August 19, 2018   Market Update

August 19, 2018 Market Update

Over the past week, the digital asset market found some support near the November 2017 lows.  The 190 billion area will now serve as the line in the sand. The blockchain market consolidated between the 190 and 227 billion levels and the 210 area is working like the pivot point where funds and manage money are switching from longs and shorts.  The black lines give wider bands based on the past weeks volatility and can serve as new targets over time both on the upside and downside.

 

Total Market Cap   August 13th – 20th

 

One week does not make a trend, but I did take note that on this small rally, Bitcoin market share or Dominance, did decrease a few tenths of a percent.  As I have mentioned in many of my past pieces, BTC Dominance will need to decrease significantly for a sustainable broad-based rally.

Watching key pairs is one of the ways that I have found to be most useful in monitoring BTC market share.  I am also including a $PAC chart vs. BTC to show the similarities

BTC-ETH

BTC-LTC

BTC-DOGE

BTC – $PAC

These are the one week charts.

 

 

 

 

 

In all, for assets the increase in the dollar value outpaced the gain vs. BTC.  This is an important first step if the downward trend in the cryptocurrency markets is changing.  Broad-based rallies will start with the largest cap assets and filter to the medium and smaller sized projects.  This creates higher volatility on both the upside and the downside.

Along with the Bitcoin pairings of digital assets that I follow. These pairings have been important to see how an asset is trading in other pairings not named Bitcoin.  The chart patterns will most likely very different than the Bitcoin pairing.

Since Bitcoin and blockchain became part of the world a decade ago, this asset class has changed dramatically.  I tend to think of BTC, LTC and DOGE as very early entrants to the market. This is also why they are among the most active pairs on exchanges.  They literally are currencies. They hold a value and can be readily exchanged for another currency and in many cases to the US Dollars or the local currency of your choice.When one is an owner of Bitcoin, Litecoin or Dogecoin, they do not expect a yield, nor do they really own a part of the business.  Just as when I exchange Dollars for Euros on the CME or at a local currency exchange, I am simply trading one for another based on a value calculated by the trading algorithms.

In more recent years, companies have issued currencies as a way to raise capital.  Investors can participate in the companies success by purchasing these currencies and if the project shows positive momentum, the companies coins will appreciate in value.

This has allowed smaller number of investors to participate in a venture capital style of investing.  This is a positive and a negative. Many reasons exist why Fund’s, venture capitalists and Private Equity generally cater to accredited investors.  These investors have extra capital on their balance sheets. The three investment types listed above have a high degree of risk, and large amounts of start investing ends with a negative yield.  The major difference is the private shares in the business are not traded on exchanges; and hence, they have very binary returns either performing with parabolic returns or heading towards zero.

 

The story and coin that I would like to highlight and close on a positive note is that of a coin which came to market last summer and has been one of the best performers over that period and has a positive return year to date in 2018.

 

The project is Binance, which is now also one of the top volume exchanges day in and day out. This is their chart since inception

 

 

In August of 2017, an investor could have purchased 10,000 coins for $1,000.  I notate the BTC exchange rate in the charts for comparison. These same 10,000 coins today have a value of $96,800.

Another highlight is the positive return year to date in 2018.  Binance is up more than 23% since the beginning of the year. This is a very strong statement for the cryptocurrency market overall.

Many of the G2 and G3 digital assets are businesses as well as ways to store wealth.  In down markets often times investors throw the towel in on everything and tremendous opportunities present themselves.  I believe the present day is a time of great opportunity as many of the projects that I follow have decreased in value to prices. This makes little sense to me.  The majority of major media that I read today is very negative on digital assets, yet these were the same people and entities that loved the same projects in January 2018.

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