Bitcoin bounced strongly this morning from the $9000 mark which has seen the support of the last few weeks.
After a close but yet so far attempt at $10000, BTC turned and went hunting for buyers at lower prices. As has been the case many times lately it found them at 9000.
Whilst Bitcoin struggled Ethereum also showed some weakness over the last few days but once again has managed to hold a low of just over $700.
Ethereum has been in the news a fair bit with a supposed fake news story about an SEC meeting to decide whether ETH was a security.
This caused a slight panic on bag holders who have been buying recently and swift move down from above $800 to $700 occurred in less than 3 days.
The price of Ethereum has been on a strong run since early April when it touched a low of $375 before doubling in value within 4 weeks.
It’s no surprise that the price would cool off slightly after such a parabolic move.
And with the pullback in ETH cape a lull in a few of the stars of April.
Wanchain and ICX have both cooled from their highs and look to be consolidating before their next move. If Altcoins continue to keep strong then it’s likely they’ll shift a gear higher again in the coming months.
Lisk has a dramatic fall, losing 30% of its value in the first week of May.
Whilst most star movers seem to be the newly issued ICOs. It looks like ICOs are where it’s at just now, so keep your eyes on the newly listed coins on popular exchanges such as IDEX.
It’s certainly a good time to be invested in cryptocurrencies. The market has been extremely strong compared to the first quarter of 2018.
There’s been some phenomenal gains by many new listings and some old stables, but two of Binance‘s early listings now look to be making a move from the doldrums.
Etherparty (FUEL) bolted out of the traps in November last year, and went on to gain 4 to 5 times in value from its lows after listing on Binance.
As with all cryptocurrencies Etherparty price suffered during the first quarter of this year, but things are beginning to look interesting once again.
Etherparty provides a platform to make smart contracts easy to utilise for any user. There’s some buzz again on these companies, Chainlink is doing well again also.
The company is about to announce a name change, probably to suit the business offering better (it is a bit of a laugh name).
As for the price, with news and good strong markets there’s no reason why this won’t continue to climb higher over the coming weeks.
Here’s the chart for FUEL so you can see where it could be heading.
Gxshares tripled in value on the run up to January but fell back somewhat, although not as hard as many other cryptocurrencies.
Gxshares provides an app which users can use to secure their personal data and allow companies access to it in return for tokens. Gxshares price will ultimately come down to how many users are active on their platform, creating transactions.
They’ve recently been updating their products and seem to be working hard to provide value for their early investors, and the chart reflects this as price has nearly doubled since early April. Definitely a token to keep a close eye on.
To find undervalued cryptocurrencies you don’t need to look very far. There’s an abundance of them out there since the altcoin bear market began in February.
This article isn’t about listing some picks, but more about answering the question: what exactly does it take to determine a cryptocurrencies value?
This is a question that is hard to give a definitive answer to.
The reason why is because many small cap crypto have yet to create a real business which in turn creates high volume of transactions on their network.
That is how true value is determined.
More often than not the token or coin is used as entry credit or payment for access to the companies service, or to convert money into for a fast transaction then back again.
Either way, a business with lots of customers would have huge transactional volume in their tokens.
A good example of this is Binance coin. It’s used as a way of lowering trading fees on the popular crypto exchange Binance. Because they have a huge customer base there’s great volume every day.
So How To Determine Undervalued?
For finding undervalued cryptocurrencies at this moment in time you should be looking for cryptocurrencies with high potential but low market caps and small supply of tokens when compared to their competitors.
For instance here is an example I was looking into this week. Take Restart Energy MWAT.
This is a renewable energy supplier based in Romania who have a real business (generated $20 million in 2017). Their news has been constant since ICO, and they are busy applying for energy supply licenses in major European countries.
A few ticks for my boxes.
They have peers to compare to, but the main one would be Poweledger POWR. Powerledger have a circulating supply of around 360m tokens, but a total supply of 1 billion (which means more circulating supply to follow). A market cap currently of over $200 million.
They are slightly ahead of Restart Energy in terms of blockchain, but not ahead as far as actual customers and real world business.
Compare MWAT. It has a circulating AND total supply of 415 million. But currently only a market cap of $27 million.
To me they seem undervalued compared to Powerledger. However POWR is on Binance while MWAT is on Kucoin.
This is where your judgement comes in. Read the news and decide where MWAT should be if they begin to catch POWR up in terms of the blockchain side of their business.
You can use this idea to find undervalued cryptocurrencies in many different industries. Picking out the companies who offer a greater return compared to their peers.
The pitfalls with this is that you are at risk of taking positions in companies that could fail.
But let’s face it, you are with most cryptocurrencies!
Remember for this to be effective you need to only buy into the stories of companies who have been supporting their tokens with constant news and updates on their progress.
Try to avoid the cryptos that have no active Telegram and social channels. Make sure they update news regularly, on their own blogs or Medium / Steem etc.
And remember the old adage. Never invest what you can’t afford to lose.
After months of constant sliding Ethereum ETH has began to recover. It’s gained ground versus the US Dollar along with Bitcoin, yet many predictions say to expect higher ETH prices to follow in the coming months.
These tokens help by contributing a high volume transactions every day. Each transaction needs confirmation and thus consumes gas.
The useage of ETH is only going to rise, and until another rival platform can tempt away new ICOs then the scale of volume is not going to vanish anytime soon.
Predictions for ETH vary from a conservative $700 to some out of this world levels at $3000 and more.
For instance Wallet Investor has a 5 year forecast of $4279 at this moment in time.
Whilst many would look and maybe think this is crazy, it might not be far off the truth. As crypto evolves and projects released on Ethereum gain ground then the volume of daily transactions could easily be three or four times what they are today.
Technical analysis of markets is done by studying charts. Currently the Bitcoin chart is making some very interesting moves.
Trends in the price of coins can be seen easier when looking at it in a visual form. Trends are determined by a series of higher highs, or lower lows. This shows you that the price of Bitcoin is willing to make a lower or higher price on each subsequent level in a trend.
When analysts notice a trend they can often draw a trend line over the tops (for a down trend) or under the lows (for an up trend).
On this chart below I marked the last possible series of highs which kept Bitcoin in a confirmed down trend.
Since Bitcoin broke above this trend line price seems to have stabilised quite a bit. It’s also no coincidence that other alt coins have also been gaining some ground.
But a new trend is not always the obvious choice of direction for a price. As is often in cases where a line is broken price can consolidate or “chop around” in a range before the market takes it in a new direction.
While these periods of consolidation take place you can expect some rises and falls, many can be short lived. For the trend to be confirmed in an upward direction the keep an eye on the Bitcoin chart. Look for the price to make a new high, then fall back to make a low which is higher than the last low area.
After this happens the next move upward could be significant. Let’s hope it happens.
Whilst Ethereum and Bitcoin are not heading to the moon just yet, they have become more stable in recent weeks. The move from the lows in early April have coincided with a lot of bullish talk from various news outlets.
With this stability altcoins have also become a lot stronger. Many beaten down cryptocurrencies are in healthy uptrends and showing signs of a strong recovery.
Not only has this coincided with bullish talk but one of the main world exchanges Bittrex has now re-opened registration for new customers.
Bittrex is huge, and at the peak of the altcoin rally last year they closed their doors due to the sheer number of new customers flowing in each day.
It’s no surprise that volume has reappeared now this exchange is open again, because quite simply its huge.
So which crypto has been making good gains?
Well there’s been some great strength in a few ICOs from last few months. Pundi-x has gained near 200% from its lows after tokens were distributed.
Wanchain continues to show amazing strength. It’s recent listing on Binance is surely helping this fantastic project.
Other Binance stars include Stratis which has been flying since early April. Love it or hate it but Tron is also looking extremely good with a sustained bounce since late March.
Surprisingly though Binance Coin, which is their own token for allowing cut price trading fees on the exchange, is down a fair bit from the March highs.
This is a bit of strange price action considering the amount of trading that should be happening in this token, because Binance users can make transactions in this token and cut their trading fees considerably.
They also released news back end of March that they plan to operate the token on their own blockchain at some point, so we can only guess that this news has now been priced in and investors are taking profits.
Let’s hope this strength continues for the summer so we can all see some good gains on our investments.
Ethereum made a sharp and fast break out of the bottom pattern it was making this last few weeks. Attempts to make a new low were thwarted and price gained fast above the last weeks high ending up above $500 for the first time since mid March.
This bullish move in ETH pulled the altcoin market with it.
Many altcoins have been showing signs of strength this last two weeks and was most likely due to Ethereum showing signs of bottoming out.
It’s been a long time since the altcoin market was a sea of green but it was welcomed with open arms by tired investors of recent ICOs that had suffered badly during the first quarter slump in prices.
Stars of the show included a recent addition to Binance Wanchain. This token was only added to the exchange in late March but after an initial slow start has now more than doubled from the lows.
It’s fair to say that a retrace of sorts is probably on the cards for Wanchain but this is a much sought after project and will surely offer some great upside over the coming months.
EOS was on a similar bullish run. Since late March the price has jumped over 120% and is just beginning to retrace.
Again it’s no surprise as it’s a solid project. A blockchain with much more to offer developers than many others just now. We’d expect similar moves throughout the year as more and more apps are released utilising EOS.
And what about Ethereum?
Where is it heading next?
Overall you have to say the fall from the January highs was severely overdone. All the while more and more tokens are being released on the ETH blockchain and transactional gas is being spent.
Ethereum has a real world use case, and should probably regain most of its losses over time. Just how much time it needs is the million dollar question.
Even though Bitcoin and Ethereum are near year lows there’s a bunch of strong moves happening in other smaller crypto. Altcoins are seeing strength especially in quality projects.
Here’s some quick analysis on our pick of the movers.
Digibyte – DGB
Digibyte is a SHA256 algo mineable coin that has seen a spectacular fall. It traded over 850 sats at the turn of 2018 and recently hit a low around 250 sats.
It’s a decent project with an active team. Price has been rebounding last few days but there’s plenty room above to grow. Add it to your watch list.
Cindicator – CND
Cindicator is a token used to gain access to their unique technical analysis signals. It was a very sought after token at the turn of the year.
It traded as high as 3300 sats but now sits less than 1000. Price looks like it’s set to begin a new upward cycle.
Funfair – FUN
FUN coin has not been much fun for holders since January. It fell from 1400 sats to 440. But there’s reasons to buy.
A purveyor of casino games for white label, tokens have a major use case. This one could pump at any time with news flow.
ICON – ICX
You have probably heard of ICX but let’s reiterate what everyone else thinks.
This is destined to be a top coin. Major people are invested and everyone is watching. It’s fallen around 70% from its January high and looks good value down here for a long term hold.
Modum – MOD
There could be some spectacular gains to be made here on Modum. It’s fallen over 70% from the highs of the altcoin rally back in January.
It’s a quality project and is listed on Binance, so any bullish moves should see plenty volume appear to give them substance.
With many on the outside looking in and declaring that crypto was a bubble. It seems that they may have been correct, given the spectacular falls since the turn of 2018.
Many were caught out with the “fear of missing out” when Bitcoin was flying, and tons of other altcoins were hitting phenomenal highs.
It doesn’t bear thinking about the amount of money that unsuspecting investors lost when the market crumbled in front of their eyes.
But all may not be lost.
According to a report today on cointelegraph it’s just a matter of time before institutional money flows into the crypto markets.
As they state in the article so far it’s Asian money that is heavily invested from institutions in crypto. Not so much is invested from the United States and Western nations.
Bill Barhydt CEO of Abra commented, “I talk to hedge funds, high net worth individuals, even commodity speculators. They look at the volatility in the crypto markets and they see it as a huge opportunity,”
This is probably true.
News also came last week that George Soros and his funds are now gearing up to begin investing in crypto.
This is a huge turnaround from the negative comments that were being emitted from those types back in December when Bitcoin hit $20000.
Maybe they wanted the crash to happen so they didn’t miss a good entry point?
I’m sure the conspiracy theorists will speculate that is the true reason!
There’s been a lot of speculation of late that the recent weakness in crypto has been largely due to the approaching end of tax years in certain countries.
Is this just more wishful thinking on behalf of weary bulls, clinging to any glimmer of hope?
Or is there actually some substance in this?
Well, if we take an example of stock markets then it’s pretty well known that new money flows into the market after new financial years. Sometimes even quarter to quarter.
For instance in the U.K. April 6th is start of new tax year. On this day investors are free to use up their next tax free allowances for pensions and savings accounts.
Many investors in the U.K. trade from an ISA which you can trade stocks in. Each year you can add up to £20,000 and buy stocks.
Investors can also trade stocks in a pension account called a SIPP (self invested personal pension). Again you can add new funds up to your yearly tax free allowance from April 6th.
In addition to this, if people have been underwater on any investments but they’ve made good profit on other investments for which they are facing a whopping capital gains tax bill, the losses can be offset against those gains to bring down your payment.
But to do that you need to book those losses by selling.
Sometime people sell, book the loss, then buy back for holding in the new tax year.
This can push some stocks down slightly. But they begin to recover when the buying happens in the new tax year.
There’s a similar pattern in the United States. Tax year is 17th April.
Any losses taken on your investments can be booked before that date and offset against gains for tax reduction.
So this time there could actually be some substance behind all this chatter.
In the case of Bitcoin and crypto there will be many investors sitting on heavy losses for the current year.
But the flip side of this is that there will also be a lot of profit to tax from the phenomenal gains that many made from ICOs and Bitcoin.
We would rather not pay anything to the Government right?
Hence a lot of loss booking going on.
It remains to be seen whether the investors booking these losses will return to buy again towards the end of April.
But one thing is for certain, it won’t be long before the crypto world has another theory for why the market is behaving as it is.
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