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Market analysis of May 27, 2019

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Marketcap

The marketcap has been moving up (+8.84%) since yesterday. The total capitalization is 245.173.528.776 USD.

Bitcoin totals 154.422.155.748 USD of capitalization for a dominance of 57.10%.

Ethereum’s marketcap is 28.381.944.079 USD, followed by Ripple with 17.218.911.523 USD.

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Bitcoin

The BTC broke its triangle upwards reaching a high point at the $8939 level! Currently it is evolving at the level of 7720$

What is the current situation?

  • After such an increase, consolidation is expected. The important level close to the current price is $8800. However, the big psychological resistance is at $10,000. If the buying force remains so strong, the price could rise even higher to reach this level.

What to do about it?

  • At this level, if you are already in position, raise your stop loss to the 8300$ level. If you are not yet in position, wait for a return to the 8300 – 8400$ zone or a confirmed break of the 8800$ level.

  • The supports of the day are at 8500$ – 8300$
  • The resistances of the day are at 8800$ – 9160$

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Ethereum

  • Like the BTC, ETH broke several resistance and reached a high of $273.85. It is currently at the $268.75 level.

  • From a technical point of view and if you look at the order book, the price is supposed to go down, however, it would seem that an oblique support supports the price, if it holds, the price could go up.

What to do about it?

In the short term, ETH operates in a triangle of consolidation. If you are already in position, place your stop loss under $260. If you are not yet in position, wait for a break in the triangle’s resistance at $272 or a return on support within $260.

  • The supports of the day are at 260$ – 250$
  • The resistances of the day are at 272$ – 280$

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Conclusion

BTC and ETH are in a consolidation configuration after a large rise. place yourself at the break of the resistance or on the rebound of the support.


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Swing Trading, a winning strategy ?

The Swing trading is often the starting point for those seeking to venture into trading, and perhaps move from an investor status to an active trader status. The reasons are simple: it is a medium-term trading and can complement other trading styles such as day trading, trend trading, or scalping. According to Investopedia, the typical holding time for a swing is 1 to 4 days. For crypto, however, which is traded 24 hours a day, 7 days a week, we can adapt our rules and we no longer need to be so strict about the period of detention. In cryptos, while the conditions are still valid, you must stick to your position.

What is a swing in a market?

The price of a crypto can be defined as the balance between supply and demand at a given time. This is the price at which a buyer and a seller agree to carry out a transaction. Over time, these equilibrium prices may rise or fall, or even laterally within a range.

A typical market trend is that prices move from a contraction range to an expanding range. The gap between the two is called a “break-out”, and that’s where we see strong and fast price movements to a new area on a graph.

One way to see the mechanics of this is to compare the contraction of amplitude to a spring that would be compressed. Bursting occurs when all the spring energy is released, which can occur either upward or downward (sometimes called Bart Simpsons in the Cryptos market). We now have the beginning of a “swing” on the market.

If this break is followed by a series of higher peaks and higher funds in the “wave movements”, the market has formed an upward trend. If the opposite is true, we have a downward trend. Each wave is considered as its own swing on the market.

As swing traders, our job is to catch the most violent part of this movement – the escape. Some traders choose to hold on to the trade by several swings and thus follow the trend, while others prefer to sell once a predetermined price target has been reached.

How to find the right Swings?

Most of the time, prices of any negotiable value fluctuate within a certain range. On the stock market, it is often said that the market varies up to 80% of the time.

To look for potential trading opportunities, one approach is to first look at your charts in one of the longest periods, for example the daily period or the 4-hour period. Once you have identified a promising position, move to a shorter period, such as the one-hour period, to look for specific entry opportunities.

In general, there are three important factors to consider when looking for an entry as a swing trader:

1- Fluctuations should occur in the same general direction as the trend that is emerging in the highest time frames.

2- If you exchange cryptos, look for momentum in pairs that share similar characteristics to the one you exchange. For example, if you are considering exchanging a privacy crypto like Dash, the idea is to see how other coins like Monero or Zcash do.

3- Carefully assess the trend. Is it getting stronger or weaker? A downward trend could mean that it is about to change direction, while an upward trend could mean the opposite. Another question is whether the volume of transactions still supports this trend? Upward trends with a gradual increase in volume are considered to be the most robust.

? As swing traders, we have to be aggressive when we detect good opportunities. You can’t afford to miss out on good opportunities. Make sure you earn enough on your good trades to compensate for the inevitable losses that will result.

? Similarly, a swing trader must also know when to stay out of the market. It is just as important to recognize the conditions that keep you away as it is to be aggressive in the right conditions.

? Finally, remember the words of the legendary trader Jesse Livermore: “There is a time to go long, a time to go short, and a time to go fishing.”

Initial Exchange Offerings (IEOs): The New Alternative to ICOs

[vc_row][vc_column][vc_column_text]Initial Exchange Offerings (IEOs) represents a more advanced phase of ICO and
looks more like the future we anticipated. Following the meteoric rise of ICOs in
2017 and 2018 and the subsequent decline, there was an urgent need for different marketing models. High-risk activities related to ICOs meant that it had to be phased out and replaced with more secure alternatives such as IEOs.
What are IEOs?
IEOs are initial token offerings just like ICOs but do not take place on the token issuer’s website but on a crypto exchange platform. There are many reasons as to why crypto exchanges are so popular and attract multitudes of people. First, they have an extensive variety of coins, multiple payment methods, and robust user protection. Popular crypto exchange platforms are compliant with AML/KYC and include a procedure for all partners to adhere to.

Listing a token at the exchange requires that the company be compliant with laws in the country of origin and meet the legal requirements of where the exchange is registered. The added security layer ensures that crypto-scams are effectively kept out.What is the difference or similarities between ICO and IEO?ICO forms the basis from which IEO has emerged. It would be impossible to have IEO without ICO. On the other hand, ICO is a blend of IPOs (initial public offerings) coupled with fundraising and crowdfunding. The similarity between ICO and IEO lies in the preparation procedures. However, with IEO, you have access to distribution channels and the user base of the exchange. Primarily, IEO offers a broader audience reach if you list in one of the reputable crypto exchanges. Also, a variety of activities such as token sale, promotions, and distribution take place in the platform.
Who is IEO for?
While ICO was widely publicized, some companies operating within or outside the crypto-sphere may have missed the opportunity or simply were not ready for the new blockchain technology or tokenization. IEOs provides a more robust alternative to raise funds and companies that join will have a more extensive network and a bigger opportunity to make a profit on the exchanges. Investors and traders will have more trading options, and the possibilities to make a profit will be higher.
How to get listed in an exchange
It is daunting and time-consuming for new investors to find a suitable exchange that is willing to accept them. The high interest in IEOs means that potential slots in exchanges may already be filled early in advance. Your best  chance is to work with a service provider who already knows about crypto
marketing and has a partnership with these exchanges.
Legal aspects
Compared to ICOs, IEOs are more advanced in terms of legal issues. Your token has to be a utility token in most cases with a legal opinion supporting this.  Security tokens are rarely accepted.
Advantages of IEOs
IEOs have a considerable edge compared to ICOs, here are some advantages:

  • Safety and security – customers’ funds are protected through compliance procedures, therefore providing a safety net.
  • Quality – the high level of competition for listing projects on the exchanges ensure high performance, and only companies with quality can survive.
  • Transparency –  the higher level of regulation has ensured all activities remain open and under scrutiny.
  • Convenience – since users can invest directly from their exchange’s account, the time taken to transfer funds and set smart contracts is effectively eliminated.
  • Equality – IEOs provide a wider pool of investors by setting the investment cap at a more accessible level to more people. This prevents the emergence of the so-called ‘crypto whales.’

How to succeed with IEOs
Your marketing strategy will play a major role in helping you build a supportive community. This will typically require a lot of effort and dedication. Just like ICOs, you also need to come up with an efficient team to showcase your best to investors. You will also need a whitepaper and unique propositions that will make investors want to partake in your company. Press releases through major
crypto news media can help get the word out there. Make sure you keep communicating with your community as often as possible.
IEOs are proving to be the most active platforms for attracting investors, professionals, and other crypto users. Crypto traders make their buck from daily fluctuations and will typically spend a big chunk of their time on the exchanges. IEOs have a clearly defined compliance procedure, which makes it ideal for all crypto enthusiasts to carry on with their activities in the exchanges. Therefore, they become a hub for crypto profits.

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Bitfinex/Tether Saga important perspective

As you might now, we at 4C have always emphasized to be suspicious about Tether and we believe it is safe to stay away from it. Here is what we think about the recent happenings.
On 25th April 2019, Letitia James, the New York Attorney General (NYSAG) announced that she had a court order restricting Tether, the issuers of the USD backed coin tether (USDT), and iFinex, the operator of the Bitfinex exchange from “further violations of the New York law”.
In her statement, State Attorney General Letitia said the iFinex Inc. had been raising client and corporate funds to hide an $850 million loss that had occurred mid last year.
On 26th,  the NSYAG’s office followed up the earlier announcement with another statement indicating they had obtained an order compelling iFinex and Tether to release certain documents to them.

The cover-up

The NYSAG’s statements had uncovered dubious dealings that have been going on in iFinex and Tether. The statements revealed that by mid-2018, Bitfinex had had $850 mln missing. The $850 mln is apparently being held by Crypto Capital, a third party payment processor that Bitfinex used. Crypto Capital, claimed that the money had been seized by authorities in various countries. Bitfinex’s management, however, suspected that principals of Crypto Capital may have been engaged in fraud.
How is Tether involved in the saga?
By November 2018, USDT was supposedly backed by USD. The cover-up, however, crumbled when Tether transferred $625M to Bitfinex. In March 2019, Bitfinex ‘channeled back’ the $625M to Bifinex.
And then, in March 2019, Tether extended a $900M credit line (secured by iFinex shares) to Bitfinex, with which Bifinex was covering the gaping hole in their finances. Bitfinex has used up $700M from the credit line. As per NYSAG, Tether and Bitfinex are clearly misleading their investors.
 

Bitfinex response

In response to the NYSAG’s court order, Bitfinex has released a statement saying, “The New York Attorney General’s court filings were written in bad faith and are riddled with false assertions, including the purported $850 million ‘loss’ at Crypto Capital,”
Bitfinex, has also made it clear that they are “committed to fighting this gross overreach by the New York General office”.
Crypto market’s response
The news had naturally hurt the prices of almost all crypto-assets, with only exceptions being Tether’s main competitor stable coins like TrueUSD (TUSD0 and USD coin (USDC) that had risen by 1 to 2 percent against USD.
How are cryptocurrency investors and opinion-forming accounts reacting?
 

Here are interesting early twitter reactions to the Bitfinex/Tether saga:

James Todaro@JamesTodaroMD said:
“Bitfinex announces that the $850M has been seized. Who knows when funds will be released (years?).
Obviously this wasn’t announced earlier bc of the effects it will have on Bitfinex & the mkt. This is not going to play out well. Don’t be fooled that this won’t affect prices.”
Jesse Powell@jespow Replying to BTCVIX
“Unfortunately, fiat banking is a black box. We don’t know if there’s a problem at CC or at the bank. No doubt BFX still carries the USD on the balance sheet but if it’s frozen/seized, who knows how many years it could take to become recoverable. Gox still going 5+ years.”
What does this Bitfinex/Tether storm mean to cryptocurrency investors?
Bitfinex has pretty much made it known that they would no longer cooperate with New York Attorney General’s office. Their defiance will only result in arrest warrants being issued against persons involved in the Tether/Bitfinex saga.
NYSAG is also likely to expand the previous restrictions on funds being moved to an outright cease and desist. Exchanges should be delisting Tether by now because if they don’t, the order will expand to crypto exchanges being prohibited from trading Tether.
And because Tether/Bitfinex has made it clear they would defy the NYSAG’s office, federal authorities will certainly zero in on them soon, and from there it will be a blood path.
This is the best time to jump off USDT’s sinking ship because the situation can only get worse. Bitfinex/Tether have had clouds hanging over them for years, and now with this inevitable face-off with federal agencies, their story can only end tragically.
Today is the best time to exit Tether completely. And if you’re trading on an exchange that uses USDT, move it now, not tomorrow. There are plenty of alternatives.

Postscriptum

This morning news broke that Tether is 74% backed by Fiat & market cap increased by $4bn. This is not good news!