Trade Update (May 14, 2019)

CoinSheet #255

The abuse of a thing does not forbid its use.

— Latin Proverb


Trade Update

Hello folks,

You haven’t seen me share any of my trades for over a year (besides my bitcoin entry at around ~5k, before the dip to 3.2k).

This was primarily because I wasn’t doing much trading.

That’s not to say there weren’t any opportunities to capture alpha (using bitcoin as a benchmark), but these were not trading ideas I felt comfortable sharing with the casual crypto enthusiast, (this is not an insult, I consider this everyone who isn’t a full-time degenerate, such as myself).

And for all intensive purposes, this is what you should see me as, a crypto degenerate.

I’m not a wise-oracle, nor do I have any secret sauces, nor do I hear things in my sleep. My insights are about as useful as Bran’s insights in this latest season of Game of Thrones.

Don’t forget I'm just a boy, standing in front of a crowd, asking them not to trust me.

And if you’re okay with that, shame on you. Keep reading.


Ethereum

I mentioned a few weeks ago I mentioned that I was watching ETH. Here are some more of my thoughts. This isn’t meant to be a definite review, but more so my general thoughts when I think about ETH.

The Bear

I’ll start with the my general bearish thoughts (to try and scare you).

There is too much ETH.

After the last Ethereum hard fork, block rewards were reduced from 3 ETH to 2 ETH (a reward adjustment of -33%).

This means the total new ETH supply will reduce from 7.4m ETH per year to 4.9m ETH per year.

The problem here is that’s still a shit load of useless ETH.

Most of the ETH demand we’ve seen historically came from ICO’s. Nowadays ICO’s are way less prevalent then they were in the past.

So who is going to be buying your ETH bags, and why?

The Bull

My general ETH thesis is that I think it’s one of the few coins that can enter the crypto zeitgeist and become something more of a money like BTC and LTC.

Let the folks dance around in their funky shirts and do their silly dances, and let ETH become a money (this isn’t to take away from any brilliance where it’s due, I just don’t care).

I don’t care about web 3.0, sharding, staking, raiden (lol), plasma (lol^2), Constantinople, Byzantine, or any other fancy lingo. I care about money.

And so do a lot more people.

E*Trade is close to launching cryptocurrency trading. And when they say cryptocurrency, they mean bitcoin and ethereum. And it’s not a stretch to suggest that other retail trading platforms would join them (i.e., like TDAmeritrade).

The U.S. Commodity Futures Trading Commission (CFTC) said they’re open to ether futures contract. Like, how do they even know what ethereum is? have you heard them say anything about EOS futures? Or how about Verge futures? Even Litecoin futures? The fact that they’re even talking about ethereum should speak volumes (because these folks tend to be grumpy older white men).


The Technicals

joaquin phoenix thumbs up GIF

Ascending Triangle

Ascending triangles are typically a good indicator of accumulation.

And it look like we’ve had a bullish breakout. And this triangle suggests a target somewhere between 280 and 300.

And some resistance levels for you to keep an eye on.

ETH/BTC ratio

The ETH/BTC ratio hasn’t been this low in long time, and we’re sitting at a major support level.

If this support level breaks, we should see ETH going much lower (this can be bullish or bearish depending on your outlook for ETH).

The TD (on ETH/BTC)

What I’m interested in here is that we might we a perfect TD9 setup + 13 countdown (If you’re interested in what this means, you can read some more about it here).

But basically it’s a strong signal that there might be a reversal.

Volume

There is some obvious bearish divergence on the ETH/USD pair.

Other indicators

Indicators (oscillators in general, like RSI, stochastics, etc..) are going to be bullish for ETH/BTC ratio, and bearish for ETH/USD pair.

In a bear market, I’m interesting in preserving USD.

In a bull market, I’m interesting in accumulating BTC.

And right now I think we’re entering a bull market, hopefully one that is slower then what we’ve seen in the past.

In conclusion

So yeah, I bought some ETH, and am likely going to hold it until July. Maybe longer, who knows. I’ll update ya’ll.

-Dmitriy