Crypto Market Outlook 05.29.2018

the root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.

Satoshi Nakamoto on February 11, 2009

Bitcoin open source implementation of P2P currency

Crypto Market Update

Our weekly crypto market update uses a standard set of information sources in order to cut through attention grabbing headlines and get a less biased opinion of the market. 

Crypto Indexes

The Bletchley Indexes “offer the most thoughtful and consistent approach to index construction” according to CoinMetrics. 

Original “top X” indexes were launched in June 2017, followed by a market-wide index in December 2017 and sector specific indexes in February 2018. In total, there are 13 Bletchley indexes, with charts over various timetables available for each on their site.

Below is an alternate view of the performance based on the downloadable data made available by Bletchley. This view is intended to give a side-by-side snapshot of a handful of indexes.

Observations

  • Bletchley 10 and Total Market down significantly vs USD over past week (-20%)
  • Very negative performance for B10 and BTotal over last 3 months
  • Even Indexes continued to underperform weighted indexes
  • Platform, Application, and Currency indexes all down against USD and BTC over last week
  • Only the application index remains positive over last 3 months vs BTY, yet still significantly underperformed USD

 

Global Crypto Charts

For a quick look at the global markets from another perspective, Coinlib.io provides simple charts with a lot of info, including Bitcoin marketshare, a visualization of the top 20 currencies by volume and market cap, and more.

Total Market Cap of Cryptocurrencies: $326.65 billion ( vs $379.72 billion one week ago)

Market Share of Top Cryptocurrencies

Bitcoin’s market share has climbed to 38%, a recent. Looking longer-term, Bitcoin continues a long-term declining trend, with new currencies such as EOS and BCH taking some of that market share.

Market share of top 20 cryptocurrencies

The top 20 currencies (by market cap) currently make up roughly 86% of the total crypto market share.

TradingView Technical Indicators

Based on data and info from TradingView (Click  for 30% off a pro subscription)

Scores based on the cumulative total of positive and negative technical indicators signals over three time horizons on Trading View. Scores are weighted by multiplying total as follows: daily (x 1) weekly (x 2), and monthly (x 3). 

  • BTC and ETH have turned much more negative vs USD since last week
  • ETH signals look somewhat better than BTC

CRYPTO PERFORMANCE

  • BTC down over 11% vs USD over last week and nearly 30% over last 3 months
  • ETH and BTC have performed similarly vs USD over last year

 

Google Trends

 

Google Trends have have shown slowly declining searches out after falling significantly in February.

I’m tempted to stop tracking this, as I believe there will be fewer searches as the public gains knowledge. However, significant price action could still lead to search volume surges.

WooBull Charts

NVT Ratio This long-term cycle tracking ratio has spiked significantly in the past week, continuing the uptick seen in the last few days before last week’s update. The ratio is very high and suggests a correction could be due and that this is the end of long-term cycle.

NVT Signal -This short-term signal has moved down slightly over the past week from 122 to 115. It has broken a support trend, suggesting bearish price movement in the short term.

In the original post introducing NVT Signal, 150 was indicated as an overbought signal.

Willy Woo also recently published a Tweet thread where he suggested BTC may go to $5500-5700 next.

CoinMetrics Charts

CoinMetrics has provides great charting tools for a number of top cryptocurrencies. Kalvichkin’s NVT is a regular check for checking short term trading signals. 

Kalvichkin’s NVT – Similar to NVT Signal, Kalvichikin’s NVT has dropped recently, indicating a bearish short term market.

Articles of Note

“Yesterday we were provided with an incredible reminder of why Bitcoin’s slow and steady + simple approach when it comes to development is the right call in the long-run.”

Marty’s Ƀent – May 23rd, 2018 – Issue #238
Master List Archive Feed

“The more complex projects try to get in an attempt to create “fairness” the bigger their attack surface gets. Verge thought five mining algorithms was a clever way to make their network fairer, but have discovered that they just made the network more insecure. Apparently, Verge wasn’t the only chain to experience an attack this week”
1

“It’s interesting to think about what the landscape will look like 3–5 years from now, and which DEXs will manage to carve out significant market”

Token Economy #50: Paradox?
Yannick Roux Token Economy – Medium

“And Coinbase isn’t the only centralized exchange entering the DEX arena, Binance is also building its own version. It’s interesting to think about what the landscape will look like 3–5 years from now, and which DEXs will manage to carve out significant market share independently and how, if at all. ”
2

“Content provided by creators gets instantly tokenized, published to the Fan Bits marketplace, and pays out Ethereum to the creator after each sale”

Announcing Fan Bits: A DIY crypto-collectible creation platform
Medium

“While there’s clear demand for this kind of asset, creating crypto-collectibles is a highly technical pursuit that requires extensive development work. We’re ecstatic to announce that that’s about to change.”
3

“It manages more than 20 million accounts, almost as many as Fidelity Investments, twice as many as Charles Schwab and about as many accounts as Vanguard has investors.”

Move deliberately, fix things: How Coinbase is building a cryptocurrency empire
Brian Fung Washington Post

“But in many ways, Coinbase styles itself the anti-start-up. Its attitude, both hungry and calculating, may be the key to its survival as it seeks to sell the world — from mom-and-pop investors to massive hedge funds — on the idea that it has become to cryptocurrency what Google is to Web searches.”
4

“Our final estimate from looking at the UTXO age distribution is that between 3–3.8M BTC are lost.”

Bitcoin Data Science (Pt. 2): The Geology of Lost Coins
Dhruv Bansal Unchained Capital Blog – Medium

“We believe bitcoin loss occurred over two distinct “cryptogeologic” eras:Systemic loss: a large cohort of BTC which was mined together and lost together in the earliest days of Bitcoin by Satoshi and the other first miners. (Bitcoin’s carboniferous period.)Incremental loss: BTC lost by individual users gradually over different periods of time.”
5

 

Our Take

Short-term: The crypto market continues to look bearish in the short-term. We’re still bullish long-term and believe there are interesting projects right now that will establish themselves for the long term.

  1. https://mailchi.mp/4c3c61136fe8/martys-bent-may-23rd-2017-issue-238
  2. https://tokeneconomy.co/token-economy-50-paradox-d8f2270c0dce
  3. https://medium.com/@fanbits/announcing-fan-bits-a-diy-crypto-collectible-creation-platform-7028616e13e1
  4. https://www.washingtonpost.com/business/economy/move-deliberately-fix-things-how-coinbase-is-building-a-cryptocurrency-empire/2018/05/17/623d950c-587c-11e8-858f-12becb4d6067_story.html
  5. https://blog.unchained-capital.com/bitcoin-data-science-pt-2-the-geology-of-lost-coins-79e5a0dc6d1?source=rss—-c6f7bef2c97e—4

Coinbase earned over $1 billion in revenue in 2017

Coinbase, the bitcoin trading broker that has exploded in popularity as cryptocurrencies surge and nose dive, has encountered an unusual problem for a Silicon Valley startup: Too many investors are trying to get in. The six-year-old company crossed $1 billion in revenue last year, Recode has learned from industry sources, a tremendous rise fueled by layman interest in both bitcoin and competing virtual currencies that users can buy and sell through the app.

via Bitcoin broker Coinbase booked $1 billion in revenue last year at Recode

More on Robinhood’s plan to offer free crypto-trading

By essentially using crypto trading as a loss leader instead of its primary business like Coinbase and other apps, Robinhood could substantially expand beyond the 3 million users it already has. Simplifying trading and tracking could bolster Bitcoin and Ethereum. And by combining it with traditional equities trading in a single app, Robinhood could further legitimize the cryptocurrency craze.

More on Robinhood’s plan to offer free crypto-trading and the pressure it put’s on Coinbase, while also helping to legitmize crypto to a degree.

via Robinhood adds zero-fee cryptocurrency trading and tracking at TechCrunch

Coinbase’s masterplan to compete with traditional brokerages

What’s lost amid all of this excitement, however, is that Coinbase is quietly and rapidly executing a classic “Trojan Horse” strategy that could ultimately end up with it putting traditional brokerages out of business.

via The Coinbase Master Plan for World Domination: How Traditional Brokerages Are Being Set Up for Disruption at Never Stop Marketing…