June 20, 2018 Market Update

The Digital Currency total market capitalization increased 9% from last Wednesday’s multi month low number and is currently 291 Billion Dollars.

What does a rally in the cryptocurrency market mean for BTC dominance ??  Market up, BTC dominance lower.  It moved down fractionally over the past week but is still above the 40% level.

Volume was extremely light, with the highest volume time period being the 15 minute frame in which currencies printed the multi month low at the 265bb level.

With many of the currencies trading within the ranges we have spoken about over the past few weeks, I am going to focus on a few technical analysis patterns and give lots of examples and some in depth analysis.

During my career I spoke on some major media outlets regarding technical analysis, which is far less in vogue as it once was, but it has worked well for me, hence why I share the levels in the market in which I deem of importance.

This current trading band for the digital commodity market sees support near the 260 billion area and minor resistance near the 300bb area.

We have seen this same trading band once before in late March into early April of this year.

 

Below are both charts

 

June 13th through June 20th total market valuation

 

 

March 27th through April 12th total market valuation

 

Bottoms and tops tend to have two forms, the “v” shape or the “w” formation.  The “v” bottom or top tends to come when people are least expecting and the proverbial herd and the leveraged players panic out and is far less sustainable for a major trend change.

The second type is the “w”, some may refer to it as a rounded bottom.  The “w” shape is formed as the second “v” shape occurs.  One would look for a longer terms consolidation near the low prices, couple with lower than normal volume, as the larger funds purchase at the lower levels and then trade the consolidation channel from a long position until they enough length to let the prices rise.  The price levels tend to get tighter and volatility decreases dramatically.

Researching financial and graphical data has helped me with better purchase prices and also extending gains as positions begin to increase in the balance sheet.

Technical or numerical data analysis as some refer to on the street is one of the major algorithms that many market makers run, I know this as I helped some with the idea generation for their systems.

The lows could still be challenged, as this is a 3 1/2 month chart, but I wanted to show this to illustrate the chart pattern.  If the lows are broken for a  time period greater than 48 hours, the “w” formation becomes more questionable.

Below are a couple longer term charts.

 

February through present total cryptocurrency market cap

 

 

January to present total market cap

 

Note in January after the digital asset market had a magnificent run, their were two sellofs which i  highlight with the “v” symbol and they happened quickly and recovered quickly, only to fall further.  Then in March, another small “v” bottom occurred, and it too failed.  This is why when using a technical approach, I have predetermined levels in which i enter and exit.  Often times I will refer to something as a trading channel or band, as major trend reversals tend to happen over longer duration’s

 

Digital Asset total market cap over the past five years in log format

 

 

 

 

 

May 2017 through Early August  Crytpo Total Market valuation … Log and linear versions.

Charts prior to 2018 are far harder to illustrate as the volume and price now are large multiples of what occurred in 2017 and prior.  In this chart, during May of 2017, the market rose from 37bb to 89bb in less than four weeks.  After that historic run, in less than 2 days the market fell more than 32% from 89 billion to 60 billion.  As luck would have it in the pre 2018 crypto markets where almost any buy was eventually a winner style of trade, the market traded all time highs in the following two weeks.  After the high in the middle of June, volumes started declining slightly and the digital assets began drifting lower, then in July volume spiked and the second portion of the “w” was completed.  Note that the mid July low was slightly above the low which was set at the end of May.  It was in early August of 2017 that the monster rally in the digital asset market took off.

 

I am showing the log and linear versions, as linear helps me to highlight shorter time periods versus longer duration.

 

May 2017 through Mid January 2018 log chart.

Because the price movement last year was a ten sigma, (trader talk for once in a lifetime,) the “v” and “w” shapes are harder to find and study hence why I have a plethora of charts with my highlights.  For an entire asset class to move from 37bb to 89bb last May was mind boggling, and the 30% ++ selloff in 48 hours was stunning to me, but as the great majority of transactions in the digital commodity markets are firm and funds running algo’s it becomes far less surprising.  If one bought on the ATH, (all time high,) last May and within 48 hours the balance sheet decrease would have been frightening.  This is where the log charts help to illustrate  trends and ideas for well capitalized longer term investors.  In the fund world, the stop losses and game over number at firms I worked with tended to be high is they reached the high single digits over a one week period.  In mid 2017 and prior the digital commodity market was minuscule as compared to the present day.

 

The May 2017 – January 2018, in my opinion highlights the possibilities with the crypto market.

I will close on a lighter note and talk about the cryptocurrency market slang, some of which still amuses me when I hear it.

There are many “crypto terms” which I was not accustomed to, many have very negative connotations.

During my career in Capital Markets, if one is winning, they generally keep a lower profile and if someone has a position in which they are below the purchase price, no need to point that out and gloat in front of them.

Below are the crypto terms I hear regularly, and with them I will put a more business like alternative.

FOMO = Late to the party = Asset is rising at high velocity, but a great deal of investors are waiting for a pullback that isn’t happening

FUD – FUDDING = Slander = Negative Communication about a project or asset because that said investor purchased at a higher price =  If you own something there are two options, see what you can do to help the project.  Or take a loss and move on, I have taken far more losses on positions than I have gains, but if one loses $1 on 80% of his positions and makes $10 on 20 of the positions on a regular basis, that said investor does well in the end.

HODL (ing) = Owning shares or currency (Seems that people like to talk about HODL when they are long in a down market) =Thinking one is bigger than the market and carrying a long position in a down market = Going counter trend = Being stubborn.  I realize that it takes a tremendous skill for someone to buy the bottom or sell the top over and over again.  It’s nearly impossible.  This seems like a precursor to FUD, as eventually the investor has taken a big enough loss and gets tired of hearing someone else remind them of it.

“PUMP (ing)” = Rally = sounds way more professional.  Also those who engage in pumping based on false information can get in serious legal trouble.  Since much of crypto is decentralized and finding information is far more difficult than say a US equity, I would tend to do some due diligence on the source.

“DUMP (ing)” = selloff

MOON = Large Planet = Also referenced in CryptoSphere as a parabolic move up = I’ll stick will the rally term again

LAMBO = Italian Sports Car = Crypto slang for I hope I am going to make enough on this coin to buy one ?

 

 

 

This Post Has 2 Comments

  1. I am trying to exchange my old pac to the new and I can not locate the official redemption addresses

    1. Hello,

      the open redemption window has closed on the 1st of june.

      If you want to redeem please email [email protected] and request redemption

      In that email you must include,
      – The amount of PAC you want to redeem
      – Reason for late redemption.

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