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Late Dec ‘18 crypto rally

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@PandaFace,

A couple of weeks/months back I went 'long' both Ripple and Stellar and got stopped out. Though it met my price indicators based on moving averages my trades still failed which shows 'indicators' being used cannot guarantee success. 

I am short Bitcoin from a trading perspective but I am also long Bitcoin and Ether from way back (couple of years ago) from an investment perspective. I am in profit still on both of them even after a 90% correction and in profit on my short trade on Bitcoin too. 

From a trading perspective for me to go long on Cryptocurrencies (Ether is doing better at the moment) I think due to the high level of risk and extremely large price swings and volatility I do not think crossing the 20 DMA is enough. I would want to see them cross the 50 DMA and possibly even the 100 DMA and heading towards the 200 DMA for me to enter a long position as I still think there could be a further move downwards. This may just be a 'short covering rally' to entice new entrants to enter into long positions. The long term trend even after the recent bullish price behaviour is still strongly downwards. There is still a strong downward bias on a longer term trend chart. 

I am monitoring the price action for Cryptocurrencies daily and I am literally living and breathing them. If you are a day trader or short term trader then it is worth entering but I want to ride longer trends so I need firm price confirmation on Cryptocurrencies before I enter due to the mistake I made on the Ripple and Stellar trades earlier. 

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I'm interested why you would  go long and short on the same asset? Granted via different vehicles (i.e. spread bet and also underlying) but still the same thing none the less? Insight would be interesting.

When it comes to cryptos and ether specifically I think this is a very interesting article and one which everyone in the space should be reading: https://www.coindesk.com/why-the-cftcs-questions-about-ethereum-matter

 Are Ether futures on the way?

The main thing the regulators seem to be worried about is creating links between a new and relatively unknown sub set asset class (of crypto) and real world finance. At the moment the two are very much separate, but adding futures, ETFs etc brings them all together. Especially as soon as you create corporates, corp debt, and a whole host of other real world financials. Match that with manipulation and you have the potential for significant issues.

When it comes to manipulation I think that's hilarious... just look at the big banks, look at Opec, look at governments and price manipulation, currency manipulation, exporting deflationary pressures... its a joke.

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@cryptotrader,

I invested in Bitcoin and Ether using XBT Provider One Exchange Traded Notes (ETN's) a couple of years back when Bitcoin was around the $2k level. These were long term investments which I intended to hold. Now my error is that with hindsight I should have sold when it reached the highs near $20k which I did not and is a big error on my part. However, even after the 90% drop from its all time high I am still in profit on both which is remarkable.

Now my investing strategy and trading strategy are different. When Bitcoin clearly entered a downtrend based on price action I decide to trade that trend as it was extremely strong. This trade was based purely on price action and did not change my belief and confidence on Cryptocurrencies as an asset class going forwards for the future. I had witnessed around three large drops where Bitcoin had corrected around the 60% - 80% mark. This was not a new phenomena for me.

Hopefully the above gives you an insight into my decision making. In terms of Ether Futures, I am not so sure they are imminent. They may arrive in the future who knows but Bitcoin is still the 'Grand Father' of the Crypto Universe and the likes of Ripple are now above Ether in terms of market cap by about $2 billion. So are Ripple Futures imminent?

I agree with your manipulation comments in relation to big banks, currency, etc. It exists in all other asset classes so why should it not exist in Cryptocurrencies? It is just a different style of fraud more suited to the Crypto Universe. I am still positive on Cryptocurrencies going forwards and my view has not changed. If anything the eco-system for Crypto is getting stronger albeit at a slow pace but it is gaining traction. Therefore my investing decision is based on this where as my trading decision is based on price action and trends. Bitcoin's price action and trend has been available for all to see. That is why I am long Bitcoin from an investment perspective and have been for over two years and short Bitcoin on a trading perspective. 

I still think Cryptos have the potential for another leg down and this could just be an 'amplified' short covering rally with new longs entering. If it is not and the Cryptos meet some of my criteria and indicators then I will have to reassess. I am monitoring the price action daily so I am living and breathing Cryptos at the moment and that helps to give me a feel of where the market is going and how it is behaving based on news released. 

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@cryptotrader,

I would only be net neutral if the amount I was long from an investment perspective was the same as the amount I was short on the trading perspective. Even then due to leverage on the short trade I would still not be net neutral.

I will be exiting my short trade on Bitcoin when there is a clear bottom and trend reversal. So I have an exit plan which is more shorter term than the investment plan which is to hold the Bitcoin long position unless my stop loss kicks in at just above break even level which gives me a small profit after covering all costs.

If Cryptocurrencies were going to fail which I do not think they will but if they were then the last one to fail would be Bitcoin. It would be the 'Last Coin Standing'. However, I am positive on Cryptocurrencies going forward and think that once it bottoms around the $1k - $2k levels then a lot more capital is going to enter and invest in these lower levels taking it up a lot higher. 

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Ether running away at the moment, since the lows of mid December, as can be seen in the BTCETH pair.

 

Ether_Bitcoin_20190102_11.55.png

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@cryptotrader,

Yes I noticed this too. I am just monitoring the price behaviour of all Cryptocurrencies. Ripple is particularly interesting as it did not make a new 'lower low' like the others so it seems to have more support and a solid foundation compared to the others. I think Stellar has lots of potential for 2019 but whether this will be reflected in the price is another matter and I only want to trade based on price action rather than news or fundamentals. 

I am long both Bitcoin and Ether from a couple of years ago using XBT products and these are both longer term investments. 

I am looking to trade both Ripple and Stellar 'long' when the next major rally in Cryptocurrencies begin. 

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