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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: geokills]
#25037958 - 03/04/18 10:36 AM (5 years, 10 months ago) |
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Just a quick trading note. I am not a big fan of XRP, but it looks like a candidate for a quick scalp to the upside this morning. After basing for a couple of weeks, volatility is very tight and we are starting to see little bursts of higher volume on upside attempts. I would be very comfortable going in heavy on XRP right here at ~$0.92 with a stop below $0.89. Profit target @ $1.10 for a ~20% upside and ~3.3% downside. If you are going in oversize, you may want to take some first profits at $1 (8.7% upside to 3.3% downside risk). On a move above $0.96, your stop should be raised to $0.91 to help mitigate risk of loss.
I have personally allocated 15% of my trading capital on this trade.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: Stonehenge]
#25038048 - 03/04/18 11:18 AM (5 years, 10 months ago) |
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No one is 100% of course
This is why risk management is so damn important, and why I've been harpin' on about it like a broken record for years in my STOCKS thread. You can literally be wrong more than you are right and still turn a reliable profit, if you choose your entries wisely and adhere to a comprehensive risk management strategy that conjoins the discipline of a proper entry with stop losses and appropriate position sizing based on where the entry is relative to your stop loss. In the XRP trade above, initial risk is only 3.3%, but upside is up to 20%. That means you could take SIX of these trades and have FIVE of them fail, and you still wouldn't be out money (that means being right only 16.7% of the time and still not losing money!). People don't often consider this reality, but any active trader knows that you are often wrong, so the only way to make money is to prevent big losses so that when you are wrong (which you inevitably will be), it doesn't blow up your account.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: encryptor]
#25039192 - 03/04/18 08:38 PM (5 years, 10 months ago) |
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You are correct that attempting to "beat the market" is difficult, and that most people will do better following a strategy calling for maintenance of a diversified portfolio of assets for a long term allocation. I tend to be very active trading equity options on NYSE/Nasdaq listed issues when opportunities present, as I have been doing this for some fifteen odd years. Note that it took me a very long time (and a handsome tuition by way of the mistakes I've made) to get comfortable doing this, and more specifically, to understand when not to take a trade; as it is all too easy to fall into the trap of forcing trades even though the market may only be offering low probability opportunities, simply because you want to be doing something. One of the most important lessons in trading is that practicing patience by sitting on your hands and observing, is doing something, and is often the best thing you can do. Homerun opportunities simply don't appear everyday, and if you're going to actively trade, you need to have some serious discipline to make it work.
While I'm generally not very active trading crypto, I will take an opportunity if I see it, such as the XRP trade outlined earlier today which overshot the first sell target of $1 for a 10%+ gain inside of the day. However, crypto is a bit wilder, as the markets are still relatively thin, which makes it difficult to trade large positions without price slippage due to a lack of adequate liquidity on any given exchange at a specific time. For this reason in particular, I find it harder to actively trade in this space. The volatility is enticing, but in practice it can lead to getting chopped up pretty good if you're not careful.
On the whole, I think the crypto space is fascinating and set to continue growing during the years ahead. This doesn't mean that all the issues trading today are going to make it, as I would suspect that the majority of them likely won't be around in 5 years. But for those who can carve out their niche and develop a functional useful product, there is a lot of value yet to be unlocked. Will crypto "overrule fiat currencies"... I really have no idea. More likely, governments will issue their own crypto currencies to replace their current paper currency, such that they can keep exceptional tabs on how exactly money is moving, and have an easier time restricting that flow for whatever reasons the regulators/enforcers deem appropriate. This is one hypothetical scenario that gives credence to the power of privacy coins such as Monero (XMR), as building privacy into the technology will become a very attractive selling point, the deeper and wider the net our governments cast around us.
Regarding the IRS, just keep track of your trades and pay your taxes. Then you'll have nothing to worry about.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: geokills]
#25039894 - 03/05/18 07:59 AM (5 years, 10 months ago) |
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Quote:
geokills said: Just a quick trading note. I am not a big fan of XRP, but it looks like a candidate for a quick scalp to the upside this morning. After basing for a couple of weeks, volatility is very tight and we are starting to see little bursts of higher volume on upside attempts. I would be very comfortable going in heavy on XRP right here at ~$0.92 with a stop below $0.89. Profit target @ $1.10 for a ~20% upside and ~3.3% downside. If you are going in oversize, you may want to take some first profits at $1 (8.7% upside to 3.3% downside risk). On a move above $0.96, your stop should be raised to $0.91 to help mitigate risk of loss.
I have personally allocated 15% of my trading capital on this trade.
Out of half of the XRP trade @ $1.065 for a quick 17% swing. A move above $1.20 would have me considering adding back additional exposure for a test of $1.50. Otherwise, sell stop on the remainder of the position has been moved up to $0.97 to ensure a minimum gain of 12% in aggregate, while allowing room for continued upside if the issue cooperates.
Proceeds from the XRP sale this morning are being shifted 50/50 into ADA and XMR. ADA has not confirmed an upside move but looks like it could be getting a little frisky with some above average upside volume this morning and a prolonged basing period that extends all the way back to the beginning of February. XMR remains strong and I believe is an undervalued project with a strong development community that has proven its utility in practice. As I already have a fairly large XMR position, I had considered allocating the XRP proceeds into ETH, however ETH remains flatlined while XMR is still showing positive upside momentum. If ETH continues to trade sideways for another week or two, volatility will be very constricted and any break should prove interesting, so I will be keeping a close eye on ETH and ready to shift a heavy allocation into the issue if it shows buying interest on volume that carries it above $900.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: geokills] 2
#25044782 - 03/07/18 08:43 AM (5 years, 10 months ago) |
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Good mornin' folks! I would like to inquire as to how is everyone feeling with respect to market sentiment here?
For my part, I notice a few cross-currents and generally directionless performance for the time being. BTC remains a dominant player in the space, the gateway crypto so to speak, and tends to lead the market overall, and so it comes as little surprise that it is mired in consolidation with no imminent signs of breaking out. However, XMR and NEO as a couple of the bigger players in the space, have been able to show deadly relative strength, and as a result are two of my favorites (NEO being a longtime overweight position and XMR being actively built up to a larger slice of my personal portfolio's pie). The added utility of ETH is attractive, but until they can prove some scaling solutions in practice, I have a hard time seeing it eclipse its all the time highs, particularly on account of regulators clamping down on the ICO scene, which has been a major driver for ETH.
Newer platforms with ambitious goals that have yet to produce a fleshed out product (e.g. ADA, EOS) have been suffering since the holiday buying frenzy that saw a large swath of relatively uninformed retail investors begin to enter the space in droves. Lesser known platforms with ambitious goals (e.g. ZIL, HPB, RHOC) are enticing to me, as I view them akin to the more widely accepted early stage platforms, and as a result can see the potential for them to expand in value with greater velocity, as they have not yet enjoyed the same level of investor adoption as their larger counterparts, and yet are attempting to resolve many of the same issues, scaling being at the forefront of the list of ideals.
Utility plays are a mixed bag. OMG has fared well and I am hoping the same for NCT once it is issued and the product takes shape. But generally speaking, I am having a harder time committing myself to these types of positions in this environment, as the valuations are often _very_ rich for the level of functionality that they are offering in often only niche markets.
Coinbase's recent intention to launch an accredited only crypto index fund is a significant positive that I believe can bring additional capital into the sector, and I would suspect may ramp up their motivation to add additional issues to their GDAX platform. In the meanwhile however, I just feel like we are bound to continue chopping around sideways until there is a bit more clarity on the regulatory front, specifically with regard to the SEC's subpoenas by which everyone seems to be tight lipped regarding any detail whatsoever, but also with regard to the broader international regulatory sentiment by which we may gain some insight over the upcoming G20 meeting, although I suspect only a very basic framework may be discussed and it would be some time before any coordinated effort on global regulation could be reasonably executed.
What do you think about any or all of this? What have you been doing with your portfolio? What areas are you most excited to be involved with and why? Conversely, which areas are you uneasy about? Inquiring minds would like to know...
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: geokills] 1
#25045880 - 03/07/18 12:59 PM (5 years, 10 months ago) |
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Bit of a rout today, on account of (as others have noted) a trading bot getting hijacked and performing some nefarious autotrading en masse across multiple accounts on Binance. Additionally, concerns over the large block sales by the Mt Gox trustee appear to be rattling nerves a bit, in conjunction with the regulatory uncertainties we've already been discussing. Got kicked out of that ETH on the break of $800, two thirds of that went back into cold papery fiat, one third was allocated into XMR, which has been showing remarkable strength relative to the space in aggregate. Ditched ICX and EOS for the time being, on the motivation to simplify and I figure with the release of early investor tokens on ICX producing fresh liquidity, and the ongoing auction of EOS that may place its price at the whim of broader market movement, I didn't feel compelled to continue holding them. Have taken roughly 15% of my cash value out of my crypto portfolio entirely, and following is what remains as my active portfolio allocation as of 3/6/18:
- Cash 15%
- NEO 15%
- XMR 11%
- NEBL 8%
- NCT* 8%
- ADA 7%
- VEN 6%
- XTZ* 5%
- ZIL 5%
- tZERO* 5%
- RHOC 4%
- OMG 3%
- XLM 3%
- NAS 2%
- ZAP 1%
- PROPS* 1%
- POLY 1%
*Unreleased units, contribution equivalent
Updated my Ledger Nano S yesterday, and it was somewhat a pain in the ass, requiring removal of existing installed apps on the device, and subsequent multiple attempts after multiple failure to update notices, including a separate update step of the MCU before the firmware itself could be updated. I was just about to submit a support ticket to Ledger when it magically accepted the update on the umpteenth attempt. Ah well, it's still a nice device and am happy to have one.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: ManianFH] 1
#25047313 - 03/07/18 08:21 PM (5 years, 10 months ago) |
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mick, I definitely can't keep all of my holdings on the nano, but the bulk of them do work. Click here to see a list of what's currently supported. Two of my long time holdings, XMR and ADA are actively developing support for the Ledger. Also note that all ERC20 tokens are stored on Ethereum wallet addresses, so any ERC20 token can be dropped on your Ledger's Ethereum wallet address and stored without a problem.
encryptor, I'm not going to try to call a bottom (or a top). If you want to put some skin in the game, put some skin in the game. I always recommend buying and selling in scales. So if you have no exposure and want some, then dip your toe in the water. Keeping some powder dry can help you feel good about taking advantage of further weakness in the market, but putting a little bit in the game will also help you feel good if the market goes higher. Know your timeframe. If this is a long term investment, I would definitely advocate buying a bit right here. If you're just trying to do a short term flip, sit on your hands as you ought to wait for an extreme price dislocation, which by the looks of things tonight, we may see pretty soon.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: Tipote]
#25056049 - 03/11/18 11:26 AM (5 years, 10 months ago) |
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Quote:
Kittlebean said: Thinking of buying some DADI as I have noticed it is now available on some exchanges. Anybody own some or have and opinion on it, if so what exchange did you use to buy?
Geo, I remember a while ago you mentioned you were thinking of picking some up during the ICO phase, did you manage to get hold of any?
I opted not to participate in DADI, after concerns about potential plagiarism in their whitepaper and general mismanagement came to light, without adequate response from the DADI team. It appears their ICO rollout was a bust. I'm not touching it.
Quote:
Tipote said: Does anything think we are seeing a bull trap?
It's possible, but I would suspect more choppy sideways action on balance, for weeks to months, as regulatory issues remain at center stage with no quick and unifiable resolution. Suffice it to say, I liquidated a bit on the ETH break of $800 and am not planning to put any of that money back to work at this time.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: mndfreeze] 1
#25058197 - 03/12/18 12:02 PM (5 years, 10 months ago) |
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Quote:
Tipote said: Geo, I thought MTGOX creditors were challenging the idea of being paid in fiat? Do you know how come the trustee has been selling off BTC and BCH? Has the challenge just failed or what? Its absolutely ridiculous.
Mt Gox creditors were generally challenging the fact that BTC creditor claims were converted to their equivalent yen value at the time of bankruptcy (in other words, frozen at roughly $450/BTC). Had bitcoin not appreciated in value the way it has, it would be a non issue, as at the time of bankruptcy the Mt Gox estate had recovered enough assets to cover only approximately $100/BTC claimed. However, because bitcoin is now worth several times over what it was when the estate went bankrupt, creditors obviously want a pro rata (i.e. proportional) distribution relative to their claim size of the aggregate estate. Thus, creditors have petitioned the Japanese court to transfer the estate into a civil rehabilitation process instead of bankruptcy, such that any value of assets that exceed the approved "frozen in time" claim values can be distributed pro rata to creditors instead of being given back to the shareholders of the company (i.e. Mark Karpeles, the same guy who captained the ship when it went under and who is standing trial for embezzlement of company funds), as would be indicated under the traditional interpretation of bankruptcy law in Japan.
Fortunately, the court has received a recommendation from an examiner to proceed with civil rehabilitation, so long as certain qualifications are met as it may pertain to provisions of the original bankruptcy guidelines. We don't know exactly what those qualifications are at this time, but it seems probable that it involves ensuring that what would have been paid out under bankruptcy will be guaranteed to be paid out in civil rehab. The trustee of the bankrupt estate is charged with ensuring that all creditors' interests are upheld as it pertains to Japanese law. Because BTC is a volatile asset and it is generally unheard of for bankruptcy creditors to receive anything close to 100% of their claim value once a company goes bankrupt (let alone much more than that!), he made what in my opinion was a very wise decision to liquidate a portion of the estate's BTC assets once BTC's value had skyrocketed, in order to make sure that all of the accepted bankruptcy claims can be paid out in full as originally written. Thus, it appears likely that Mt Gox creditors who hold a BTC claim will be compensated in a combination of fiat (yen) and BTC when this all shakes out, although this may change as the details are hammered out by the court.
While I understand why a lot of crypto "true believers" balk at the idea of their BTC being sold for fiat, I would remind everyone that we (as Mt Gox creditors) are insanely fortunate that the trustee didn't immediately liquidate all of the estate's assets when the bankruptcy was commenced, as is the standard procedure. Because if that were done, we would only have received 20% of our accepted claim value (~$100/BTC)! Thanks to the trustee's judgement to hold the BTC assets while researching the best way to proceed, all while BTC shot the moon, it ultimately took only some 16-18% of the estate's crypto assets to be liquidated in order to cover what is expected to be the entirety of accepted creditor claims at a 100% payout (~$450/BTC), while maintaining excess crypto assets presently valued at over $1.5 billion. To the trustee's credit, he also began liquidating very near BTC's $20,000 high. Some may argue that he single handedly crashed the crypto market by unloading some 35,000-40,000 BTC on public exchanges. While I will concede that he would have been better off auctioning the BTC to private buyers instead of unloading over a public order book (which causes additional market pressure and generally doesn't achieve the best price due to liquidity slippage), I don't believe that his sales caused the rout in crypto, as they totaled some $400 million over a period of two months, versus bitcoin's typical daily volume of $10 billion or more during that same time period.
On the balance, I believe Kobayashi was being a responsible fiduciary and acting in the best interests of the creditors at large. He achieved an average price of around $10,000 per bitcoin (which is above the present day value), and in so doing has all but guaranteed that creditors will receive their full accepted claim value while still being able to hold onto $1.5 billion+ of crypto assets within the estate that the courts are trying to figure out how best to get into the hands of the company's creditors. Having locked in the payout for the bankruptcy claims should make it easier to justify transferring the estate's assets into a civil rehabilitation program because the bankruptcy obligations with regard to being able to make creditors whole, have been now been met; something that without which, the Japanese courts would have been very reluctant to approve a move into civil rehab. Note that some additional crypto assets may need to be sold and held as a security reserve for pending unapproved bankruptcy claims from Coinlab ($75 million) and the Tibane estate. However, there is a good chance that these claims can be settled for a much lower value, or ultimately be ruled against entirely, although the later ruling would be likely to extend the payout timeline by up to two years as the process moves through the courts.
In summary, I am pleased with recent developments, and happy to have a Gox Vault to call my own. Selling a small portion of the estate's crypto assets to hedge against potential future losses in the crypto markets was a wise move. Holding on to the crypto assets in excess of bankruptcy claims in order to allow BTC claimants to receive the bulk of their claim in BTC is also admirable, and by no means the traditional way of handling a bankruptcy case were this to play out "by the book". I see the courts making a solid effort to deal with a unique case that does not have any precedent, in order to ensure that creditor interests are upheld in the most responsible and beneficial way. People love to complain and get up in arms about the details, but honestly, despite it taking a long time, recent developments indicate that this is being handled very well.
Quote:
mndfreeze said: Anyone ever looked into VCHAIN? (VEN)
Local shroomery friend (Dankman) mentioned it to me. I hadn't heard of it but I also don't pour over reddit and crypto forums all the time. Wondering what everyone else here thinks.,
I have been a long time supporter of VeChain, having first mentioned VEN in this thread 5 months ago when I was buying at around $0.32. It is a well run project out of Singapore, with strong partner relationship development, currently focusing energy on supply chain authenticity and data management solutions but looking to expand under a proposed rebranding (named VeChain Thor) encompassing a broader range of use cases including DApps often associated with Ethereum's primary modus.
I reduced my original exposure to VEN after its blow off top in late January, never having sold out completely, and recently rebuilt the position over the past couple of weeks, presently occupying ~6% of my aggregate portfolio.
TLDR: Mt Gox is being handled well / I would advocate holding VEN as a long term position in a diversified crypto portfolio. 
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: Tipote]
#25058414 - 03/12/18 02:06 PM (5 years, 10 months ago) |
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Tipote said: I hope there is some compensation for the loss of BCH.
We didn't lose any BCH. The Trustee has claimed all BCH available to the BTC wallets he oversees. Everything of any value at Mt Gox is being pooled into the bankrupt estate. BCH and any other airdrops that have any liquidity will be factored in to the estate's assets, and provided the case does move into civil rehabilitation, those assets should be made available to creditors, proportionally to their claim, in whatever form is deemed appropriate by the governors of the civil rehabilitation. Granted, some of the airdrops are so thinly traded (or not traded at all) that they can't be sold in the volume Mt Gox would hold. In this case, the estate may auction off the private keys to recoup some value from those low volume issues. Or they may do nothing about it at all. Point being, BCH is pretty much the only ancillary BTC asset with consequential value at this point, and it has been claimed and is being managed by the estate. Whether or not creditors are issued BCH as BCH, is yet to be determined. The first step required for those BCH assets (and any assets in excess of our approved yen based claim value) to be distributed to creditors, is for the case to move out of bankruptcy and into a court ordered civil rehabilitation.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: geokills] 1
#25059294 - 03/12/18 09:14 PM (5 years, 10 months ago) |
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Just to lighten the mood a bit 
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: Lophosaurus]
#25062529 - 03/14/18 11:02 AM (5 years, 10 months ago) |
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I have no buy target on crypto and will not be buying on the way down. Would need to see a panic-capitulation selloff on very heavy volume to get me interested in committing more money to the space. I have actually withdrawn my idle cash component on the exchange to prevent me from attempting to trade too aggressively, as I just don't see a positive tape here and now. I have long term positions that I am comfortable holding through turbulence, but I do not see any favorable risk/reward trading scenarios in the space right here right now. My expectation is for very choppy sideways action with a negative bias, as regulatory uncertainty dominates market sentiment.
On that note, there was a congressional subcommittee on Capital Markets, Securities and Investment (Committee on Financial Services) Hearing: Exampling the Cryptocurrencies and ICO Markets this morning. Quite interesting, and generally favorable approach although there were certainly some hawks present. Click here to watch a recording of the hearing.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: geokills]
#25065795 - 03/15/18 01:10 PM (5 years, 10 months ago) |
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The crypto space remains under pressure and threatening to take out the February lows. From the standpoint of someone who got in at very low levels, there is nothing particularly appetizing about holding through the current tape. Disciplined investors and traders who have been sitting on massive profits should have taken some of those profits off of the table by now. Maintaining long term exposure to the asset class is fine, but one ought to recognize the difference between maintaining long term exposure versus the expectation of near term gains, and allocate their resources accordingly.
We may indeed see an upside move before too long as sellers exhaust themselves in the short term, but expectations should be kept in check. There are always stretches of impressive upside even amidst the most brutal bear markets. Because of the extreme volatility in this space, that upside can remain attractive to nimble traders. I see the majors (BTC & ETH) setting up for very wide trading ranges that could persist for several months, perhaps even years; speculating at $5000-$12000 BTC and $400-$900 ETH. I almost laugh at calling these "trading ranges", as they encompass moves of better than 100%, but such is the world of crypto. What I'm really getting at here is that we are more or less in the middle of those theoretical ranges, where I would expect a protracted battle of price consolidation in aggregate.
As such, choppy sideways to continued downside action seems to be what the near to intermediate term future will bring. I have been ringing the register since late December, took a quick swing trade with some fresh capital on the February swoon that worked out marginally well (booked ~35% profits on ETH but didn't sell the XMR that I bought @ $182 which has now nearly round-tripped). As someone who has been actively trading for over 15 years, the best I would reasonably hope for through the balance of 2018 is range bound trading. For some traders, that can be enough, as "range bound" in crypto can still lead to outsized moves within a short period of time. But for me the easy money has been made and I will only want to rebuild positions after a longer period of consolidation that shows evidence of a strong base having been built as the market continues to mature.
Recall the age old lesson that history often repeats itself, and pull up a chart of BTC that spans the summer of 2013 through early 2017. A case could be made that we are finding ourselves in a scenario that echos April of 2014, where we suffered a ~50% pullback followed by years of consolidation (and even deeper downside). Ultimately, that period of time resolved itself in an impressively profitable way, but these things take time and we just aren't there yet.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: SirShroomsAlott] 3
#25082020 - 03/22/18 09:52 AM (5 years, 10 months ago) |
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I don't think you need to rush in to buy... anything. If you're shifting assets that are already in the crypto space, ICX does appear to be coming out of a contractive phase and may be starting to perk up, but set your bids at least 10% below the ask because this market will probably come to you. There is nothing in the overall space that compels me to commit new capital right here right now. If I had zero exposure, I would consider legging into some positions here, but as I am already invested and have removed capital from the market over the past months, I just don't see much meaningful upside in the near term, instead expecting volatile sideways chop with a negative bias to persist for months, and that isn't an expectation that warrants being aggressive/overweight.
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geokills
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Registered: 05/08/01
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: SirShroomsAlott] 1
#25095894 - 03/27/18 09:27 PM (5 years, 9 months ago) |
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I don't expect to be pulling any more of my crypto assets back into fiat at this point. What I have left riding is all former profit and I want to see this new sector through to fruition. I don't much care to pay short-term cap gains if I can help it, so unless we see another blow off top scenario like we did in Dec/Jan (not likely), I'm allocating with a time horizon several years, maybe even a decade out.
Keep an eye on Zilliqa (ZIL). I've mentioned it a few times over the past couple of months as a front runner on implementing sharding technology, and while they are still early stage, they have held up remarkably well during the recent sector wide carnage. Pull up a chart of ZIL/ETH, ZIL/BTC or even ZIL/USD and you'll see what I mean, with exception to its initial launch on public exchanges, which almost always results in some exaggerated froth.
The fact that Coinbase has made a public mention of integrating ERC20 support in its platform is encouraging with respect to the alts. Not a reason to go balls out and leverage to the hilt or anything, but something that indicates some of these altcoins will be given a place on a major, highly regulated and insured platform at some point in the future.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: SirShroomsAlott] 1
#25108068 - 04/02/18 09:04 AM (5 years, 9 months ago) |
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The lightning network is a second layer compliment to lighten the burden of increasing transaction load on the primary layer, bitcoin's main blockchain. As we witnessed a few months ago, the network was under tremendous stress as the demand for transactions exceeded the miners capacity to validate each transaction in a timely manner. This resulted in a bidding war by those who wanted their transactions confirmed more quickly, but even with high fees, settlement times were less than acceptable.
Lightning network takes a chunk of transactions off of the primary layer. It is a second layer compliment, that locks within each lightning network "channel" a specific value of bitcoin from the primary layer. This locked value can be transacted back and forth within the second layer, but is ultimately settled/registered on the primary layer once the channel is closed. So the primary layer is still the ultimate arbiter of aggregated value, and thus miners are still necessary and relevant to the process. Ultimately, the laws of supply and demand should theoretically over time equalize the fee to a level that is economically appropriate.
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geokills
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: geokills] 2
#25108151 - 04/02/18 10:07 AM (5 years, 9 months ago) |
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Just some notes I sent out on another crypto channel this morning:
Amazing deals are a matter of perspective and, in particular, time horizon. If you're simply judging by the percentage calculation from peak to present day trough, it is easy to make the somewhat dubious assumption that present day prices indeed present an amazing deal. From the perspective of fundamental valuation, most crypto issues are barely off the ground with a viable product, let alone widespread adoption and sustained accelerated growth, either in terms of consumer usage or revenue. Yet so many of these issues are - still - commanding valuations in the hundreds of millions to billions of dollars.
It is obvious in hindsight that the turn of 2017 to 2018 was fueled with irrational exuberance, driven in large part by the "lowest common denominator" of the undisciplined retail investor. Studying this history highlights the importance of scaling into and out of positions. The general aim for any seasoned investor is not to catch 100% of any given move, or to hold on for glory through thick and thin in efforts to ultimately be proven right. The general aim is simply to be profitable, and because one individual will never know more than the crowd, it is important to trade with discipline, respecting a rapid and exaggerated move in price by fading it incrementally, but ideally keeping some skin in the game in efforts to stay in sync with the price-emotion-action cycles of the market.
What has happened to the crypto sector over the past few months is not the type of action that is repaired or reverses just as quickly as the carnage occurred. Downside moves in capital markets almost always move faster and farther than their upside counterpart. Thus, it would be a foolhardy assumption to expect that the current price levels are a steal and must be bought before the entire market takes off without you. From my seat, I do believe prices are certainly more attractive than they were a month, two or three ago, but I also believe that it will take several more months and even years for the bulk of these issues to hit new highs, and that many of them never will.
That being said, I have advised a few people who have had zero exposure to crypto assets, that this appears to be an appropriate time to begin scaling into a basket of assets poised for long term growth. But as for me, who has been riding BTC since the $200's and ETH since $11, and who did sell into the New Year out of discipline (and who wish he had sold more!), I am not compelled to commit additional capital here and now. I already have meaningful exposure, and as market dynamics have changed, I am not expecting moonshot gains in the near term, instead allocating for a very long period of lying in wait while this new sector builds out its fundamental legs, creates products that actually work toward their intended purposes and are not thriving primarily as a vehicle for speculation, instead producing products that are making money and improving upon existing solutions for similar functions.
This game is much slower and less exciting then the hype driven frenzy of a new market that first attracts the attention of the public masses, which is what we bore witness to throughout 2017. But this slower and more tactful game can also be less stressful while remaining wildly profitable, one just has to set their expectations differently and accept that the market has indeed changed.
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geokills
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Registered: 05/08/01
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: geokills] 2
#25138410 - 04/14/18 01:05 PM (5 years, 9 months ago) |
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It sure would be nice to see things taking off, but I'm not running to fund my accounts (granted I maintain significant existing long term exposure). Off the cuff, this looks like a good old fashioned short squeeze. Whether it turns into sustainable upside is anyone's guess. I would need to see a move above $9000 to have increasing confidence in a reversal of the prevailing downtrend, as presently BTC is still printing lower highs.

The volume on last week's pop is encouraging, however it's hardly surprising given the increasing level of short interest we saw building up into it, as especially high margined shorts can create a cascade of forced liquidations that squeezes price higher with great velocity as soon as price breaks against them. No doubt there was some piling in under the expectation that the February lows would be broken.
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geokills
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Registered: 05/08/01
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: geokills] 1
#25147938 - 04/18/18 12:00 PM (5 years, 9 months ago) |
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The continued stabilization over the past week as BTC churns around the $8000 level is encouraging. If I were actively trading, I would be inclined to add some long exposure here and especially above BTC $8500. Many of the dominant altcoins have outperformed over the past week, which is interesting although I would be hesitant to draw any specific conclusions from that action. I would also be a bit hesitant to chase the alts at this point, suffice it to say that some of them are starting to print higher highs on a USD basis, thus breaking their downtrends. BTC hasn't joined that party yet, however now that it has traded sideways for a week after the big pop off of $6700, a subsequent move that stabilizes above $8500 will call the prevailing downtrend into question and likely encourage longs to increase exposure, setting us up for a test of $11000-$12000.
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geokills
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Registered: 05/08/01
Posts: 23,417
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Re: Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects [Re: geokills]
#25155140 - 04/21/18 11:29 AM (5 years, 9 months ago) |
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The action continues to appear constructive. $9000 is still a bit of a barrier from the January lows and late March highs, but I'm not sure those legacy pivot points are so relevant anymore, and if we do ricochet off $9K, I don't think it would be more than another month or so before price would attempt to break through once again. Nevertheless, although the primary downtrend has broken, we can't really expect this thing to just blast off to new highs. There will be backing and filling along the way, tests of prior resistance in attempts to confirm those levels as new support, and a probable prolonged basing period that I suspect will chop around sideways for at least a month or two (possibly building the bottom of a "cup" pattern). I would definitely want exposure to the market, but be mindful of both the zig and the zag. Buy the tests of prior resistance as opposed to the breakouts, whenever possible.
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