All the Crypto News That’s Fit to Write About (But I Didn’t… Because I was Traveling)
Here is a crypto news round-up for May 21st – May 30th 2018 to get you caught up on everything happening in the crypto space.
Below are some the most important things that happened in this rather important week (each of which deserve their own article; but didn’t specifically get one… because I, the main author of this site, was traveling).
- Ethereum might be a security… and so might all ICOs. This bad news was first reported earlier in the month. At the time it had zero effect on crypto prices. This was because crypto was in a bull run when the bad news dropped (one hint that crypto is manipulated honestly). However, once crypto started to correct I suspect the existing bad news started to have an effect. If you want to understand the current correction, you should also understand this.
- U.S. Launches Criminal Probe into Bitcoin Price Manipulation (the main reason for the current correction). The Justice Department has opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies. This investigation is being done with the help of the Commodity Futures Trading Commission (I think they actually may have initiated the investigation from what I can tell). This announcement was made by a Bloomberg reporter with inside sources. This came at a time when the crypto market was already in decline and it lead to $1k drop in Bitcoin (and even bigger percentage drops in other cryptos). In another market this might be cause to panic, but in crypto “FUD” like this, merited or not, is common place. It is likely that manipulation accounts for some of the downward and upward price movement in crypto, and this investigation might help to shed light on exactly what is happening (and perhaps how that relates to the futures market). I think it is clear that spoofing happens all the time, because i have eyes and watch the markets and therefore see it happening constantly… but we will see. That said, no negative news of this caliber has brought down crypto yet, and it is unlikely that this will either. Personally, I’m re-loading on the correction and going to bet this isn’t the end of crypto (clearly a risky bet, but of course better than buying high later if this is not in fact the end).
- Coinbase Launches Coinbase Pro (GDAX is now Coinbase Pro). I haven’t gotten to use the 1.0 version of this, but you can check it out when you go on GDAX by clicking the Coinbase Pro button at the top of the screen. Apparently Coinbase Pro is the new GDAX and is meant for retail customers who want to trade cryptos currently traded in the Coinbase ecosystem. This could potentially be exciting as it might get some who currently only use Coinbase to actually trade crypto. I think the concept is that since they are creating new tools for institutional traders they wanted to offer something new and improved for retail customers too. From what I understand there will be no more GDAX and GDAX will become Coinbase Pro (that makes it easier for me to explain that Coinbase/GDAX are two sides of the same coin; yay.)
- EOS gets some accusations of shade thrown at them. There was a charge that EOS founders were dumping Ether on the open market (the evidence is there, recently Ether has been getting dumped while EOS pumped). Let’s just pretend that is true for the sake of illustrating a point (no way to know if it is the case or not). Here we can learn an important lesson. When we all manically throw our Ether at an exciting project like Tron or EOS, we consolidate vast fortunes in the hands of the few. Those fortunes aren’t in the dollar form, they are in the Ether form. On the offhand human greed kicks in, and let’s say by the off chance the market begins to crash, there is this set up where said humans can dump Ether, drive the price down, pump their own coin, and thus become filthy rich while pushing down Ether and pushing up their own coin. EXPECT this. Ethereum has created an ecosystem where this gambit can be run, there is really no way to stop it. If EOS and Tron don’t, another down the line still could. On the plus side, a vulnerability was recently discovered with EOS and they patched it right away (this is the correct way to respond to such things).
- SEC Continues to Crack down on ICO scams and Other crypto scams. The SEC has been in crackdown mode on the worst of the worst of ICOs and crypto scams. The latest one is cracking down on the founder of an ICO who claimed to have partnerships with the FED, Disney, and PayPal. HINT: No ICO has partnerships with any company like that. In fact, no crypto I know of has any partnership with any company that is not specifically in the crypto space. At best you have a few instances where a company starts an ICO, like with the owner of Overstock or Telegram, or where a company embraces a coin or coin trading, like with Square, or where a company invests in a company that acquires crypto property, like with Goldman, Circle, and Poloniex.
Mostly though, what happened is this: The popularity of crypto continues to grow, we continue to pay for the pump of Nov – January (in terms of the pattern being formed and the investigation into price manipulation and the relation to futures products), and we still face challenges with the new technology Ethereum-like entities have created (where they allow for tokens to be created by anyone, and since some humans are shady, we get shady tokens, which are then consolidated in the hands of those who can dump them on the market). It is a great time to be in crypto, and honestly could very well end up being a great time to invest… but you MUST watch out for shrapnel and be ready to take some serious hits to your wallet. Greed and bad coins are rampant.
All that covered, check out my blockfolio screen grab below. This really tells you everything you need to know about crypto in 2018. Forget the SEC, DOJ, EOS, ETH, or BTC drama and just look at that chart pattern. The chart pattern says “I was pumped, then I created a fractal like pattern, and i’m finding an equilibrium.” That pattern occurs all the time in assets. I would expect it to 1. break up and form a new bullish pattern (the best case) or 2. gradually fall down like it was in 2014 – 2015 (the worst case).
To that I would say I see two trends occurring: 1. more institutional adoption and brand awareness 2. declining volume as retail investors give up (look below, with the decline after each hump you can see the grey bars shrink, those grey bars are volume, volume is declining as institutional trading ramps up… that means retail trading is declining harshly… to see another bull run like 2017 we need to see new retail adoption; so this is potentially not good).
Still, to end, even though I see retail volume dropping and the US cracking down, I do not see crypto ending. Instead I think the institutional adoption and the crackdowns on manipulation will ultimately lead to a future chock full o’ crypto. I want to be around for that, and I want to be HODLing for that. So while I won’t be throwing all my money at crypto, I will be averaging down until the correction stops and aiming to time the bottom.
TIP: RSI on the daily candles is very low right now. It bounced when it touched the oversold mark like clockwork. This tells me this is not the end, but rather just another cycle and another wave. If one jumped ship every time there was a wave they would not get very far sailing. Let’s put it that way. If anything the time to jump ship is when the daily RSI is high. For me I’ll call the bluff and accumulate… everyone though has to make their own decisions, because this is a volatile space where we can all lose it all at any moment.