NEWSLETTER #3
*Newsletter #4 (May/2018) will be released 5/8/2018*
Hello and thanks again for tuning in. Once again, our aim with this newsletter is to update you monthly on all things relevant impacting this new space, as well as some technical analysis.
(The content is purposely kept short, we want to provide information in contained soundbites)
(The content is purposely kept short, we want to provide information in contained soundbites)
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PUMP AND DUMPS!
Don't be an unsuspecting investors. There are groups in the cryptocurrency space trying to sell you worthless ICO's. Ensure to not fall for these pump and dump schemes. Business Insider did a great job recently on walking readers through how a 'pump and dump' is orchestrated.
Picture: Courtesy of Business Insider
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Research, Research, Research. Do your homework on the coin (s) you decide to invest in and if you don't care to do the work, just buy the popular currencies.
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DIVERSIFY YOUR PORTFOLIO
With more than 1500 coins, tokens, etc.,and more hitting the market every month, it's hard to determine which will emerge as the leader(s) in the space. Given the above; diversifying your crypto portfolio makes a ton of sense. As I build my crypto portfolio; monies will be concentrated to my list of top 10s or top 20s.
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INDEXING
Coinbase is creating an index fund. As of current; the Index fund is only comprised of the four largest cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash and Litecoin). Expect the fund to go live in a few months. If you want to invest; feel free to sign up here.
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WHAT DID I BUY?
Since our last Newsletter, I've made zero purchases. I continue to HODL and await better entries. I think the space is setting up for a 'news worthy' fall in prices.
Technical Analysis
(click on image to ENLARGE)
BTC/USD
- In our March/2018 Newsletter (when Bitcoin was trading around $9500); I painted a scenario where there's a possibility Bitcoin could touch $6500. Since our last Newsletter; Bitcoin did in fact touch $6500, going as low as $6450.
- $6450 didn't cause the 'panic' I anticipated.
- Bitcoin is currently consolidating around the $6k-$7k range. I believe this is a set-up for another move lower.
- As a Bitcoin hodler; this isn't what I necessarily want to see happen but I think it's a NECESSITY. I do believe there are weak hands to shake out.
- Within the upcoming weeks, I see a retest of Feb lows ($5873). If that doesn't hold; a $3k print is around the corner.
- In the long run; I remain bullish on Bitcoin and the cryptocurrency space. In the short term; expect extreme volatility in this asset class.
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(click on image to ENLARGE)
ETH/USD
- As indicated in our last Newsletter, Ethereum isn't showing me any signs of strength.
- Last month, I stated $400 was a good level to long because it represented support. Since our last Newsletter, ETH has hovered around the $400 level and is currently in consolidation mode.
- I have now changed my views on the $400 level.
- Similar to Bitcoin; I believe this consolidation, will result in a continued move to the downside.
- If $400 can not hold; I see a move towards $275 and capitulation to $100.
- The 'reset' in cryptocurrency may begin after each coin capitulates.
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What is 'Capitulation'
Capitulation is when investors give up any previous gains in stock prices by selling equities, to get out of the market. Capitulation involves extremely high volume and sharp declines. It also usually involves panic selling. The term is a derived from a military term which refers to surrender.
(click on image to ENLARGE)
LTC/USD
- We've had 'small' rallies along the way but similar to other coins within the space; Litecoin continues its decline.
- As I've indicated numerous times, $100 has represented support for Litecoin.
- I believe $100 will hold going forward. However, if $100 breaks, expect a retest of $75.
- I remain a HODLER
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(click on image to ENLARGE)
XRP/USD
- We had a good run recently on anticipation that XRP will be added to Coinbase. That didn't pan out and the price subsequently dropped. Again; this is an ugly chart and I expect this thing to head lower.
- I am expecting a retest of .56; secretly hoping for capitulation to .20. If it ever gets there; I will add in handfuls.
- .20-.50 represents no mans land. Hence why I strongly believe a dip under .50 will lead to capitulation.
I wrote the above in italics in our March Newsletter. From that point until now; Ripple has declined by over 43%! Again, not to be the bearer of bad news, but my shorter term projection stands at $.20 cents
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Game Plan
(first published in Newsletter 1)
- Decide what I can actually afford to invest in the space without becoming homeless (this protects me if the Crypto market turns out to be nothing but hog wash).
- As a general rule of thumb; I wouldn't invest more than 10% of my savings. For example; if I had $250k saved in the bank; $25,000 would be the MAX commitment. That way if the market goes south and all my coins become worthless; I still have $225,000 to roll with.
- Continue deploying money into the crypto currency space in phases. Phase 1 started around November/2017.
- Deployment of capital will take place as coins near their support areas (hoping to complete my total purchases in 4 phases).
- If this is anything like the stock market (which I've participated in for almost 2 decades); the more negative the press, the more likely these coins have a chance of succeeding.
- Remind myself to stay away from calling 'tops' or 'bottoms'.
- Add to position in phases; take some off the top as I see fit (this depends on your profit targets).
- Remind myself to Hodl!
- Remind myself, this is a new space and the kinks will continue to get worked out.
Feedback is so crucial to our community, let us know what you want to hear in the next Newsletter!
DISCLAIMER: Nothing on this site shall be constituted as investment advice. Cryptocurrency is a highly, note, HIGHLY speculative market. The returns are great but so are the risks! As with investing; I never invest with money I can not afford to lose.