, while its monthly overview is completely bullish.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above both its 50-period and its 21-period EMA
  • Price near its top Bollinger band
  • RSI is very close to being overbought (68.27)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $1,440                               1: $1,420

2: $1,477.3                            2: $1,350

3: $1,500                               3: $1,211

Litecoin

Litecoin’s weekend went without much price fluctuation, with LTC moving between $133 and $143.5. However, LTC bulls managed to push past the $142.1 level and bring its price to $145, where it is now consolidating. Litecoin’s volume also surged during the price increase.

Litecoin traders will have to pay attention to several factors, including LTC technicals, Bitcoin price movement as well as Ethereum price movement.

LTC/USD 1-hour Chart

Litecoin’s overviews on all time-frames are bullish, with its 4-hour, daily, and weekly time-frames having some signs of neutrality, while its monthly overview is completely bullish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly above its 50-period EMA and its 21-period EMA
  • Price slightly above its middle Bollinger band
  • RSI is neutral (63.36)
  • Volume is slightly above average

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $120

Categories
Crypto Videos

Crypto Ban Petition Attempt! Is He Just Serving His Own Interests?


British Financial Advisor Creates a Crypto Ban Petition

 

Neil Liversidge, a veteran financial advisor and the owner of the independent financial advisory firm West Liversidge, has called on the government of the United Kingdom to fully ban transactions in cryptocurrencies like Bitcoin.

Liversidge’s strong opinion on the topic goes as far as him starting a petition urging the local financial authorities to stop cryptocurrency transactions in the UK. The petition has the goal to:

“Legislate to prohibit the payment by or any form of acceptance of cryptocurrencies by UK resident businesses or individuals, and to require UK regulators (the FCA and PRA) to prohibit any transactions by UK financial institutions in cryptocurrencies.”

Liversidge cited an anti-crypto narrative common amongst crypto disbelievers, arguing that cryptos such as Bitcoin have no intrinsic value and that they “can be a destabilizing influence on society, and mostly used for criminal activity.” The financial advisor also thinks that cryptocurrency proof-of-work mining is “harmful to the environment.”

The aforementioned petition’s deadline is July 7, 2021, according to the UK Government and Parliament website. At the moment, the petition has collected 108 signatures.

In an interview with finance-focused publication Professional Adviser on Jan 13, Liversidge noted that a blanket ban on cryptocurrency transactions in the UK would help the enforcement reduce the power of criminals using cryptocurrencies like Bitcoin for illicit activity. “Law enforcement will never catch all of the people that use crypto for illicit activities; it won’t even catch most of them. However, destroying their financial base reduces their power.”

Liversidge acknowledged that a crypto ban would immediately trigger a market crash: “If the UK government takes the lead and bans transactions on cryptos as my petition requests, that will surely set off a chain reaction, crashing cryptocurrencies overnight,” he said.

The IFA’s verdict is that all cryptocurrency investors should immediately sell their holdings: “If you’re holding cryptos now, my advice to you would be to find a bigger fool than you and dump it all quickly.” Liversidge also stated that he has “never owned any and never would own any” cryptocurrency, even if he knew it would net him hundreds of percent of returns.

Categories
Forex Daily Topic Forex System Design

Trading System design – Manual Backtesting your Trade Idea

We have a potential trading idea, and we would like to see if it is worthwhile. Is it really critical to code it? No. But very convenient? Yes.

Manual historical backtesting

There is no need to code the strategy to do an initial validation test. All we have to do is pick a chart, go back in time and start performing trades manually. But how to do it properly?

  1.  Use a trading log spreadsheet, as the one forex.academy provides.
  2. Thoroughly describe the methodology, including the rules for entry, stop-loss, and take-profit settings. 
  3. Use a standard 1 unit trade size ( 1 lot, for example) in all the trades.

Once the rules of the game have been set, we position the chart, start moving the action one bar at a time, and trade the chart’s right side. It is critical to take all the signals the strategy offers. Cherrypicking spoils the test.

Market Condition

The financial markets move in phases. We should think it has two main phases and three directions.

 

 

The two main phases are impulses and corrections.

The three movements are Upward (Bullish), downward (bearish), and sideways (consolidations).

Bear and bull directions are mostly similar in the Forex market because currencies are traded in pairs, so the quote currency’s bear market is the base currency’s bull market and vice-versa. 

With commodities, precious metals, and cryptocurrencies against fiat, this does not hold.

To properly test your strategy, you should apply it in all market directions and phases. Even better is performing a different evaluation for each market state. That way, your evaluation will tell you in which market conditions it works best and in which is not acceptable to apply it; thus, you could create a complementary rule to filter out the market phases in which the strategy fails.

Different markets

You must apply the strategy to all markets you intend to trade using it. As with the market conditions, you should test each market separately. After having all markets tested, you will find useful information regarding how markets the strategy works best and the correlations among markets when using it. That applies, of course, if you use the same timeframes and periods in all markets, which is advisable.

If you do it as said, you can also perform the summation of all markers date by date and assess the overall performance, its main parameters, and system quality.

Pros & Cons of manually backtesting 


 

  • No programming skills are required.
  • It helps you perceive how a real market evolves trade by trade.
  • You will find the potential logic errors, such as stop-loss wrongly set, take profits too close to the opening, thus 
  • You will be able to correct most of the gross mistakes of the strategy.

 

 

  • Cherrypicking. Discipline is key. If you start cherrypicking, you no longer are testing your original idea.
  • Most people doing manual backtesting do not properly trade all phases and markets. Not always thoroughly test all markets and their conditions, as it would require a lot of time. Thus the test is incomplete.
  • Time-consuming. A complete manual backtest takes much longer than a computer-generated backtest.
  • Awkward optimization. Optimization is also tricky and time-consuming. That is so because a parameter change would need another backtesting.

Final words

Manual backtesting allows us to have a first impression of how a new trade idea would fare in real trading, but a thoroughly manual backtest and optimization are time-consuming. Therefore, serious traders should start developing basic programming skills to automate both processes.

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Crypto Daily Topic Cryptocurrencies

How to Come Up With a Good Bitcoin Investment Strategy

Surprisingly, many people just buy Bitcoin and fumble with the investment until they make some profit. Investing in Bitcoin is actually a serious venture, and contrary to widespread practice, it needs a strategy! But what is an investment strategy anyway? What constitutes a good strategy? And, does it apply to all forms of Bitcoin investment?

These are the hard questions we seek to answer in this article. 

Is There a Right Way to Invest?

When investing in crypto or any other asset, you can gain or lose. The most successful investors are those who combine tactic, experience, and of course, luck. Since we cannot do anything about experience and luck, we are usually left with the tactic in the playground, and that’s where planning comes in. We’re not saying that there is a right or wrong way to invest. But, if you are really keen on maximizing your profits and keeping risks at bay, then planning for that journey is indispensable.

What is an Investment Strategy?

An investment strategy is a calculated approach that helps an investor make decisions to achieve specific goals. The investor could be seeking to multiply wealth. They could be seeking to protect whatever they already have. Regardless of the circumstances, an investment strategy must consider the investor’s goals, risk tolerance, and future capital needs. 

What Constitutes a Good Strategy?

Keeping in mind the above picture of what an investment strategy is, it is easy to figure out what a good one should be made of. Generally, you can consult the following checklist if you want to come up with a sound Bitcoin investment strategy.

  1. It contains your definition of risk tolerance – Risk is a central component of any investment strategy. Defining your risk tolerance helps you apply brakes when the train is accelerating in the wrong direction. It might sound trivial, but desperate decisions are never far from the mind when things get thick. 
  2. It identifies your goals – An investment strategy is nothing without goals. It should be clear from the start what you want to achieve from such an engagement. 
  3. It should be realistic – If it were that easy to make money, everyone would be rich. The excitement one gets when approaching an investment may mislead them to overshoot.
  4. It should aim at maximizing profits and minimizing risks – well, that’s the whole point of investing. 

This is by no means an exhaustive definition of a good investment. However, it is a fair guide on how to approach planning for your Bitcoin investment. With this background in mind, let us look at how you can develop an award-winning Bitcoin investment strategy.

Step #1 Identify the opportunity and the risk

If there is no opportunity, abort the mission. Diving straight into an investment without identifying whether there is a suitable opportunity sounds like gambling. After all, the whole purpose of venturing into investment is taking advantage of some opportunity. 

Spotting opportunities is not always easy, but sometimes it is. An example of opportunity in Bitcoin investment is the crypto’s rising value. This could be a short term opportunity or something that will outlive this generation (no one knows how long Bitcoin will sustain the uptrend). However you look at it, we must agree that identifying the opportunity is the basis of everything.

With opportunity comes risks. As mentioned earlier, risk is a core part of any investment strategy. The opportunity might be huge, but so could be the risk. If there is reason to believe that the current Bitcoin boom is a fad, the risk associated with investing all your savings would be catastrophic. The bottom line is, you should identify how much risk the opportunity presents and how much of it are you willing to tolerate.

Step #2 Decide how much and for how long

The amount of money you should invest and for how long are crucial parameters. Of course, you’re not planning to hold Bitcoin until you die. But if that is your intention, it should be clear from the onset. Holding assets indefinitely and without a plan defies the purpose of accumulating wealth.

However, this is not a rule cast in stone. For instance, if you plan to protect your wealth, you might want to convert a huge chunk of your dollar savings to Bitcoin, and short time fluctuations will not be a bother because profits will average out over time. 

Step #3 Invest – a plan without action is pointless.

Now that you have a clear goal and an understanding of the opportunities and risks, it is time to invest. Depending on your goals, you may find one investment approach more suitable than others. Typical options for investing in Bitcoin include:

  • Trading – With trading, you can either go for spot trading or derivatives trading. With spot trading, you simply buy Bitcoin when you think it is trading at a low price and sell when you believe the price has gone high enough. Without concrete investment goals, it is difficult to remain disciplined when spot trading as periods of explosive uptrends and epic falls might send you into euphoric buying/ panic selling episodes, respectively.
  • HODLing – This is where you buy Bitcoin and keep it with no intention of using the asset in the short run. This approach may be more suitable if you plan to protect your wealth or diversify your investment portfolio. Wealth stored in Bitcoin can be readily liquidated and converted to fiat money. You can also use such investments to acquire crypto loans. 

Step #4 Monitor your investment

An investment is like a seed – once sowed, the growth journey has only begun. Keeping an eye on your investment helps you to determine whether your strategy needs editing. If you believe you made mistakes in your original plan, there is no shame in revising it until you feel you have gotten it right. It is important to practice emotional control while observing how events unfold during the course of the growth of your wealth. You should also stay updated and keep learning, as that’s the only way to align your strategy with the reality of the market. 

Final Thoughts

Investing in Bitcoin is not complicated, but without planning for it, the chances of going nowhere with your investment are high. A good investment strategy, we have seen, needs to define your goals, your risk tolerance, be realistic, and focus on maximizing profits while keeping risks under control. There is no right or wrong way to invest, but that does not mean a planless investment is also acceptable. Similarly, the four-step approach described above is not the only sound methodology. However, it captures most of the crucial elements that will help your Bitcoin strategy stand out. Feel free to play around with it!

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Crypto Market Analysis

Daily Crypto Review, Jan 22 – Bitcoin Briefly Drops Below $30K; Market Sees Blood on the Streets

The crypto sector ended up almost completely in the red as Bitcoin’s drop below $30,000 (at one point) led the market down. Bitcoin is currently trading for $31,730, representing a decrease of 8.41% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 11.29% on the day, while LTC lost 4.76% of its value.

Daily Crypto Sector Heat Map

EveryCoin gained 734.83% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by Vox.Finance’s 132.94% and DACC’s 129.86% gain. On the other hand, PegsShares lost 99.20%, making it the most prominent daily loser. It is followed by Mithril Share’s loss of 75.17% and Chimpion’s loss of 59.53%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance stayed at the same spot as when we last reported, with its value currently being 64.8%.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased greatly since we last reported, with its current value being $914.56 billion. This represents a $10.97 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has had a horrible day as bears took over the market. Its price dropped to as low as $28,800, but found support in its 50-day EMA. The downturn, however, means that the largest-cryptocurrency by market cap fell out of its triangle formation, most likely spelling a start of a short-term downtrend or sideways trading phase.

Bitcoin is very unpredictable at the moment, but traders could find an opportunity in looking for drastic volume increases and “catch the wave” of buyers or sellers (while taking into account all the support and resistance levels).

BTC/USD 1-hour chart

Bitcoin’s weekly and monthly time-frames are bullish but show some signs of neutrality or bearishness. On the other hand, its 4-hour and daily time-frames are completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly below its 50-period EMA and at its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral after returning from being oversold (48.04)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $32,350                             1: $30,072

2: $34,627                             2: $30,000

3: $37,445                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap followed Bitcoin’s direction, but with slightly less intensity. Ether’s price dropped below the $1,211 and $1,183.85 levels and found support in the $1,047.6 level. However, the bounce that came after the bulls came into the market was insufficient to break the $1,183.85 level, and Ethereum’s price is now trading just below it.

The $1,183.85 level could be considered a pivot point, and ETH’s short-term price direction will greatly depend on whether bulls manage to break this resistance.

ETH/USD 1-hour Chart

Ethereum’s technicals are still mostly tilted towards the buy-side, with its longer time-frames (weekly and monthly) being completely bullish, while its daily time frame’s oscillators are pointing to the sell-side. On the other hand, its 4-hour time-frame is completely bearish.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is below its 50-period and at its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (45.02)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $1,183.85                          1: $1047.5

2: $1,211                              2: $960.5

3: $1,350                             3: $932.5

Litecoin

Litecoin’s movement in the past 24 hours much resembled Ethereum, with its price dropping below the $142.1 level and finding support slightly below the $128.4 level. While its push up did not reach the now-resistance level of $142.1, Litcoin did find support in the 21-hour EMA.

Litecoin’s volume increase in recent hours is negligible compared to the increase that Bitcoin and Ethereum saw. This may indicate less intensity in the moves to come, regardless of the price direction.

LTC/USD 1-hour Chart

Litecoin’s weekly and monthly time-frames are completely bullish and but show no signs of neutrality or bearishness. On the other hand, its 4-hour and daily time-frames are completely bearish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly below its 50-period EMA and slightly above its 21-period EMA
  • Price slightly above its middle Bollinger band
  • RSI is neutral (51.31)
  • Volume is slightly above average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $120

3: $181.3                               3: $114.75

Categories
Crypto Videos

Bitcoin is a Possible Reserve Currency – Former Canadian Prime Minister Says!


Bitcoin is a Possible Reserve Currency – Former Canadian Prime Minister 

Stephen Harper, a former prime minister of Canada, says there may be a place for Bitcoin as well as central bank digital currencies as part of a basket of reserve currencies that may replace the dollar.

In an interview with the investment service, Cambridge House’s Jay Martin Harper stated the possibility of the US dollar being completely replaced could only come from a large currency such as the Euro or Chinese Yuan. He expressed his doubts when it comes to either of them being a viable alternative currency given the uncertainty over the value of the Euro in the long term and the “arbitrary measures” that the Chinese government would take when it comes to guiding the value of the Yuan:

“It’s very hard to see what the alternative is to the US dollar as the world’s major reserve currency. Other than possible candidates such as gold, Bitcoin, a whole basket of things… I think you’ll see the sheer number of things that people use as reserves will certainly expand, but the US dollar will still be the bulk of it.”

The former prime minister then added that he thought central bank digital currencies were to some degree “inevitable,” but that they would likely be subject to monetary policy around the world. Harper stated his concern about central banks becoming “some kind of a general banker” rather than just a financial monitor that they currently are:

“Ultimately, if you have a digital currency that will be used by the central bank to control inflation and create a stable currency as well as priceability, then this digital currency is just a straightforward evolution of the marketplace,” Harper stated. “But if it is part of a series of what I consider as wild experiments as to the role of central banking… Well, then it worries me a lot.”

Stephen Harper served as the prime minister of Canada for nine years, from 2006 until 2015. Cryptocurrency and blockchain adoption in Canada has started expanding significantly since his departure, with the country getting its first regulated crypto exchange in Sept. 

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Crypto Videos

Canada’s First Public BTC Fund Grows 900% Passing 1 Billion Dollars!


Canada’s first public BTC fund grows 900% as it passes the $1 billion milestone

Canadian regulated digital asset manager 3iQ has passed another massive milestone of its public Bitcoin fund. 

On Jan 14, 3iQ’s Bitcoin Fund hit the $1 billion mark, as the company announced the news on Twitter. The new milestone shows QBTC’s parabolic growth after 3iQ originally launched the fund in April 2020. QBTC is up 900% from its previous milestone of $100 million recorded in Oct 2020.

As previously reported, 3iQ’s BTC fund is the first public Bitcoin fund in Canada that got listed on a major stock exchange, the Toronto Stock Exchange. Gemini, a firm owned by the Winklevoss brothers, provides custody services for 3iQ’s QBTC fund.

QBTC.U is currently trading at $48.63, up 330% from the $11 price it was trading for when it got listed in April.

3iQ is one of the largest cryptocurrency firms in Canada. In Jan 2018, 3iQ reportedly became the first cryptocurrency fund regulated by the Ontario Securities Commission as well as the Canadian Securities Administrators. Two years after that, in Feb 2020, 3iQ partnered with the blockchain startup Mavennet to launch a stablecoin that would be pegged to the Canadian dollar. This stablecoin would be regulated by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

3iQ’s former senior executive Shaun Cumby is currently the CEO of Arxnovum, a company that filed an application with OSC for a Bitcoin exchange-traded fund on Jan 11, 2021. Winklevoss’ Gemini will also provide its custody for the Arxnovum’s Bitcoin ETF.

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 21 – BTC in a Triangle Formation – What do the Analysts Say?

The crypto sector was split between slight gainers and slight losers, but overall lost some value as the market cap dropped below $1 trillion. Bitcoin is currently trading for $34,644, representing a decrease of 2.39% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 4.12% on the day, while LTC lost 5.41% of its value.

Daily Crypto Sector Heat Map

Cocos-BCX gained 107983.76% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by HAPY Coin’s 383.49% and Vox.Finance’s 371.42% gain. On the other hand, PegsShares lost 59.35%, making it the most prominent daily loser. It is followed by KIMCHI.finance’s loss of 44.21% and EveryCoin’s loss of 34.88%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down slightly since our last report as altcoins started to outperform, with its value currently being 64.8%. This value represents a 0.1% difference to the downside when compared to the previously reported value.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased slightly since we last reported, with its current value being $955.53 billion. This represents a $69 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin’s daily time-frame shows that the cryptocurrency is still contained within the triangle formation, which will be a major determinant in BTC’s future price movement. If we zoom in to the hourly time-frame, we can see that BTC moved down, broke the $34,627, and pushed towards the downside, but got instantly stopped by the triangle formation’s bottom line.

While Bitcoin’s short-term overview seems slightly bearish, many analysts call for a push towards $60,000 before any major pullback. However, judging by the current trading session, BTC has a higher chance of breaking the triangle formation to the downside at the moment.

BTC/USD 1-hour chart

Bitcoin’s weekly and monthly time-frames are completely bullish and show no signs of bearishness. On the other hand, its daily time-frame oscillators point to “sell” while the rest of the overview is still bullish, and its 4-hour time-frame is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly below both its 50-period EMA and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (44.21)
  • Volume is average (low)

Key levels to the upside:          Key levels to the downside:

1: $37,445                             1: $34,627

2: $40,000                             2: $32,350

3: $42,000                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap went into retracement mode after creating a new all-time high of $1,440 two days ago. Ether’s price moved in a straight descending pattern at first but then bounced back up and tried to retest the $1,350 level. As time passed, it was more and more evident that ETH failed to break $1,350 to the upside and that its price is now contained between $1,350 to the upside and $1,211 to the downside.

Ether’s current upside is heavily guarded, not only by the $1,350 level but also by the 21-hour and 50-hour EMAs.

ETH/USD 1-hour Chart

Ethereum’s technicals on all time-frames are bullish, but only its daily time-frame shows no signs of neutrality or bearishness. The rest of the time-frames (4-hour, weekly, and monthly) have their oscillators pointing to a neutral or bearish stance.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is slightly below its 50-period and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (44.30)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,440                              3: $1047.5

Litecoin

Litecoin spent the day trading on very low volume compared to the previous days, with its price contesting the $142.1 level twice. At the moment, LTC traders can face two scenarios, one being LTC falling below $142.1 level and pushing towards $128.4, and the second one being that LTC acts on the double bottom it created and pushes up to regain some of the lost value.

LTC/USD 1-hour Chart

Litecoin’s technicals are pretty split, with its 4-hour and daily indicators showing almost complete bearish sentiment and its weekly and monthly overviews showing complete bullishness.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly below both its 50-period EMA and its 21-period EMA
  • Price between its middle and bottom Bollinger band
  • RSI is neutral (41.78)
  • Volume is below average

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $114.75

Categories
Crypto Videos

Grayscale GBTC Faces Competition!


GBTC Faces Competition in the OTC Bitcoin Trust Market

Osprey Funds has just entered the crypto sector and is trying to become Grayscale’s competitor. The firm is offering an over-the-counter Bitcoin trust under the ticker symbol OBTC. The trust Osprey offer is similar to Grayscale’s Bitcoin Trust, also known as GBTC.

“The Osprey Bitcoin Trust provides an easy access to Bitcoin,” the firm’s website says. They charge a 0.49% management fee, which is the lowest cost solution currently on the market. As they stated, Osprey is an entity that “builds digital asset solutions for intelligent investors,” with the OBTC trust considered its “flagship offering.”

“OBTC began operating and being quoted in the OTC market on Friday, Jan 15,” Osprey Funds’ CEO, Greg King, said, adding:

“As of Jan 14, the product met all the requirements to become quoted under the OBTC ticker in the OTC market. In the next 30 days, the fund will attempt to become DTC eligible, and after Feb 14, all additional market makers will be allowed to quote it. 

Osprey’s launch in the BTC trust market is a direct poke at the largest Bitcoin trust, Grayscale. Grayscale has become one of the largest BTC holders in the world, currently possessing over 500,000 BTC.

GBTC stepped into the market with the idea to provide the public with easier access to Bitcoin through more traditional avenues, all while not even requiring them to custody their own funds. GBTC comes with a yearly 2% management fee, which is where Osprey wants to step in and beat the competition. Osprey’s recently unveiled BTC trust announced a management fee of only 0.49%. 

“We are always happy to see cryptocurrency access products enter the market, especially here in the US,” CEO of Grayscale Michael Sonnenshein told Bloomberg.

Accredited investors will require a $25,000 minimum to buy directly into the trust. Additionally, OBTC shares have a lock-up period of one year before they can be sold in the secondary market. As a comparison, Grayscale’s Bitcoin Trust requires a six-month lock-up. However, based on King’s comments to Bloomberg, the public may expect Osprey’s lock-up period to be cut in half in the near future.

Categories
Crypto Videos

JPMorgan Chase Executives Talk About Stablecoins!


JPMorgan Chase Executives Talk About Stablecoins

During a JP Morgan Chase’s Q4 2020 earnings call, the firm’s CEO Jamie Dimon and CFO Jennifer Piepszak discussed the OCC’s recent approval of banks being able to use stablecoins for payments, as well as whether or not this approval will have any significant impact on the development of JPM Coin, the company’s private digital currency. 

During the Q&A portion of the call, Portales Partners analyst Charles Peabody asked the executives about the OCC approval for banks to use various public blockchain networks for payments.

“That guidance enables an offering of stablecoins going on a public blockchain. That doesn’t impact the JPM coin. You should think about JPM coin as the tokenization of our customer deposits,” stated JP Morgan CFO Jennifer Piepszak, according to the call transcript.

However, she did not completely rule out the possibility of a stablecoin backed by JPM if customers showed interest.

“It’s obviously very early. We will assess the use cases and customers’ demands. But, it is still too early to see where everything goes for us.”

JPM CEO Jamie Dimon was quick to jump in and mention that the bank is currently “using blockchain for sharing data with banks,” and adding that their bank is at the forefront of development.

Debuted in Oct 2020, JPM Coin is used on the backend of JPM’s payments systems, helping the firm settle nearly $6 trillion in payments on a daily basis. 

Ultimately, Dimon seemingly implied that crypto payments settlement wouldn’t greatly change how JP Morgan operates.

“I do expect that stuff is coming soon, and it may not change our world all that much.”

However, Dimon may be underestimating the impact that crypto will have on the payments landscape. Paypal is one of the Fintech giants that Dimon mentioned by name as a direct competitor, confirmed that crypto payments would be available in 2021. The CEO — a former skeptic of cryptocurrencies — made it very clear that payments will become an increasingly crowded field over the next decade:

“I expect it to be a very, very tough competition in the next ten years. However, I expect to win. So help me, God.”

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 20 – ETH Reaches a New All-Time High; Crypto Sector in the Red

The crypto sector ended up mostly in the red as altcoins started retracing after their moves to the upside. Bitcoin is currently trading for $35,776, representing a decrease of 2.1% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 3.28% on the day, while LTC lost 3.44% of its value.

Daily Crypto Sector Heat Map

Folder Protocol gained 813.46% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by Global Gaming’s 198.29% and Benchmark Protocol’s 159.89% gain. On the other hand, 3XT TOKEN lost 85.20%, making it the most prominent daily loser. It is followed by Ether Kingdoms Token’s loss of 61.70% and Matrix AI Network’s loss of 52.48%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down since our last report as altcoins started to outperform, with its value currently being 64.9%. This value represents a 0.7% difference to the downside when compared to the previously reported value.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has decreased slightly since we last reported, with its current value being $1.024 trillion. This represents a $10 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin’s daily time-frame shows us that the largest cryptocurrency by market cap is still contained within the triangle formation (purple). Any break of the current sideways movement may contest the triangle as well. On the other hand, BTC on the 1-hour time-frame is bouncing between the $34,627 support and the $37,445 resistance level for the past five days.

Bitcoin’s price will soon have to break the sideways trading pattern and contest the triangle formation. If BTC bulls or bears manage to break the triangle formation, we could see a large move in the same direction.

BTC/USD 1-hour chart

Bitcoin’s short-term (4-hour and daily) technicals are slightly tilted towards the sell-side but still show a hint of neutrality or bullishness. Its weekly and monthly technicals are exactly the opposite, as they are slightly bullish but show some bearishness alongside it.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly below both its 50-period EMA and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (44.32)
  • Volume is average (low)

Key levels to the upside:          Key levels to the downside:

1: $37,445                             1: $34,627

2: $40,000                             2: $32,350

3: $42,000                             3: $27,960

Ethereum

The second-largest cryptocurrency by market cap took advantage of the “altcoin season” as money moved from Bitcoin and onto other altcoins. Ever since Ether’s price bounced from the $1,211 level on Jan 18, we could see bulls coming to the market in larger numbers. This made the $1,350 level fall, and ETH finally set a new all-time high of $1,440. While the new ATH is just $20 away from its previous one, this is considered a testament to Ethereum’s upside potential.

Ether couldn’t position itself above the $1,420 (previous ATH) and fell below as it started retracing. Its price is now testing the $1,350 level but will most likely stay above it.


ETH/USD 1-hour Chart

Ethereum’s technicals on all time-frames are tilted towards the buy-side, but all show a hint of bearishness in the oscillator department.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above its 50-period and at its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (50.69)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $1,420                               1: $1,350

2: $1,440                               2: $1,211

3: $1,450                               3: $1,183.85

Litecoin

Litecoin spent the day retracing from the recent $166.2 high after bulls reached exhaustion. LTC was trying to push towards the $180 levels and contest the 2021 highs but failed to do so as bulls spent too much strength in the $160 area, where the cryptocurrency faced heavy resistance.

Litecoin is now having a downward trajectory and has failed to break the 50-hour moving average in an attempt to break it. LTC traders may look for a trade after the cryptocurrency finishes testing the $142.1 level.

LTC/USD 1-hour Chart

Litecoin’s technicals on the 4-hour and monthly time-frames are completely bullish and show no neutrality or bearishness. On the other hand, its daily and weekly overviews show some form of bearishness.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is below both its 50-period EMA and its 21-period EMA
  • Price sightly below its middle Bollinger band
  • RSI is neutral (44.85)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $114.75

Categories
Crypto Daily Topic Cryptocurrencies

What Is It Like Investing in Tezos (XTZ)?

Smart contract safety, long-term upgradability, and open participation: these are the problems Tezos promised to solve when it was created in 2018. So, the developers built the network to facilitate peer-to-peer transactions and launch smart contracts. Behind the network sits the Tez (also called Tezzie) digital token, which is the focus of this article. 

If you are familiar with Ethereum smart contracts, you might already understand Tezos’ offering. However, the slight difference between smart contracts on these two networks is that Tezos allows participants to directly control the network’s rules. This makes Tezos not just a re-invention of the Ethereum wheel but a rather more flexible and scalable platform for implementing smart contracts. 

Tez can be considered a major crypto. By market capitalization, it ranked #19 at the time of writing. It’s availability in multiple exchange pairs and listing on major exchanges indicates that it is a popular asset among investors. 

This article will look at what it is like investing in Tez and answer questions such as is it a good investment.

What is Unique about Tezos?

One of the things that make Tezos unique is its proof-of-stake consensus. Unlike Bitcoin, consensus on the Tezos network is achieved by stakers, whose mining power depends on how much Tez they hold. Relying on this consensus mechanism might have given the crypto some resilience against the cryptocurrency bear market of 2019. Between October 2019 and February 2020, the crypto recorded triple growth. This is a remarkable movement – at the time of writing this, even Bitcoin, in its current biggest bull run yet, has not attained triple growth.

Performance in 2020

Tezos is known for euphoric investment. During its ICO launch, it raised $232 million, one of the biggest ICOs at the time. Well, in 2020, the crypto has shown similar tendencies – fluctuating between less than a dollar and $4. Such volatility has only been shown by a few cryptocurrencies. Again, we must acknowledge how large these fluctuations are. Despite the relatively low price, the percentage changes are tremendous. 

Tez was trading at roughly $1.3 at the beginning of 2020. By mid-February, it had rallied to trade at $3.7. Prices soon crashed to lows of $1.3 a month later. Between April and July, Tez demonstrated rare stability exchanging at about $2 and only fluctuating slightly. In August, the crypto experienced its largest spike of the year, and at some point, fetched a whopping $4.2 at exchanges. The prices have since dropped to $2, which so far seems like its point of equilibrium.

24-hour trading volumes for the crypto indicate drastic changes in investor activity. There was only 30 million worth of trade per day as the year opened, but by mid-February, this number had increased 10-fold. By mid-August, the volume was 20 times. Even when the prices dropped to the $1.3 figure witnessed at the start of the year, 24-hour trading volumes never declined below $70 million. 

The volume of trading exhibited by Tez shows how enthusiastic investors have been with this crypto. Coupled with its relatively high volatility, we can conclude that Tez has been the perfect asset for short-term trading, at least according to investors’ 2020 trading patterns. 

The Future of Tezos

We have seen that, due to its volatility and high trading volume, Tez performs impressively in the short term. For investors who seek to grow their investment in the long term, questions on Tez’s suitability still persist. 

Tezos had a promising start right from its introduction to the initial coin offering. As earlier mentioned, the crypto raised one of the highest amounts ever raised in a cryptocurrency ICO. The faith investors have placed on the crypto from the start indicates its potential and guarantees some level of support for its growth.

Tez has also shown tremendous resilience in the past. After the successful ICO, legal disputes delayed its launch for almost a year. Even so, when it finally launched in 2018, investors had not lost faith in the project – which can be proven by how fast it rallied to reach triple gains. Tezos’ market rank is another indicator of its resilience and aggressive growth. For a crypto that is only 2 years in the market, claiming a position among the top 20 cryptocurrencies is no mean feat.

These past indicators describe a crypto with a solid foundation, good reputation, and the community support needed for future growth.

Adoption in The Banking Sector

The network’s flexibility and scalability also imply that we will see new use cases regularly. In 2019, barely a year after Tezos was launched, BTG Pactual and Dalma Capital (both are reputable investment banks) announced that they will be using the Tezos blockchain for security token offerings (STO).

Tezos adoption in the banking sector is also likely to increase, particularly due to its security. Least Authority, an esteemed security auditing company, released a report affirming that ‘Tezos protects against chain reorganizations and selfish baking.’ Such approvals will go a long way in promoting the crypto’s adoption in the financial sector. 

Stability and Reliability

Tezos’ designers spent a lot of thought on the network’s stability. Unlike most crypto, Tezos has an advanced infrastructure that is not prone to hard forks. Users can vote on proposals to upgrade the protocol on the main blockchain. Through a process known as baking, users stake an amount of XTZ to participate in the voting process. Changes to the protocol become effective only after they have been backed by a super majority. This form of governance ensures the network is ‘built to last.’ As an investor, you will be protected from the uncertainty that comes with hard forks and the subsequent possibility of making a loss on your investment.

Is it Risky Investing in Tezos?

Cryptocurrencies are inherently risky investments. Tezos appears as a stable, secure, and well-governed blockchain. However, the currency faces the same volatility and speculation that all other cryptos face. No matter how lucrative Tezos might appear, the golden rule remains, never risk more than you can afford to lose.

Final Thoughts

Investing in Tezos can be an exciting experience – you can quickly gain or lose, and by high margins. The currency’s relatively high volatility makes it a particularly suitable asset for short term investment. In the long term, Tezos looks equally promising. It is secure, stable, and reliable. These characteristics position the crypto strategically for widespread adoption in the mainstream financial sector. The network’s immunity against hard forking is a guarantee of stability against hard fork uncertainties. While Tezos is a good investment, it is still risky due to the virtue of being a cryptocurrency. Therefore, it is best to exercise caution and avoid hype when making the decision to invest in Tezzie. 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 19 – Ether Breaks $1,300; Litecoin Skyrockets

The crypto sector was mostly green, with altcoins attempting to push up and reduce Bitcoin’s market dominance. Bitcoin is currently trading for $36,423, representing an increase of 3.85% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 9.89% on the day, while LTC gained 13.38% of its value.

Daily Crypto Sector Heat Map

4THPILLAR TECHNOLOGIES gained 441.52% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by CryptoAds Marketplace’s 221.1% and YAMv2’s 181.43% gain. On the other hand, CY Finance lost 66.83%, making it the most prominent daily loser. It is followed by Basiscoin Share’s loss of 39.38% and Trading Membership Community’s loss of 37.1%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down since our last report, with its value currently being 65.6%. This value represents a 0.5% difference to the downside when compared to the previously reported value.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has returned above the $1 trillion mark since we last reported, with its current value being $1.034 trillion. This represents a $41.3 billion increase when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin spent the day mostly trading sideways, bound by the $34,627 to the downside and $37,445 to the upside. The price hopped between these levels and created a higher high higher low pattern, which later on broke after BTC couldn’t pass its immediate resistance level.

Bitcoin’s price has created a triangle pattern on the daily chart, and breaking this triangle to the upside or downside will determine the short-term price direction.

BTC/USD 1-hour chart

Bitcoin’s technicals on all time-frames show a slight bullish tilt, with its oscillators pointing towards the sell-side.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is at both its 50-period EMA and its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (49.56)
  • Volume is average (low)

Key levels to the upside:          Key levels to the downside:

1: $37,445                             1: $34,627

2: $40,000                             2: $32,350

3: $42,000                             3: $27,960

Ethereum

Unlike Bitcoin, Ethereum has spent the day first slowly preparing for a move and then explosively pushing to the upside. The second-largest cryptocurrency by market cap has, after confirming its position above the $1,211 level, shot up towards the $1,350 level, which it was not able to break. With the volume descending after that move, ETH will most likely not be able to break $1,350 unless a new wave of bulls comes into the market.

ETH/USD 1-hour Chart

Ethereum’s 4-hour, daily, and monthly technicals are completely bullish and show no signs of neutrality or bearishness. On the other hand, its weekly overview shows some neutrality.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above both its 50-period and its 21-period EMA
  • Price is at its top Bollinger band
  • RSI has just left the overbought area (67.24)
  • Volume has spiked up in the recent hours

Key levels to the upside:          Key levels to the downside:

1: $1,350                               1: $1,211

2: $1,420                               2: $1,183.85

3: $1,450                               3: $1,060.5

Litecoin

Litecoin was one of the largest daily gainers after its price suddenly shot up from $141 all the way up to $160 in just one hourly candle. While it seemed at first like the retracement will eat away the gains LTC made, the cryptocurrency made another push towards the upside and stopped just below the $161.55 resistance level.

Litcoin’s descending volume and price movement, as well as the number of sell orders near the $161.55 level, will most likely be enough to keep LTC below the resistance level for now.

LTC/USD 1-hour Chart

Litecoin’s technicals on the 4-hour, daily, and weekly time-frame are completely bullish, while its monthly technicals are slightly more neutral.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is above both its 50-period EMA and its 21-period EMA
  • Price close to its top Bollinger band
  • RSI is neutral (66.70)
  • Volume is above average

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $114.75

Categories
Crypto

Avoid These Common Crypto Trading Mistakes

If you’re here, we’re assuming that you’re one of the countless traders who has decided to hop on the cryptocurrency train within the last few years. This isn’t surprising, as crypto trading has become more trusted and the price has reached all-time highs several times lately. There are also some bigshot names in trading that have promoted the advantages of investing in cryptocurrencies, including Tesla CEO Elon Musk. Of course, understanding how to trade cryptocurrency is just as important as understanding how NOT to trade it. If you want to be successful as a cryptocurrency trader, you’ll need to avoid these common mistakes to get the best results. 

Mistake #1: Starting with Zero Practice

Traders should always take advantage of the ability to practice trading for free on a demo account, especially if they are considering trading with a completely new asset. If you’ve never traded Bitcoin, Litecoin, or any type of cryptocurrency before, you’ll definitely want to get some practice using your trading strategy to ensure that your endeavors will be profitable. If things don’t go according to expectations, you’ll know that something needs to change without taking a hit to your wallet in the process. 

Mistake #2: Trading the Wrong Cryptocurrencies 

Bitcoin has always been the top coin that comes to mind when cryptocurrencies are mentioned, however, there are thousands of options out there. While it’s a good idea to diversify your investment portfolio with different types of assets and with a few other cryptocurrencies, be careful to avoid the least popular options. Some of the lesser-known cryptocurrencies are practically worthless, so always do your research before taking a chance with any questionable options. 

Mistake #3: Risking too Much

One of the most common beginner trader mistakes involves risking too much money in general, whether it be when trading currency pairs, cryptocurrencies, or any other asset. Most experts will tell you to limit the risk you take per trade to only a small percentage of your account balance, somewhere around 0.5% to 1%. This tip is especially helpful if you aren’t used to working with crypto options, as it will limit the amount you lose if you do make a few bad investments in the beginning. 

Mistake #4: Failing to use a Stop Loss

You should never add to a losing trade – some of the best advice for beginner traders is to set a stop loss and move on. It isn’t a good idea to keep going if a trade moves against you, and many beginners have a hard time accepting defeat when things just don’t go according to plan. 

Mistake #5: Panicking

The cryptocurrency market is no stranger to volatility, which isn’t exactly reassuring for beginner investors. Often times, the sharp swing in prices make beginners panic and sell at the wrong times. Even when prices dip low, they tend to rise again with cryptocurrencies, resulting in a loss from selling too soon. The best way to avoid this is to set a take profit and stop loss and then to leave the trade alone. 

Mistake #6: Assuming that Cheaper Coins are Better Investments

You shouldn’t assume that it’s a good idea to invest in any specific cryptocurrency solely because the price is very low at the moment. Instead of assuming that low prices will lead to profits, you should make investment choices based on evidence that the coin will perform well overall. You should always follow the news and stay updated on crypto-based developments so that these ups and downs don’t catch you by surprise. 

Mistake #7: Pump & Dump Schemes

A typical pump & dump involves investors agreeing to buy and sell a particular asset while communicating over a message board or some other type of social platform. The idea is that everyone buying at the same time will cause a spike in activity, which will help those involved to make money. Unfortunately, those that watch these conversations and attempt to sell at the right time usually miss out and wind up with a coin that has dropped in value. 

 

Categories
Crypto Daily Topic Cryptocurrencies

How to Take Advantage of Ethereum 2.0

Ethereum, the decentralized blockchain that features smart contracts, will be getting a series of upgrades that will see improved scalability, security, and sustainability. This massive upgrade will create new opportunities for investors. Apart from allowing Ethereum users to earn passively from staking, smart investors can take advantage of price changes during the launch of Ethereum 2.0 and multiply their investments. 

In this article, we will look at what is Ethereum 2.0, what investment opportunities it creates, and how you can be part of this development.

What is Etherum 2.0 All About?

Also known as Eth2, Ethereum 2.0 is fundamentally a shift from the current proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) model. In the PoW model, the generation of new blocks relies on the computing power of each node on the network that is taking part in transaction validation. On the other hand, PoS relies on virtual miners (also called validators) and Ether deposits to achieve consensus. 

Besides changing the consensus mechanism, Eth2 also introduces shard chains – a mechanism that ‘splits’ the Ethereum blockchain and shares the processing task among different nodes. This approach increases the network’s processing capability by allowing concurrent processing of transactions – a shift from the traditional sequential processing. 

While the upgrade is squarely technical, its economic and financial implications will be far-reaching. 

How Will Eth 2.0 Affect Prices?

Whenever a major event happens on certain crypto, its prices are bound to change due to increased speculation. In the wake of the anticipated Eth2 launch, upward price movements were observed. The launch was set to happen on 1st December, and a week to this launch, ETH prices had gone as high as $600. While this rally might have been due to other factors, such as the general positive sentiment on cryptocurrencies, the surge observed just a week before the event can’t be coincidental. 

Speculation aside, Eth2 is bringing improved transaction speeds and lower costs – factors likely to increase demand for the crypto. Already, exchanges are reporting declined sell pressure, which indicates that investors are not eager to sell ETH at the moment. The speed and transaction cost improvements will also automatically cascade to tokens that run on the Ethereum blockchain. This will trigger even more demand for the crypto and, thus, better prices. 

Staking in Eth 2.0

The introduction of staking in Eth2 creates a new opportunity for investors to earn by validating transactions, and this is the latest investment opportunity we would like to discuss. 

Simply put, staking in Eth2 implies depositing 32 ETH to activate validator software – the tool you will be using to process transactions. As a validator, you will have the power (and duty) to process transactions and add new blocks to the blockchain, and earn rewards while at it.

Rewards are given to validators for pushing transaction batches into new blocks and validating other validators’ work. While there are bountiful rewards in staking, you might lose ETH if you are unavailable to perform validations or if you use your stake against Eth2 validation specifications. 

How to Stake in Eth 2.0

Staking involves sending 32 ETH to the following address: 

0x00000000219ab540356cbb839cbe05303d7705fa

However, you will need to use the launchpad dedicated for this purpose. The address above is for verification purposes only. The process involves several distinct steps, summarized as follows:

  1. Review Eth2 staking agreement/ terms and conditions
    1. Sign up on the launchpad. This will involve depositing the 32 ETH.
    2. Agree that it is your responsibility to keep your validator online.
    3. Agree that you are liable to slashing (incurring a large penalty) if you act against validation specifications.
    4. Agree that you understand that your mnemonic (or seed) is the only way to access your funds and that you will keep it safe.
    5. Agree to safeguard your key stores, which will hold your keys, and provide the public keys to the launchpad site to activate your validator.
    6. Agree that you cannot transfer your staked ETH until Phase 1 and that you cannot withdraw until Phase 2.
    7. Agree that once you exit, you cannot rejoin as staking is a long-term commitment. (The completion of each phase depends on reaching a certain amount of staked ETH. Thus, withdrawals will keep extending timelines for this smart contract).
    8. Accept early adoption risks, i.e., software and design flaws that may result in the loss of your ETH.
    9. Agree that you are technically capable of configuring a validator.
  2. Select an Eth1 client that will run parallel to your Eth2 client. This is necessary to process deposit transactions coming from the Eth1 chain.
  3. Select an Eth2 client and set up a node. You can choose between Prysm, Nimbus, Lighthouse, and Teku. Nimbus is one of the most versatile as it can run even on older smartphones.
  4. Select the number of validators you would like to run and the operating system you will use. Remember, to operate each validator, you will need 64 ETH.
  5. Upload the validator which you downloaded/ built from the previous step.
  6. Finally, connect your wallet.

While staking in Eth2 is quite technical, especially for the average user, a comprehensive step-by-step guide is provided on the Ethereum launchpad website. It is also worth acknowledging the thoroughness with which the documentation was put together by the Eth2 team to guide potential validators. If you use this guide, you are unlikely to get stuck simply due to technical difficulty. 

Is Eth 2.0 Staking a Good Idea?

Staking in Eth2 is a double-edged sword – it comes with both benefits and risks. When you commit your ETH to the staking contract, you are almost guaranteed returns just from staking. However, returns are highly variable. In fact, it is impossible to tell how much you can earn by staking a fixed amount of ETH until you actually receive the reward. Even so, if you stake and consistently participate in validation, you will get rewarded. 

Secondly, staking means locking your ETH to the network for some time, without the possibility of withdrawing it at least until Phase 1.5. This is akin to depositing with a fixed account, whose interest can be compared to the growth of ETH in the near future. 

While staking is a good way to earn from Eth2, you might want to consider the following risks:

  • Staking is a one-way deposit. ETH you send to the contract address cannot be withdrawn until an unknown future date (this is until Phase 1.5 of the upgrade is reached).
  • Profits you earn from staking also remain staked until this unknown future date.
  • Validation is a responsibility that all stakers must undertake. By being offline, you will lose as much as you would have earned if you were available for validation.

Final Thoughts

The coming of Eth2 brings with it exciting investment opportunities. Other than the traditional trading and HODLing, Eth2 allows you to commit some funds to the network and join other validators and earn exclusive rewards from it. Risks, including early-adoption software bugs and slashing due to being offline, exist. However, all considered, staking is a worthy venture that ETH investors should consider. 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 18 – Bitcoin Drops During the Weekend, ETH Remains Strong

The crypto sector spent the weekend in a mostly descending fashion, with BTC continuing its short-term downtrend. Bitcoin is currently trading for $35,258, representing an increase of 0.14% compared to yesterday’s value. Meanwhile, Ethereum’s price has decreased by 0.39% on the day, while LTC lost 0.46% of its value.

Daily Crypto Sector Heat Map

Astosch gained 285.95% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by ALL BEST ICO’s 273.67% and Yeld Finance’s 264.65% gain. On the other hand, Bestay lost 87%, making it the most prominent daily loser. It is followed by Zugacoin’s loss of 85.51% and VKF Platform’s loss of 77.77%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down since our last report, with its value currently being 66.1%. This value represents a 2.3% difference to the downside when compared to the previously reported value.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has dropped below the $1 trillion mark since we last reported, with its current value being $993.33 billion. This represents a $43.67 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin spent the weekend following the downtrend it started on Jan 14, with its price slowly declining from a high of $39,600 to a low of $33,833. During the downtrend, the price has contested and broken the $36,640 level to the downside and looks like it will contest the $33,200 level in the near future. BTC is currently trading at a little above $35,000, representing a weekly loss of 6.09% and a monthly gain of 29.87%.

Bitcoin’s price has responded well to the 21-day moving average and found very strong support there. Staying above this level will be crucial if BTC wants to turn to the upside.

BTC/USD 1-hour chart

Bitcoin’s technicals on the daily, weekly, and monthly time-frame are completely bullish and show no neutral or bearish signs. On the other hand, its 4-hour overview is completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is slightly below its 50-period EMA and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (43.00)
  • Volume is descending

Key levels to the upside:          Key levels to the downside:

1: $36,640                             1: $33,200

2: $40,000                             2: $30,640

3: $42,000                             3: $27,960

Ethereum

Unlike Bitcoin, Ethereum’s weekend was not spent in a downfall. The second-largest cryptocurrency by market cap headed towards the $1,300 level but failed to break it, which prompted a weekend of sideways trading. While ETH did break the $1,211 level to the downside, the $1,183.85 level held up. Ether is currently trading in a very narrow range, bound by the aforementioned levels.

ETH’s short-term movement will greatly depend on two factors: Bitcoin’s volatility and Ether itself, breaking its immediate support or resistance levels.

ETH/USD 1-hour Chart

Ethereum’s technicals all time-frames are tilted towards the buy-side, with the 4-hour, daily, and weekly overviews fully pointing towards the buy-side. Its monthly overview, however, has oscillators pointing towards neutrality.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is slightly below its 50-period and its 21-period EMA
  • Price is between its middle and bottom Bollinger band
  • RSI is neutral (43.72)
  • Volume is slightly below average

Key levels to the upside:          Key levels to the downside:

1: $1,211                               1: $1,183.85

2: $1,255                               2: $1,060.5

3: $1,350                               3: $1,047.5

Litecoin

Litecoin mirrored Bitcoin’s movements over the weekend, stepping into a downtrend that started on Jan 14, after Litecoin couldn’t push its price to $160. The price is currently fighting for the $142.1 level, which it has recently broken to the downside.

While Litecoin’s movements seem to mirror Bitcoin’s, its volume remains stable despite Bitcoin’s volume dropping. At the moment, LTC might be a better choice for people that want to be less affected by Bitcoin’s volatility.

LTC/USD 1-hour Chart

Litecoin’s technicals on the daily, weekly, and monthly time-frame are completely bullish and show no neutral or bearish signs (though they are slightly less bullish than Bitcoin’s overviews). On the other hand, its 4-hour overview is completely bearish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly below its 50-period EMA and its 21-period EMA
  • Price close to its bottom Bollinger band
  • RSI is neutral (42.47)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $142.1                               1: $128.42

2: $161.5                               2: $114.75

3: $181.3                               3: $97.8

Categories
Crypto Videos

Is Bitcoin sucking the life out of the Forex market?


Is Bitcoin sucking the life out of the Forex market?

Thank you for joining this forex academy educational video.

In this session, we will be asking if bitcoin is having a negative impact on the forex market by reducing the volume of transactions?

In this daily chart of bitcoin to the US dollar, it was only back in October that we reported that bitcoin had found a support line at 10000, and at the time of writing, we suggested there could be a surge up to and above 12,000 by the end of 2020. A retest of the previous high in 2017 around the 19,500 level, shown here at position B, would have then been on the cards.

Here we can see a somewhat muted pullback to position C, but the 2017 crash to the 3,000 level was not repeated, and the price went on to find support above the key 20K exchange rate.

The acceleration during position d up to 42000 was a purely speculative fuelled bull run,  where most of this move can be put down to companies such as PayPal, the CME  clambering balls, the bitcoin euphoria bandwagon, and countries such as Switzerland  opening its arms too to companies in the bitcoin space.  These factors only go to legitimise bitcoin’s space in the investment market arena and where it has called a modern-day gold Rush with day traders in a spare room buying on the CFDs market, hedge funds, and banks and other institutions clamouring aboard the bull run in fear of missing out.

A potential side effect of this incredible move higher and interest in the bitcoin space may well be the reason why the currency markets seem to be flattening out. Certainly, cable,  seen here with its recent top of 1.3700, since leaving the European Union with an eagerly anticipated free trade agreements in place,  has flatlined since the beginning of January.  And while some of this might be attributed to the increased rates of Covid spreading through the United Kingdom, one has to wonder if some traders in the forex space are throwing caution to the wind to buy bitcoins while side-lining currencies.

The flatlining of the cable exchange rate also coincides with the most volatile period of buying activity for bitcoin, and this period is also reflected in this one-hour chart of the US dollar to Japanese yen, which is also trading within a fairly narrow range of just 146 pips during a similar timeline.

Again, this is repeated with the euro US dollar pair over the same timeline price is relatively flat and consolidating within a fairly narrow 145 pip range.

The similarity between the timelines of activity and flattening with the forex pairs while exponential growth in bitcoin to the upside cannot be ignored.  However, is this trend, if based on our hypostasis correct, likely to continue?

It is completely natural for professional traders to bail out of one asset class a jump into another if they see potential to make money.  This is what training is all about recognising opportunities and jumping aboard.

Before we consider if this is likely to continue, let’s go back to our bitcoin US dollar daily chart, where we have highlighted the most recent candlestick.

This one single daily candlestick on the 7th of January shows a range between 42,000 at the top and 36,500 at the bottom, which is a huge 5,500 dollar move in a single date.

If institutional or retail traders get it wrong, the consequences can be grave, with enormous losses piling up. The problem at these levels is that traders will be wondering if this incredible bull run has reached the top of the market and is due for a crash, with memories going back to 2017 where bitcoin to the dollar crashed from 19,500 to just above 3000 in a short space of time.  Here we are seeing swings of over 5,000 points in a single day,  which is unnerving,  making it dangerous to trade. 

And this is why many investors in bitcoin will be dubious about buying at the current levels, which might see some inflows back into the forex currency space, with other investors In digital currencies looking for more opportunities with potential for long-term growth.

PLEASE LINK https://www.youtube.com/watch?v=GEtlPyBDU3g

A few months ago, we reported on a new digital coin with its own ecosystem: the AXIA Coin, which might be a front runner for alternative investments in digital currencies.  We understand that the company is close to launching, so please watch out for updates, which we will bring you soon. Meanwhile, you can find more details about the AXIA coin at www.axiacoin.org.  

 Meanwhile, watch out for extra volume creeping into the forex space, causing currencies to break from their current consolidation trends, as we have demonstrated here.

Categories
Crypto Daily Topic

What is coin burning all about?

The crypto adoption juggernaut rolls full steam ahead. You need only look at the increasing number of outlets accepting crypto payments to prove this. Even governments that once approached them with cynicism have caught on to the act. The big migration to CBDCs is now a matter of time.

Whereas the growing acceptance is positive, it comes with its misgivings. Although the proliferation of coins and tokens expands choices, it raises concern about sustaining cryptos’ value within the cryptosphere.

Cryptos are good at mitigating inflation, but they’re not immune to it. Crypto projects have had to devise the means of controlling this. As such, coin burns have been the tool of choice. But what are coin burns? How does one execute them? Importantly what is their value? Stick around as we go deep into the subject. 

What Is Coin Burning?

Coin burning is the process of removing a set volume of cryptos from circulation.  In doing so, developers and miners reduce their total supply. 

Eater Addresses/ Blackholes

Coin burning entails sending cryptos to public addresses with unobtainable private keys. Also known as eater addresses or blackholes, these addresses render the coins useless. Nevertheless, they allow for their public viewing and peer verification on the blockchain.

Coin Burning Varies With The Project

Depending on the frequency of the coin burning process, we can classify it into two broad categories:

  • One time burns – are one-off coin burns popularly embraced by  ICO projects to clean the market of unsold coins.
  • Periodic Burns- these are undertaken repeatedly at either fixed or varying intervals; Binance holds quarterly coin burns while Tether does so per withdrawal or collection

What are The Approaches to Coin Burning?

There are two major approaches to coin burning. These are:

  • Mechanisms relating to the token’s blockchain protocol
  • Mechanisms driven by economic sense

Protocol Related Mechanisms

In this category, we have coin burning mechanisms embedded in the project’s core protocol layer. We may divide these into two main groups.

  • Proof of Burn Mechanisms
  • Anti Spam mechanisms
i) Proof of Burn Mechanisms

These use the  Proof of Burn (PoB) consensus that requires miners to prove that they’ve burnt some of their coins. PoB has several variants:

  • Burning Native Coins for Mining Rights- miners must burn some of their coins to acquire block mining rights;  an example is Slimcoin.
  • Burning Bitcoins to Create New Native Coins- projects like  Counterparty (XCP) use PoB that burns BTC in exchange for a similar value of coins in the native currency, XCP
  • Burn-And-Mint Equilibrium: an advanced version of PoB used by  Factom (FCT) that burns native tokens in return for Entry Credits for storing data on its blockchain
ii) Anti Spamming Mechanisms

Introducing a cost to transactions prevents spamming and DDOS attacks that compromise the network. Projects like  Ripple (XRP) and Request Network (REQ) integrate a burning mechanism for every transaction on their network. Though indirectly, their Users ‘incur’ the cost of trading on them. The ecosystem gains in value resulting from a reduced supply of native coins. 

Mechanisms Driven By Economic Sense

These are mechanisms informed by a project’s economic considerations. They may be one-offs or periodic.

i) Mopping up of The Unsold ICO Tokens

At times ICOs fail to meet their hardcaps. Consequently, remain with unsold tokens. The projects may decide to destroy these to maintain their credibility.

ii) Paying out Dividends to the Coin Holders

Profitable projects may use their profits in buying back their native coins from the public. They then destroy the repurchased coins, thus paying them some dividend, which increases the value to coin holders.

What are the Steps Followed in a Coin Burning Event?

The coin burning event follows a sequence of four steps. Here’s its breakdown:

  • Institution of the burn function- the coin holder starts by calling the burn function, indicating the number of coins they intend to burn.
  • Verification of the coins  for burning- The contract proceeds to determine the ownership and validity of the selected coins, considers positive numbers only
  • Abortion of the burn function- The process aborts if the instigator has fewer coins or uses a negative value or zero.
  • Execution of the Burn function- the smart contract withdraws  the sums from the instigator’s wallet, permanently cutting them from circulation 

Why do Crypto Project’s Institute Coin Burns?

You’d think that coin burning is beneficial. Wouldn’t you? After all, you have Key players like Binance and Tether performing them. What then are its benefits

i) Appreciation in the Crypto’s Value

Cryptos are decentralized. In essence, market forces determine their prices. Coin burning depletes the sum of coins serving the market. As a result, their value rises to attain equilibrium. The attainment of market equilibrium is essential in stabilizing the price(value) of the crypto.

ii) Ensuring Network Stability

As stated elsewhere in this article, coin burning is key to eliminating Spam and DDOS. Accordingly, the network becomes stable.

iii) To Mop Up The Unsold Tokens From an ICO or Token sale

Crypto projects initiate ICOs to get public buy-in. Towards these, they set aside a certain percentage of the coins hoping that the investors will acquire the whole lot. However, things don’t always go that way, resulting in a remnant of those coins.

iv) Winning Investors’ Trust

The token insurer burns the coins remaining unsold from the ICO. They do this to ensure a level playing field for all investors. Were the issuer to keep the unsold coins, they’d have a massive advantage over other investors. Coin burning helps win the trust of other investors and incentivizes their stay within the project. 

A case in point is the Neblio cryptocurrency. Its team burned 122 million tokens that remained from their ICO. It sent them to an unspendable NEBL address.

v) Correcting Errors in Coin Issuance

At times projects realize errors in the creation of their tokens or coins. As such, they turn to coin burns to remedy this situation. A case in mind is Tether. The company realized that it had erroneously produced $ 5 Billion USDT. It resorted to a coin burn to maintain its 1:1 peg to the USD. Allowing the extra coins to stand would have destabilized the ratio.

vi) Guaranteeing The Developers’ Commitment to the Project

Coin burning signals the Developers’ commitment to the project. Look at it this way: the coin burn reduces their supply. At the same time, it increases the value of the coin or token in question. Burning is indicative of the developers’ desire to see the project grow in value and network function.

vii) Reduction of The Competition Between Miners

The Proof of Burn (PoW)  consensus is a popular offshoot of coin burning. Through it, a user destroys their coins to gain mining rights.

Managing Mining

PoB matches the number of blocks a miner can verify to the volume of coins they burn. This way, one’s mining ability increases with increased burning. Thus it reduces the number of miners and competition for resources between them.

Leveling the Playing Field Through Decay Rates

Since PoB favors the large-scale miner, they employ decay rates. This feature reduces one’s mining capacity with every verification. For them to remain profitable, it compels them to invest in more tokens to burn.

Final Thoughts

Although touted as the fix against inflation, cryptos aren’t immune to the same. Consequently, projects have had to find ways of guarding against it. Their default method has been the institution of coin burning: the deliberate removal of a given amount of coins from the market. It may be a one-off event or a periodic undertaking. Additionally, it could be a procedure hardwired into the project’s core protocol layer or driven by economic consideration. Whatever the cause, coin burning is an essential undertaking that, among other positives, infuses stability and confidence in any crypto project.

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 15 – Bitcoin Retraces After Hitting $40k; Ethereum Contests $1.2k

The crypto sector was mostly stable in the past 24 hours, as most cryptocurrencies were trying to find their top or retraced slightly. Bitcoin is currently trading for $37,766, representing a decrease of 0.42% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 5.98% on the day, while LTC gained 0.33% of its value.

Daily Crypto Sector Heat Map

FastSwap gained 244.13% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by HedgeTrade’s 225.26% and Capital.Finance’s 145.48% gain. On the other hand, Zugacoin lost 87.51%, making it the most prominent daily loser. It is followed by Roti Bank Coin’s loss of 77.52% and BitiPro Exchange Token’s loss of 74.35%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved down slightly since our last report, with its value currently being 68.4%. This value represents a 0.6% difference to the downside when compared to the previously reported value.

Weekly Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has made negligible gains since we last reported, with its current value being $1.037 trillion. This represents a $5 billion increase when compared to our previous report.

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What happened in the past 24 hours?

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Technical analysis

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Bitcoin

Bitcoin has ended its uptrend by hitting a high of $40,112 yesterday, prompting a slight pullback. The pullback was, just like the price increase, happening on low volume and had the same intensity as well. The only differentiating factor was its direction. The move to the downside ended with BTC’s price hitting the 50-hour moving average and pushing up.

Bitcoin has a couple of strong resistance lines to the upside, one being the immediate 21-hour EMA, and then the $40,000 and ultimately $42,000 levels. On the other hand, its support is guarded by the 50-hour EMA and the $36,640 level.

BTC/USD 1-hour chart

Bitcoin’s technicals on the daily and monthly time-frame are overall bullish but have oscillators pointing to the sell-side. On the other hand, its 4-hour and weekly overviews are completely bullish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is between its 50-period EMA and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (50.19)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $40,000                             1: $36,640

2: $42,000                             2: $33,200

3: $43,600                             3: $30,640

Ethereum

Ethereum’s push to the upside has, just like with Bitcoin, seemingly ended. However, its pullback hasn’t started at all, as its price kept fluctuating between the recently $1,183.85 support level and the recent high. Trading in such a narrow range is not sustainable, and ETH will break either to the upside or downside very soon.

ETH traders can finally catch a nice trade as the cryptocurrency has (at least a bit) moved in a different manner than Bitcoin. Ether’s upside is guarded by the heavy resistance zone slightly below $1,300 as well as the $1,350 level. Its downside has smaller support levels, some of them being $1,211, $1,183.85, as well as the 21-hour and 50-hour EMAs.

ETH/USD 1-hour Chart

Ethereum’s technicals on the 4-hour and daily time-frames are overall bullish but have oscillators pointing to the sell-side. On the other hand, its weekly and monthly overviews are completely bullish.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above its 50-period and at its 21-period EMA
  • Price is near its top Bollinger band
  • RSI is neutral (61.37)
  • Volume is slightly below average

Key levels to the upside:          Key levels to the downside:

1: $1,255                               1: $1,211

2: $1,350                               2: $1,183.85

3: $1,419                               3: $1,060.5

Litecoin

Litecoin continued trading within its range, bound by $142.1 to the downside and $161.5 to the upside. Its price is now also between the 21-hour and the 50-hour EMAs, which have proven to be strong support and resistance levels, especially when paired with low trading volume.

Litecoin is currently mirroring the direction of Bitcoin’s moves, but with much less intensity. This makes it a very unattractive trading pair at the moment.

LTC/USD 1-hour Chart

Litecoin’s technicals on all time-frames are completely bullish and without any signs of neutrality.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly above its 50-period EMA and at its 21-period EMA
  • Price at its middle Bollinger band
  • RSI is neutral (53.10)
  • Volume is descending

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $114.75

Categories
Crypto Videos

Bitcoin Price Dump Shakes Investors!

Bitcoin price dump! was the writing on the wall?

Thank you for joining this Forex Academy educational video.

In this session, we will be looking at the recent bitcoin US dollar price dump and what might have been the possible contributing factors.

In this daily chart of bitcoin to the US dollar, we can see a steady bull run, as highlighted in section A, with a critical area of support on the $10 k line, which lends itself nicely for a price action move up to the resistance line, which was breached in section B, which coincides with the all-time high of around $19.5K from 2017, and where eventually price reaches the key $20K figure, and from there on over the Christmas period and into the new year, we see exponential growth, where bitcoin skyrockets to $42k.
With market analysts and investors talking up the value of bitcoin from anywhere in the region of $30 to 40K and even 140k, it’s hardly surprising that euphoria crept in and where everybody was buying, especially in the CFDs market.
This was a gold rush in all but name. And one has to ask oneself a question; when assets are being talked up by investors, or even talked down, what are the real motives behind this? Are they simply looking for a market reaction in favour of their own investment strategy, for example? This is a question for another day.
Getting back to the issue, was the writing on the wall all for a price collapse? Yes, it was, and for a number of reasons:
Firstly, when a market is moving steadily as in a trend, it is less likely to see extreme volatility unless there are fundamental reasons behind it. And because bitcoin is essentially a speculative instrument, fundamentals can be set aside in favour of a trending market.

The problem with this, as highlighted here, is that this is unchartered territory. We are looking at a $20,000 price increase in just a few days, which is almost unheard of. Technical analysis becomes difficult to gauge, and professional traders don’t know where to get in on the trend or place stops. Many are forced into buying for fear of missing out, and this is extremely dangerous.

Certainly, the writing was on the wall when on the 4th of January, we see a $6K price range move on this bearish daily candlestick. However, volatility continued with the bulls regaining control taking bitcoin to a record high of around $42,000.
Professional traders will know from history that a correction was on the cards, and with the UK FCA warning retail traders about the potential of losing all of their money trading bitcoin assets, it very likely contributed to price action hitting a brick wall all and to the collapsed….

Of around $12K in 24 hours. Many investors and retail traders were still buying well above $40,000, while the price was tanking, causing billions of dollars to be wiped off of the price, and where billions were lost in margin calls, with accounts being liquidated, because of the massive move lower.
Bitcoin should have a health warning on it, buyer beware, and with more and more weekend traders getting involved in this market, which operates 7 days a week, and where these part-time traders in there are spare rooms have a punt, with many losing their cash deposits, it is not a surprise that the FCA have banned retail traders from trading cryptocurrencies in the UK from the 6th of January this year, and where the EU are now calling for tighter regulation in this space.
Weekend bitcoin traders will be licking their wounds. But let’s not forget that a lot of people are still in the money and sitting back waiting to see if the price steadies itself and then continues to move higher, or if it will continue to slide.
Advice on this one would be too to look at trends on lower time frames…..

Such as this one-hour chart, while looking for support and resistance lines, and pick out trends that are set by big money investors, such as institutional traders, where they typically operate Monday to Friday. Be ultra-cautious when going long during aggressive rallies and around huge candlesticks, especially the bearish ones, as highlighted, which represents an overall move of $4000 dollars. They spell out danger. And set tight stop losses.

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 14 – Bitcoin Records Double-Digit Gains as it Passes $38K; Crypto Market in the Green

The crypto sector ended up almost completely in the green as Bitcoin recorded double-digit gains and pulled the rest of the market up. Bitcoin is currently trading for $38,222, representing an increase of 11.05% compared to yesterday’s value. Meanwhile, Ethereum’s price has increased by 9.00% on the day, while LTC gained 6.48% of its value.

Daily Crypto Sector Heat Map

Simbcoin gained 366.72% in the past 24 hours, making it the most prominent daily crypto gainer by far. It is followed by Penta’s 229.88% and DEX’s 187.13% gain. On the other hand, Daiquilibrium lost 88.91%, making it the most prominent daily loser. It is followed by Dynamic Supply Tracker’s loss of 80.15% and Dynamic Supply’s loss of 63.83%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has moved up slightly since our last report, with its value currently being 69%. This value represents a 0.4% difference to the upside when compared to the previously reported value.

Daily Crypto Market Cap Chart

The cryptocurrency sector’s market capitalization has made significant gains since we last reported, with its current value being $1.032 trillion. This represents an $88.3 billion increase when compared to our previous report.

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What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin had started changing its price direction on Jan 13, when it started to slowly push towards the upside. The largest cryptocurrency by market cap managed to pass the $36,640 level and reach as high as $38,789 before pulling back slightly. This steady price increase was followed by average (or even slightly descending) volume.

The pullback BTC went into after hitting the recent high was quickly stopped by the 21-hour and 50-hour EMAs, changing the overall stance from an expected downturn to uncertainty.

BTC/USD 1-hour chart

Bitcoin’s technicals on the 4-hour, daily and monthly time-frame are overall bullish, with oscillators pointing to the sell-side. On the other hand, its weekly overview is completely bullish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Price is above both its 50-period EMA and its 21-period EMA
  • Price is between its middle and top Bollinger band
  • RSI is neutral (62.38)
  • Volume is average

Key levels to the upside:          Key levels to the downside:

1: $40,000                             1: $36,640

2: $42,000                             2: $33,200

3: $43,600                             3: $30,640

Ethereum

Ethereum’s period of heavy correlation with Bitcoin has continued as its price slowly gained momentum towards the upside. Ether managed to push its price to the $1,183.85 level but couldn’t quite break it. This caused a minor pullback, which ended very quickly.

Ethereum’s 21-hour and 50-hour EMAs play a significant role in determining its price direction and should be considered by the traders at all times. On top of that, any ETH trader should pay attention to BTC’s movements, as those ultimately determine the price direction of most cryptocurrencies.

ETH/USD 1-hour Chart

Ethereum’s technicals on the daily and weekly time-frame are currently completely bullish, while its 4-hour and monthly overviews show some signs of neutrality.

ETH/USD 1-day Technicals

Technical Factors (1-hour Chart):

  • Price is above both its 50-period and its 21-period EMA
  • Price is near its top Bollinger band
  • RSI is neutral (64.19)
  • Volume is slightly below average

Key levels to the upside:          Key levels to the downside:

1: $1,183.85                          1: $1,060.5

2: $1,211                               2: $1,047.5

3: $1,226.5                            3: $992

Litecoin

While Litecoin did follow Bitcoin’s price direction, it did so with much less conviction and intensity. Its price managed to pass the $142.1 level to the upside and establish its price above it but failed to move into the upper half of the trading range bound by $142.1 to the downside and $161.5 to the upside.

Litecoin currently has a very nicely-built support zone, while its upside is quite open. If Bitcoin’s price remains the same, traders can expect LTC to try to push towards or even contest the $161.5 level.

LTC/USD 1-hour Chart

Litecoin’s technicals on the shorter time-frames (4-hour, daily, and weekly) show overall tilt to the buy-side with hints of neutrality. Its monthly time-frame, however, is completely bullish.

LTC/USD 1-day Technicals

Technical factors (1-hour Chart):

  • Its price is slightly above its 50-period EMA and its 21-period EMA
  • Price slightly above its middle Bollinger band
  • RSI is neutral (57.08)
  • Volume is descending

Key levels to the upside:          Key levels to the downside:

1: $161.5                               1: $142.1

2: $181.3                               2: $128.42

3: $186.3                               3: $114.75

Categories
Forex Daily Topic Forex System Design

Trading System design – Basic Concepts

In previous articles, we explained the importance of a plan to succeed in Forex and described its general features. In this article, we will describe the concepts that need to be considered when designing a trading system.

A trading strategy is what most traders call a trading system, but it is not. A trading strategy is just a set of loose rules discretionary traders use to trade. A trading system is a set of closed rules used to systematically trade the market, usually through a computer EA, although a disciplined trader could also use it.

Traders, especially novice traders, get emotional and lose money because their emotions interfere and stop making rational decisions in the battle’s heat. Thus, the first thing to avoid is discretionary trading. Please read the article Know the Two Systems Operating inside Your