Ragdolled

Kevin Grimm
Sep 6, 2018 · 5 min read
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Word on the Street

Everyone still having fun out there?

Yesterday’s meltdown was one for the record books. Bitcoin collapsed nearly 15% (~$1,100) in a mere 15 hours. There hasn’t been a shock of that magnitude since early March… when it happened twice. Prior to that, it was early February during BTC’s capitulation down to $6,000.

Several outlets tied the implosion to Goldman moving their crypto trading desk blueprints to the back burner. However, that’s not what started the fire — the market has been warning of a dump for days.

From a technical perspective:

  • Trading in a rising wedge (bearish pattern) for ~2 weeks.
  • Bearish divergence (sell signal) on RSI indicator on 4-hour charts for ~1 week.
  • Large spike in sell volume (28.688K versus 5.789K in prior candle) at long-term resistance on September 2nd.
  • Stochastic RSI indicator on 1-day charts overbought (sell signal) for ~2 weeks.

Caption: $BTC 4-hour chart (Bitfinex)

There are more red flags, but clamoring on about indicators that are at times questionable at best won’t get us anywhere fast. Besides, drops are easier to label after the fact. Real-time charting is, under all definitions, NOT a cakewalk.

Something worth harping on?
Where things potentially could go from here. And yes, prices don’t matter for ecosystem growth — but there’s no denying that macro movements impact conversations that folks have at/in their respective water coolers and chat groups.

On that note, let’s turn to 2 people who are loads smarter than us:

  • Murad Mahmudov is predicting more fallout in the next 3 months. His reasons? (1) We don’t need heaps of currencies, and (2) Bitcoin’s monetary network is too well established.
  • Nic Carter doubts Masternode coins will survive the bear market. Remember, stake xx coins → become a Masternode → get dividends. When prices fall, stakes *are* pulled out and token models could unravel.

P.S.: Goldman’s decision is, if anything, bullish. They’re focusing on custody first… that’s a good thing. After all — it’d be a real shame if clients wanted to trade products and there was nowhere to store them. Smart move by GS.

**None of this should be considered financial advice***


Other News

(1) Pump, Pump, Pass
In case you missed it, pot stocks are sky high. For instance, Canopy Growth Corp (CPC) has more than doubled since Corona’s parent company announced their 30% stake in the company on August 15th.

Others sparked similar frenzies:

  • Tilray (TLRY) soared ~300% in August.
  • Cronos Group (CRON) jumped 100%+ after Q2 earnings.
  • Emerald Health Therapeutics (EMH) rallied ~65% from August lows.

But hold on just a moment… those outlandish returns only happen by speculating in altcoin markets. That begs the question: who’s pushing all this weed?

Plot twist… it might be crypto traders
Joe Weisenthal floated the proposal on Twitter yesterday. By all means, it checks out. A number of folks relatedly suspected a market migration from crypto to weed stocks.

There’s a lot of overlap between the industries (h/t @jfberke):

  • Emerging sectors
  • Volatility
  • Heavy regulation
  • *Lack* of institutional capital
  • Large risk appetite

Weisenthal brought up a great point: “it’s hard to justify having money in some cr-p coin at the same time as Canopy is up 10% a day”. By that logic, today could get interesting after Wednesday’s carnage.

And if you weren’t sold already, just follow the scammers. Remember James Altucher’s crypto ads? Looks like he found himself a new gig…

Source

(2) Are we there yet: curation markets
Decentralized Reddit is here, people — at least in beta mode. The platform is called Dmunity. Its end game? Put content control into the hands of users rather than platform moderators, advertisers, or other third parties.

Could Dmunity have legs?
Upvote content that you care about and downvote all spam into oblivion… and you get paid?!? At first glance, the idea is certainly not unappealing — until remembering the value of tokens earned probably won’t qualify as a dependable income stream.

Then there’s the more obvious problem of siphoning users away from Reddit, which has better (1) content and (2) features. Per Jacob Horne, Dmunity’s solution for their chicken-and-egg problem is to enable account imports from Reddit.

And more Reddit karma = more Dmunity tokens (h/t @Flynnjamm). With karma whales hoarding the supply, what could possibly go wrong?

To be blunt… everything. Dmunity is a neat idea, but we think it may be too early. But hey — tokenized loyalty points never hurt anyone (right?). Bring on the next wave of updates.

(3) Spacemesh protocol meshes with VCs
Crypto is often called the Wild West, though we are far from reaching the Final Frontier. There’s a lot of uncharted territory out there, leaving tremendous opportunity for pioneers to build technologies that could be one of blockchain’s FANG stock 20 or 30 years down the road.

Consensus mechanisms get a lot of press because people argue that Proof-of-Work is (1) wasteful and (2) too darn expensive. While it’s slightly more complicated than that, a desire to replace PoW has led to the funding of multiple “next-generation” blockchain protocols.

Spacemesh is the latest flight crew to receive funding via a $15 million Series A investment led by Polychain Capital. Their standout entourage of devs & academics is exploring a futuristic protocol called Proof of Space Time (PoST).

The concept is simple: Store data on your hard drive, i.e. prove that you committed space. There’s a catchier, in-depth explainer video on Spacemesh’s website here.

Brain Fuel

  • 7 min read: Security Token 2.0 Protocols Part III: Fund and Derivative Tokens (Jesus Rodriguez)
  • 7 min read: Beginner’s Guide to Blockchain — Explaining it to a 5 Year Old (Sidharth Malhotra)
  • 9 min read: A Look at Token Sale Treasuries (Mosiac)

CryptoOracle

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Kevin Grimm

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CryptoOracle

Thought leaders in all things Crypto

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