“Wall Street Is Coming” was the mantra for crypto traders last year.
The flow of retail money pushed Bitcoin’s price to $20,000 in late 2017, but even conservative experts expected Bitcoin to skyrocket once institutional money would have entered the game. What followed was not institutional money but a long year of a hard and dark Crypto Winter.
Are you still in the game?
Congratulations! What is coming has the potential to be much bigger than what we have seen so far in the crypto space. Here at Coinrule we can’t wait to demonstrate it to you!
Institutional Money Is On The Way
The prediction about institutional money shifting to crypto was not wrong. What happened was that “smart money” was moving into the market in other, unexpected ways. According to Reuters data, in 2018, Venture Capitals poured more than $5 Billion into blockchain companies. That failed to push the price of cryptocurrencies directly, instead, it paved the way for the development of a well-funded ecosystem seeking to bring projects to reality and to keep up with product roadmaps.
After all, companies from the traditional financial system don’t yet feel comfortable investing directly in digital assets. Still, early-stage custodian services, relatively illiquid exchanges and often unclear regulatory policies made the old-style equity investment the fastest and most convenient way to gain the first exposure to this new asset class.
A Fast Developing Ecosystem
From these seed funds, the first plants are starting to grow strongly. Some are just beginning to bear fruits, and some others are already proving their potential. The crypto spring has started
Under the spotlights came the new partnerships between Flexa and Gemini that will provide a further push towards the mainstream adoption of crypto-powered payment systems.
Chainlink announced the launch of their Mainnet on May 30th – a potential game-changer for the Ethereum network, as it will represent the first reliable Oracle for all the dApp developed on top of its protocol. Bakkt confirmed that testing activities for the futures contracts will start in July. CFTC-regulated trading products will significantly increase the legitimacy of cryptocurrencies as an investable asset class. In such times of uncertainty and stablecoin FUDs, Paxos bravely announced that their tokens will be fully redeemable with FIAT on their new platform.
Blockchain companies are doing their best to prove their use cases and the disruptive change they bring to the financial world as we know it now. Delivering on their roadmap is hard, but many talented teams worldwide are doing a fantastic job. And we know, even Rome wasn’t built in a day!
On one hand, in order to foresee the new decentralized dream becoming part of our daily life, a long-term view is needed. On the other hand, it is easy to fall in the trap of hoping for short term gains, a rather quick one-way ticket to the moon. That approach has been a catchy way to burn your funds. As Coinrule’s CEO Gabriele Musella says:
“We have seen far too many beginner traders jumping in to chase pump and dumps. With a bit of fundamental analysis, data and a smart trading strategy, your potential to maximize your gains as a beginner trader is significantly higher”.
Something Has Radically Changed
For all those still researching great projects, analyzing meaningful data, and trying to place clever trading orders, kudos to you! One day you will be able to proudly say that you survived the toughest bear market since the beginning of the Crypto-Era. What an exciting time!
“[…] at Coinrule, we had the feeling that something was brewing. Even a few months after the dark market dip, in several circles you could see momentum was building again” Gabriele says.
One of the leading indicators for reading the market mood is the reaction to news that arrives every day. In 2018, most of the reports were negative for the crypto space (or were simply interpreted as “very bad news” without a strong rationale). Every day, traders seemed to find a good reason for a new sell-off. On the opposite, since the start of 2019, more positive news about the development of a broad ecosystem keeps floating through the media. That contributes significantly to feeding optimism among traders and investors.
The Binance Hacking represents a clear example of that. In other times, such a negative event happening to the biggest crypto exchange would have triggered an extreme selling panic. But the Bitcoin price instead barely reacted and after a few hours, the price started going up again.
From April, what was just a feeling slowly started shaping into something more concrete and real. Bitcoin broke out from a long period of accumulation, leading to a sudden price surge of 20% up in a matter of minutes. Don’t stand in the way of Bitcoin pumping! The rally was likely fueled by a massive short covering from those who had expected prices to drop. Many traders had the feeling that the $4,200 price level would have been hard to breach. But when the pressure from the buy-side increased unexpectedly, the market was overwhelmed by buy orders, and short sellers had to rush to close their positions to prevent further losses. That created an extreme event where literally everyone was buying with no one on the other side of the trade to sell. These are classic ingredients for the recipe of a powerful pump. Watch out for such setups in the next weeks!
Also, in the following weeks, with the Bitcoin price continuing on a parabolic trajectory, it seems like very few participants are still willing to sell, even if these exceptional price increases should occasionally lead to temporary take-profit sell-offs (which in turn are good market entry opportunities!).
And this once again confirms our thesis and is just another indicator that we are officially out of the bear market.
After all, many altcoins are not technically in a downtrend any longer. Let’s look at Ravencoin, Binance Coin, Litecoin, Basic Attention Token and Chainlink: they all posted impressive performances in the first three months of the year. They say that a swallow does not make spring, but here, Bitcoin, the king of all swallows has been flying high for one month already!
Oleg Giberstein, COO of Coinrule, has been speaking with two 4bn USD+ Hedge Funds that have both started to trade cryptocurrency over 2018 but not made it public so far. According to Oleg:
“If Bitcoin and cryptos continue to overperform the legacy financial markets in times of crisis, as it has happened over the past few weeks, it will be a massive signal that there is an asset class that can bring major opportunities even to traditional non-crypto investors. This will really open the floodgates for a lot of actors to come in.”
New money is indeed coming into the market, and at first, just like in the last rally, it is flooding into Bitcoin, the base currency in the crypto space, and we believe that the next stage will be a new robust and sustainable bull cycle that will also include other coins. That happened exactly this way in the months between September and December 2017, maybe history doesn’t always repeat itself, but very often it rhymes.
Coinrule, More Value And Trading Tools for Any Trader
At Coinrule, we want to provide the best tools for traders to manage future volatility, there will be plenty of opportunities in the market, but there are always risks looming. Price drops will come, and they could also be quite severe. Even the strongest bull market doesn’t come without shakeouts, they happen quite often, and they add a high level of stress even to the most seasoned traders.
Offering to our users the possibility to develop customized automated trading strategies easily, we want to give them the chance to exclude feelings from their investment decisions.
The safety of our users and limiting their risk is our main priority. We invest many resources in trading tutorials, and during the one-to-one free sessions that we provide to our most active users, we stress the importance of putting in place risk management tools that can prevent losses that could be hard to recover.
A stop-loss strategy that can save you from larger losses is something valuable and should always be in place. On the same trade, 5% loss, compared to a 20% loss, can be seen as a 15% gain, which means more allocation available for the next trade! With Coinrule, you can set one single portfolio protection rule that will cover all your positions – a sure way to stay protected.
Another breakthrough feature that Coinrule offers is the “stop & re-invest”. From our extensive user research, we found out how, in reality, many traders don’t use the stop loss, or they remove it when the price is approaching the trigger-price. Why? They hope somehow the price will bounce soon, and that can lead to a dangerous slip that can impact the capital allocation significantly in the long term.
Our solution? When planning the trading strategy, the trader defines the price level at which he wants to close the first trade and automatically preset what asset to buy with the proceeds of the trade closed with a loss. No hard feelings, just close a losing trade and at the same time open a new winning one. The market offers every day plenty of opportunities. There is no interest in wasting time with losing trades.
Brace Yourself For The Next Big Bull Wave
Preserving the initial capital is beyond doubt what makes the real difference between less and more advanced traders. And especially in times like these, all traders should have their trading plans ready and as much funds as possible available to ride the next big wave.
This time it will be huge! Just think how much bigger the 2017 rally was compared to 2013. Now imagine how much bigger the next one could be.
What makes us so confident about that? Every bull cycle has a specific catalyst. 2017 was the year of ICOs and of the growing awareness about the potential of smart contracts to ignite a revolution in virtually any sort of business. For the first time, it was not about Crypto–currencies, but a broader concept of Blockchain technology was developing.
The key here is the growing awareness about the potential of this new technology and its developing ecosystems. At first, cryptocurrencies were a phenomenon only for developers and geeks, but since then they caught the attention of ever wider groups of adopters. As of now, it’s safe to assume that the brightest minds are moving into the crypto space. The mix of institutional money flowing in and human capital that is shifting into Blockchain companies is building up the perfect conditions for a new market boom!
What Can Go Wrong?
We strongly believe that Blockchain technology will disrupt many aspects of our daily life in the future, but at the same time, the road will be paved with ups and downs. Trading for sure is difficult, and any trader should approach it with discipline, attitude, and commitment. Nothing can go up vertically, so any dip can be at the same time an opportunity and a threat, everything depends on the trading plan. We provide the tools to any trader to develop the best automated trading strategy that can fit his needs.
Trading is a tough discipline per-se, but trading cryptocurrencies can be real hell, especially for non-advanced traders. A 24/7 market, many trading venues, often illiquid assets, and the risk of falling into the traps of FUDs or FOMOs makes crypto trading an activity that can become extremely stressful. A trading bot has the potential of improving the trading results of both more and less advanced traders, reducing at the same time the tensions involved.
The changed mood of the market not only revived the price of Bitcoin (and of the broad altcoin market in general), new optimistic predictions are being made of where the Bitcoin price will be going in the coming months and years.
One of the most reliable analysts in the crypto space, Tom Lee from Fundstrat, sees Bitcoin at $25,000 by the end of 2019 and at $91,000 by 2020. Many analysts see the price of Bitcoin reach above the previous all-time high somewhere between $30,000 and $100,000, for example according to Max Keiser from Heisenberg Capital, David Drake from LDJ Capital, and Bobby Lee from the Bitcoin Foundation.
But some others push the predictions even further, and their opinions should count as they have been prominent participants in this business for a long time. Tim Draper sees Bitcoin at $250,000 by 2022, Mark Yusko expects it at $400,000 in the long term, while according to the Winklevoss Twins, the crypto market will have a value 10 to 20 times higher in ten years.
But the boldest of all predictions is still the one from John Mcafee, $1 million by the end of 2020. He must be quite confident about the future of crypto as he has famously bet much more than just money on his prediction.
If Bitcoin reaches his target, maybe he won’t be the one to profit the most, but at least he won’t be the one to lose the most either. Whatever the target will be, enjoy the ride!
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