TL:DR - My long from $486 is still open with a target at $550 or wherever we intersect the dotted red short term downtrend line.
This is the ETHUSD chart with 1 day candles zoomed out. Quickly I will just say that I got nervous and almost closed my long this morning when price hit $470 but I decided to stick to my plan and leave the stop loss at $447. I have been rewarded as price moved to $512 at the time of writing and all the way up to $526 intra-day. A reversal is likely at the dotted red line which is the shorterm downtrend. I expect price to intersect this around $550 and plan to close at least 50% of my position there.
I usually discuss my plans for if my chart is wrong and, in this case, price goes down but today I won't because I want to day dream. I've been meaning to write this post for a while.
I remember when price took it's first nose dive in mid-January saying to a friend that the crash would smother the crypto flame for many months to come. The move from $400 to $1500 saw a hoard of new, inexperienced investors buying "those Bitcoin tokens" as prices soared and they were hoping to get on the train too. During this time some of my friends asked about investing in Bitcoin. Thankfully none of them bought in but there are a great deal of people who finally gave crypto a chance near the All Time High and sold at the first low. Many of them will curse off cryptocurrencies forever. Still others won't buy until they see new All Time Highs again and FOMO buy AGAIN. We are in a multi-month bear market because new buyers have been scared off by this volatile, experimental asset.
With that said, I want to look at what will bring the bull market back.
(1) Clear Regulation (preferably favorable/laissez faire )
(2) Mass Adoption
(3) Increased scaling
(4) China
(1) Clear Regulation - Goldman Sachs, JP Morgan, Deuthsche Bank, and many others all want in on crypto. Binance made $200 million in the first 3 months of 2018. Think about that. An online crypto exchange that is less than a year old is on pace to make $800 million this year. Do you think Goldman Sachs and the other whales of Wall Street are just going to sit on the sidelines and say "we don't want a piece of that"?
BIG money wants in BUT the current regulatory framework is too risky. They need to know which crypto's are commodities and which as securities. They need exchanges that are registered with the appropriate agencies to trade assets (see recent developments with Circle, Poloniex, and Coinbase). They are bound by law to use a custodian to secure their assets and custodians don't exist for cryptocurrencies...yet. They are coming. All of this is coming because BIG money isn't OK sitting on the sidelines.
(2) Mass Adoption - For crypto to really be worth anything it must be useful. If it remains a speculative instrument championed by moonboys then it is bound to fall to 0. Crypto needs mass adoption. Ethereum went on its first moon run after the EEA announced its first major partnerships in Q2 of 2017. They had proof of adoption and adoption is legitimacy. Price then outpaced the real adoption and we are seeing the effects of that now. Announcements were made, yes, but the highways and infrastructure of Web 3.0 still are being built 1 year later. Slowly the evidence of mass adoption is mounting. More and more DAPPs are being released on Ethereum. More merchants are accepting Bitcoin, Litecoin, and DASH. Bosch and Volkswagen have demo'd Iota payment protocols at trade shows. Adoption is coming, but we must first have...
(3) Increased Scaling - Public blockchains must be able to handle a massive volume of transactions per second if they are to be the backbone of Web 3.0. Currently no blockchain has consistently hit TPS targets in real world production. It is frequently quoted that Visa processes 1000 tps whereas Ether current does about 17 and Bitcoin about 8 (I may be off a few but you get the picture)
This is the ETHUSD chart with 1 day candles zoomed out. Quickly I will just say that I got nervous and almost closed my long this morning when price hit $470 but I decided to stick to my plan and leave the stop loss at $447. I have been rewarded as price moved to $512 at the time of writing and all the way up to $526 intra-day. A reversal is likely at the dotted red line which is the shorterm downtrend. I expect price to intersect this around $550 and plan to close at least 50% of my position there.
I usually discuss my plans for if my chart is wrong and, in this case, price goes down but today I won't because I want to day dream. I've been meaning to write this post for a while.
I remember when price took it's first nose dive in mid-January saying to a friend that the crash would smother the crypto flame for many months to come. The move from $400 to $1500 saw a hoard of new, inexperienced investors buying "those Bitcoin tokens" as prices soared and they were hoping to get on the train too. During this time some of my friends asked about investing in Bitcoin. Thankfully none of them bought in but there are a great deal of people who finally gave crypto a chance near the All Time High and sold at the first low. Many of them will curse off cryptocurrencies forever. Still others won't buy until they see new All Time Highs again and FOMO buy AGAIN. We are in a multi-month bear market because new buyers have been scared off by this volatile, experimental asset.
With that said, I want to look at what will bring the bull market back.
(1) Clear Regulation (preferably favorable/laissez faire )
(2) Mass Adoption
(3) Increased scaling
(4) China
(1) Clear Regulation - Goldman Sachs, JP Morgan, Deuthsche Bank, and many others all want in on crypto. Binance made $200 million in the first 3 months of 2018. Think about that. An online crypto exchange that is less than a year old is on pace to make $800 million this year. Do you think Goldman Sachs and the other whales of Wall Street are just going to sit on the sidelines and say "we don't want a piece of that"?
BIG money wants in BUT the current regulatory framework is too risky. They need to know which crypto's are commodities and which as securities. They need exchanges that are registered with the appropriate agencies to trade assets (see recent developments with Circle, Poloniex, and Coinbase). They are bound by law to use a custodian to secure their assets and custodians don't exist for cryptocurrencies...yet. They are coming. All of this is coming because BIG money isn't OK sitting on the sidelines.
(2) Mass Adoption - For crypto to really be worth anything it must be useful. If it remains a speculative instrument championed by moonboys then it is bound to fall to 0. Crypto needs mass adoption. Ethereum went on its first moon run after the EEA announced its first major partnerships in Q2 of 2017. They had proof of adoption and adoption is legitimacy. Price then outpaced the real adoption and we are seeing the effects of that now. Announcements were made, yes, but the highways and infrastructure of Web 3.0 still are being built 1 year later. Slowly the evidence of mass adoption is mounting. More and more DAPPs are being released on Ethereum. More merchants are accepting Bitcoin, Litecoin, and DASH. Bosch and Volkswagen have demo'd Iota payment protocols at trade shows. Adoption is coming, but we must first have...
(3) Increased Scaling - Public blockchains must be able to handle a massive volume of transactions per second if they are to be the backbone of Web 3.0. Currently no blockchain has consistently hit TPS targets in real world production. It is frequently quoted that Visa processes 1000 tps whereas Ether current does about 17 and Bitcoin about 8 (I may be off a few but you get the picture)
Trade closed manually:
Price has largely shrugged off the news. I have closed the trade for only a small gain. Clearly the market needs bigger news which may be a long way away.
(4) China - This is admittedly a Dark Horse. Crypt does not need China as it has proven multiple times. BUT, a China that is bullish on crypto with CLEAR regulation on what is and is not allowed is strongly bullish. China has a fairly predictable pattern for releasing news. Rumors leak out of government agencies and news stories get published testing the public's reaction to the news. Then, abruptly after weeks of leaks, the make their announcement. This was the pattern of the re-ban in September of 2017 and we are seeing it again in the last 3 weeks except this time the news is that they will allow highly regulated crypto trading. Many will say like a crazy ex-girlfriend crypto is better off without China but I can't see how 1 billion more potential buyers is a bad thing.
Well today we got a little taste of what happens when one of these pieces fall into place. An official with the SEC announced it was his belief that Ether was not a security and that any sufficiently decentralized cryptocurrency also could not be regulated as such. I must say so far regulators have made very sensible ruling on the asset class and the market has blessed us for it. If we continue to get good, clear regulation then I can only see good things in crypto's future.
***This is not investing advice. I am not an investing professional. Do not invest what you cannot afford to lose. All investors should seek guidance from licensed financial advisers and not random people on the internet.***