Is Bitcoin still the market leader??
The media hype surrounding crypto currencies since last summer and particularly before Christmas with the parabolic upward prices, brought many people flocking to trade the crypto markets. Most of these newcomers had never even traded before, but rushed in because of FOMO. They started buying without having any experience or having any plan. With the recent falling prices, then the short retrace and now prices falling again, many of these latecomers are now like rabbits caught in the headlights. They don't know which way to turn, and nobody can advise, because nobody knows what will happen next in these new markets. We have never been here before. I've written about this paradigm shift in a previous post and it may be of interest to you.
Fundemental trading
I am a pure technical trader, meaning I trade from the price action I see on the charts, as it represents the sentiment in the markets. When I am speculating in the crypto markets for HODLing purposes, I don't look at the charts for a reason to buy. Instead I look into the fundamentals behind the token I'm interested in, and I only then look at the chart for a buy level. The chart only gives me the entry and not the reason.
Technical Trading
As a technical trader, all you need is a chart of the instrument. You do not even need to know the name of the instrument you are trading. You are trading the price chart, not the instrument. It doesn't matter if it is oil, gold, dollar, bitcoin, orange juice, coffee beans or baked beans, price is price.
If you look at the chart below, you will see that I have removed the name of the instrument. It doesn't matter what instrument this chart relates to, as I am just trading the price action.
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Follow the leader
Below is a chart of BTC/USD, and you will notice that the supply level is still holding. Most other crypto charts are looking similar in formation, because bitcoin is the market leader, and we need this supply to break for further upside.
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However, the first chart I posted above is actually of Litecoin and it is plain to see that it is bucking the trend. It is bouncing of demand below rather that reacting of supply above, as the other coins are doing. Now I know that there has been much good news for Litcoin lately and probably is the reason for it's divergence form the crypto markets as a whole, but it is often said "to buy the rumor and sell the news". While I can use the news for HODLing purposes, as a technical trader I must ignore these outside influences and just trade what I see on the chart.
Consider this
If the overall markets now turn bullish to follow Litecoin to the upside, it could mean we have a new market leader emerging. This is far from proven yet and we must wait for the charts to tell us. I am still in the hurry up and wait mode and I will continue to just trade forex for now.
Disclaimer
I am not responsible for any losses you may incur as a result of acting on any of the content contained in this article. I make no recommendations to buy or sell, and this post is purely for information and education purposes. Opinions expressed here are my own, and you should seek advice from a financial adviser.
An intelligent well-rounded post on crypto. I like it and thank you for the coverage. I've not looked into Litecoin but I'm definitely going to soon.
I'm still learning both sides of crypto trading (fundamental and technical) but I already know that if the project doesn't sound like it's going to survive in the future blockchain markets it doesn't matter what the charts say.
Or I'm hoping that's the right way to look at things hehe.
Thx @fulltiltcrypto, and yes I believe you are looking at it the right way. It is really difficult to analyze the fundamentals on crypto, as there is no history to show us what method works best. Development is moving so fast and who knows what game changer can hit us this year. EOS looks like a big competitor to Ethereum this year, but it will probably come down to where the DApp developers stick their hooks. Maybe Ethereum has too much of a head start already, but maybe it is too slow and developers will move to EOS. History has shown that it is not always the technically better product that wins out. For now, I believe it is best to stay nimble and not get married to any one project.
A lot of people like EOS but I'm not feeling it. I know Dan Larimer is involved and that it has a $1bn dApp fund but it wants to be the big kahuna and it's too early for that play. For instance Cardano wants to be a platform that brings financial institutes to countries that don't have the infrastructure. Ripple wants to be the trading connection between fiat and crypto. NEO wants to be a government compliant platform. Qtum wants to be an enterprise platform. They have goals which appeal to different dApps developers so they aren't competing with everyone. This theoretically allows growth (even though Cardano picking Haskell as a coding language is mental). EOS on the other hand just wants to go toe to toe with Ethereum and that in my opinion is a risky play. Especially when AELF, NEBLIO, LISK and others are doing the same thing.
Obviously this is my rookie opinion and now I've said it, EOS will be worth $200,000 per coin tomorrow hehe. Yet I can't help how my gut feels on this.
I was using EOS as an example more than a recommendation :), as most Steemians have an attachment to it through Dan.
As I have written in earlier posts, I am a forex trader who has come to Steemit to learn and tread the crypto path. There are too many, lets use the term, un-quantifiables yet in crypto currencies to get me overly excited about this space. I think I saw a figure of 59% of all coins or tokens failed in 2017.
I am throwing my forex trading head at crypto to see how my trading methods would hold up here. I am however picking up some coins of assets I like, for a HODL in small lots, when I believe they are at a buying level. Liquidity is much too low yet for me to go trading, as one whale can blow you out of the water.
I'm delighted to have your rookie opinion on cryptos here anytime, as you certainly look to have more than a see and buy approach. Thank you, and enjoy the journey. Talk soon :).
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Finally i am starting to find some people that are involved in trading that don't sell snake oils around here.
Came here from the @aggroed post, and i liked what you write.
I want to see what else you have to say.
I'm starting to find similar people @phgnomo 😎. I've read through a number of posts on your blog and I can confirm that you are an original thinker, and I believe you have much to offer this community. Your topics are right up my street, which is also a help 😃. It's great to meet you 🤝.
Who knows. :) Bitcoin is the strongest for now but
things change pretty fast. Many cryptos gain popularity and more people invest in not just one ICO.
Upvoted :)
Indeed @jacinta.sevilla, and when it comes to ICOs, I prefer to use the word speculate rather than invest 😉. It will certainly take time for all this to play out, and the big guns have to enter the markets yet. Where their money goes will determine the winners and losers and not our offerings.
Hehehe yesssss haha so true. Right :)