BTC Wedge Broke to the Upside - Long-term BTC Analysis Oct 16, 2018

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A week ago, I said it looked as if BTC would break the long-term wedge to the upside. After a preliminary pull-back, this break occurred with significant volume.

What interests me about this break was not the day-trader potential, but rather that this break holds a higher likelihood of going somewhere. As a long-term investor, it is kind of meaningless if our strategy devolves into swing trading monthly spikes, (though it's worth considering and is something I do occasionally since I have the time).

For investing, we want to find those transitional periods where we are buying at the bottom, and holding on a while for the long-term market increases.

Furthermore, this breaking of the wedge came with market enthusiasm as it went up 20% in a day. Normally, I really do not like trading wedges, but in this instance it gives the entire market a visible sign that is psychological where people think, "perhaps the bear market is over?" Even for people not seeing the wedge I outlined, this part of the market is visually appealing for investors. Declines have hit, been repeatedly unable to break the 5,800/6k level, and now we have a price spike as if there is accumulation to the point we may be seeing the market tendency to be bullish rather than bearish.

Market Entering a New Phase

I do not believe this is a pop and drop situation we are looking at. Sure, at the very least, this indicates a general market increase going into December, perhaps January. But beyond this, this simple movement, to me indicates that a shift has probably occurred. A shift concerning what assumptions the general market will be using going forward. Our assumption should be this is the early stages of a bull market, until we see indications otherwise. This manner of assumption is the safest and most likely assumption from how the market has behaved, and how cryptocurrency works in general.

Top Picks

These are the projects I like going forward:

  • BTC
  • XRP
  • EOS
  • STEEM (later stages of whatever rally we get, not best for early stages)
  • DASH (need to do research, I think it is still solid, but time needs to be done to verify)
  • Stellar (I like them because they've bribed me with giving me free XLM, and I got so much free XLM that when they have been increasing in price, their coin is actually worth something.)

Sidenotes

I no longer suggest NavCoin as a decent investment. It probably still is because it seems the dev team is still pushing forward, but NavCoin seems to have abandoned Anon Smart Contracts, and this was the primary reason I liked them in 2017. NavCoin right now is ranked 190 at $23 million. Very likely, if this is the bull market, then the middle and late stages of such a bull market could see NavCoin at anywhere from $50 mil to $400 mil market cap, which is anywhere from a 2X to 20X. Such an increase would follow as the natural result of bitcoin increasing in price, which eventually feeds down into the sub-100 ranked altcoins. Just the fact they have a development team, a website, ect, often results in these sort of increases. Me not suggesting it, does not mean it wont do amazingly well. 20X would be very decent if that happened.

Strategy

The strategy is simple:

  • BTC gets most of the initial blast, probably does 3 stage rallies.
  • Along-with and following BTC moves, the tier-1 altcoins move (XRP, Dash, Stellar, EOS)
  • Tier-2 coins move (overlooked is Steem, it doesn't work like a tier 2 coin)
  • Tier-3 down into the lower grade altcoins move, but usually only move significantly AFTER much price appreciation has hit the top coins, so a solid play would be to BTC or EOS first, down into the lower coins after these increase in price

EOS Projects

2019 could be the year of EOS projects being hyped big time. If this is the end of the bear market, then ultimately this means after tier-1 coins rally, and EOS projects start getting looked into more, I expect some EOS projects to rally on all the hype.

There could be legit 10X to 100X EOS projects from 2019 into 2020, so long as this proves to be the beginning of the bull market.

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Thanks for this encouraging article. I have upvoted and resteemed.
Do you trade Steem in this fashion. I would be interested in your analysis of the Steem chart.
Thanks

Sounds legit. I'm all in on TRX - best overall technology in combination with PR.

I still think it's too early to call BTC a breakout. The buy stops got crushed, it was met with significant selling. I think we need a stronger showing before getting long. I wrote about my concerns here a couple of days ago.

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I'm not a day trader. But thanks for the input, will definitely read this article. :) I don't have to see the volume to predict it's there, because I'm predicting a month or more out. It's not possible to see the volume for what I'm trying to do. It's a prediction about mental sentiments of individuals, in advance of them making decisions that would feed into technical analysis.

Still the prices are holding good but USDT manipulations is at its peak

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USDT is interesting. My guess is they have less than a 1 for 1 reserve, but the entire US economy operates on something like a 30% reserve (last I knew), so if Tether is running a 90% reserve I could see why they would never want to share this. But then also, a 90% reserve is unlikely to bust, ever.

https://cointelegraph.com/news/untethered-the-history-of-stablecoin-tether-and-how-it-has-lost-its-1-peg

So at that point it's a question of what their reserve is, and whether it's viable. Since they make money doing this, and it's a legit business model to offer a 1:1 peg, their economic interest would be not to go full ponzi and take the money and run. I would wager it stabilizes, news articles by crypto people tend to over-emphasize issues. And the USDT drop is a simple by-product of the bank deposits not being accepted.

Bank deposits getting no longer accepted by Tether, are usually because whatever country the bank deposits were being sent to, decides that there might be "money laundering" or some other unfair classification of crypto applied to the money, and so they freeze the funds presently in that bank, and so Tether stops deposits. Because the money would be stuck there. This does cause a temporary price drop due to loss of confidence in the system. It's likely caused by people who buy tether to exchange it into fiat so they earn arbitrage, they are assigning a higher risk value to the exchange so they lower the level they are willing to buy at.

And it's worth wondering and discussing as to whether Steem will begin to behave differently going forward, in terms of trading and whatnot. Part of the reason it does so poorly is that has been a used coin, rather than an investment coin no one uses. In the long-run, actually being used should benefit the price greatly. In the short-term, there are more people willing to dump it, which is always a barrier to price appreciation. Have we unloaded enough whales to see Steem actually behave like a tier-2 coin???

Steem is in the running to win a listing on the netcoins cryptocurrency ATM network. The webpage says they have over 149,000 retail outlets worldwide. @ned wrote a post promoting Steemit user involvement in the vote. Do you have an opinion about Netcoins and what this listing would mean to us? I have the links on my blog.
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It's nice but ATM integration is not what drives any cryptocurrency coin. Long-term such a thing would be nice since it in theory promotes wider adoption and use. But realistically, crypto is not viable as a currency for ATM's at present, or likely anytime within the next 10 years (in the US). As a currency, crypto is only slightly more convenient in certain countries where inflation is high and the local money is not trusted.

Crypto functions really nice as a worldwide currency accountability system, whereby if any countries get too ridiculous, the locals start favoring crypto. But like in the US, we'd never want it because having a predictable amount of inflation annually, is better than 300% increases followed by 50% declines in currency value.

But if STEEM gets the ATM selection, it could cause a temporary pop, it's not going to be the factor to drive it to $10 USD, though.

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Thank you for your thoughtful analysis, I appreciate it.

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Hi Ted

I would be really interested to hear your thoughts on recent price action on Musicoin in Bittrex. It appears there has been accumulation recently with two big bursts of volume? https://bittrex.com/Market/Index?MarketName=BTC-MUSIC Many thanks