Tron Coin Analysis – Bears Looking for a Claw Back – 09/01/18

G20 to Regulate Cryptocurrency Markets

Tron Coin Price Resistance

A bullish start to the year has seen Tron (“TRX”) rally 39.3% through the first 8 days of 2019, Tron seeing its largest daily gain of the New Year on Tuesday 8th, jumping by 10.68% to keep pace with the other cryptomarket trailblazer Litecoin.

Following a 15.31% rally last week, Monday through Sunday, a bullish start to this week has seen Tron strike an early intraweek high $0.02749, breaking through the week’s first major resistance level at $0.0255 to come up against the second major resistance level at $0.0275 before easing back to $0.02676 by the day’s end on Tuesday.

With Tron having been in the green for 5 consecutive days going into this morning, a 3rd January fall the only day in the red in the New Year, moves through the middle part of the week will be key to Tron’s direction going into the weekend.

In spite the bullish start to the year, the extended bearish trend, formed at an end of April swing hi $0.1004, remained intact following a late November swing lo $0.0111, with Tron continuing to fall well short of the 23.6% FIB Retracement Level of $0.0322.

At the time of writing, Tron was down 1.18% to $0.02644, with Tron falling to an early morning low $0.02612 before recovering to a morning high $0.02695, Tron struggling to break back through to $0.027 levels early in the day.

For the remainder of the week, holding onto $0.026 levels through the middle part of the week would support another move through the current week’s high $0.02749 to bring the week’s second major resistance level at $0.0275 and $0.030 levels into play before any pullback.

While we would expect Tron to come up short of the 23.6% FIB Retracement Level of $0.322 and third major resistance level at $0.0326, a break through the second major resistance level at $0.0275 ahead of the weekend could see $0.030 levels in play, though support would be needed from the broader market for a breakout going into the weekend.

Failure to hold onto $0.026 levels through the middle part of the week could see Tron pullback through the week’s first major resistance level at $0.0255, with a fall through to $0.022 levels bringing the week’s first major support level at $0.0204 into play before any recovery.

For the crypto bulls, momentum at the start of the year would need to be sustained for Tron to begin eyeing a bearish trend reversal, with a break out from the 23.6% FIB Retracement Level of $0.0322 to $0.040 levels needed to form a near-term bullish trend.

TRX/USD 09/01/19 Weekly Chart

Looking at the Technical Indicators

Major Support Level: $0.0204

Major Resistance Level: $0.0255

Fib 23.6% Retracement Level: $0.0322

Fib 38% Retracement Level: $0.0452

Fib 62% Retracement Level: $0.0663

Altcoins Weekly Analysis – ETH, IOT, NEO – 06/01/19

altcoins

Ethereum

Ethereum rallied by 14.77% in the week ending January 5th, following on from a previous week 15.55% bounce, to end the week at $154.21.

Another bullish week and an upbeat start to the year saw Ethereum rally from a relatively range-bound start to the week and a week low $128.3 to an end of week high $160.62 before easing back through the last day of the week

Through the week, Ethereum steered clear of the week’s major support level at $111, while breaking through the week’s major resistance level at $158.35 to hit $160 levels for the first time since the week of 19th November.

For the week ahead, a hold onto $150 levels through the early part of the week will be key to avoiding a sell-off, with Ethereum needing to move back through to last week’s high $160.62 to bring the week’s first major resistance level at $167 and $170 levels into play before any pullback.

Failure to move back through to $160 levels could see Ethereum hit reverse, with a pullback through $147 bringing sub-$140 levels and the week’s first major support level at $134.8 into play before any recovery, sub-$130 support levels unlikely to be in play in the event of a reversal.

At the time of writing, Ethereum was down 1.72% to $151.56.

ETH/USD 06/01/19 Weekly Chart

IOTA

IOTA gained 3.49% in the week ending 5th January, following on from a 2.22% rise the previous week, to end the week at $0.3739.

A bullish first half of the week saw IOTA rise from an early intraweek low $0.3511 to an intraweek high $0.4081 on Wednesday before hitting reverse, IOTA breaking through the week’s first major resistance level at $0.4002, whilst steering clear of the major support levels.

The reversal saw IOTA spend the last 3 days of the week in the red eating, into the week’s gains and reaffirming the extended bearish trend formed at early May’s swing hi $2.6977.

For the week ahead, a move back through to $0.38 levels would support a run at $0.40 levels and the week’s first major resistance level at $0.4043, with bearish sentiment across the broader market at the start of the week needing to reverse and IOTA needing to hold onto $0.36 levels to avoid a week in the red.

Failure to move back through to $0.38 levels by mid-week could see IOTA slide back through last week’s $0.3511 low to bring the week’s first major support level at $0.3178 into play before any recovery, sub-$0.30 support levels unlikely to be in play through the week, barring a crypto meltdown.

At the time of writing, IOT was down 1.5% to $0.3683.

IOT/USD 06/01/19 Weekly Chart

NEO

NEO slipped by 0.99% in the week ending 5th January to end the week at $8.00, a relatively flat week consolidating an 11.11% gain from the previous week.

The relatively range bound week saw NEO fall from an intraweek high $8.46 to an early in the week intraweek low $7.52 before finding support, NEO steering clear of the week’s major support and resistance levels

Recovering mid-week, NEO moved back through to $8.00 levels and a relatively range bound 2nd half of the week that saw NEO find plenty of support at sub-$8.00 levels to avoid heavier losses.

For the week ahead, a move back through to $8.00 levels would support a run at the week’s first major resistance level at $8.47, with a broad based cryptomarket rally needed to bring the second major resistance level at $8.93 into play before any pullback, $9.00 levels unlikely to be in play through the week.

Failure to move back through to $8.00 levels could see NEO pullback deeper into the red, with a fall through the week’s first major support level at $7.5267 bringing the second major support level at $7.053 into play before any recovery, sub-$7.00 levels unlikely to be in play through the week.

At the time of writing, NEO was down 0.42% to $7.79.

NEO/USD 06/01/19 Weekly Chart

Celebrating Bitcoin’s 10 Year Anniversary

Golden Bitcoin

Over the past 10 years, Bitcoin has proven to be resilient and ahead of its time. With legal uncertainty, outspoken skeptics, contentious hard forks, and high volatility, Bitcoin continues to prosper as the most liquid and trusted crypto asset in the market. Today there are thousands of cryptocurrencies, hundreds of competing exchanges, and billions of dollars invested in related projects.

Bitcoin introduced more than just digital cash to the world. It introduced entire new ecosystems which are peer-to-peer and Turing complete – simply look at Ethereum and various decentralized exchanges. It introduced peer-to-peer micro-tipping, which is possible on major platforms such as Twitter and Reddit and ultimately changed the way we interact with money on the web.

Some argue that Bitcoin represents the third progression of the internet. Initially, the internet was meant to act as an educational tool, then it was meant to share information through social media, and perhaps the next step is to share and transact real value, globally, in a peer-to-peer fashion.

Most importantly, it changed the way the people view how currency works and placed a greater emphasis on personal responsibility and privacy.

What Lies Ahead for Bitcoin

10 years is a significant milestone, but Bitcoin is still not where it needs to be. Moving forward the industry needs to focus more on merchant adoption, scalability, and simple user interfaces. After all of the Ethereum ICOs and Bitcoin Improvement Proposals, the industry is ready to see practical value rather than theoretical value. Over the next 10 years we hope to see the Lightning Network come to fruition, ETFs enter the market, and millions of merchants accept Bitcoin as payment.

The Lightning Network is an off-chain scaling solution which will allow Bitcoin transaction to occur instantaneously with negligible fees. There is lots of hype around it and various companies are working to create more volume on the network. As the Lightning Network grows, so should the number of merchants accepting Bitcoin since they should be correlated. Many businesses both large and small will set up payment channels with the Lightning Network directly. At that point, Bitcoin will be a truly global, usable, and peer-to-peer digital cash system.

Lastly, competition will continue to grow amongst blockchain and non-blockchain schools of thought. There are protocols such as DAG and Mimblewimble, which differ completely from blockchain and have major projects behind them such as IOTA. With entirely different schools of thought, the decentralized revolution will continue to grow, and ultimately, more competition fuels more innovation.

As for legal regulation, we believe this will come with time. Many countries acknowledge cryptocurrencies, tax them, and regulate exchanges. While regulation needs to be fine-tuned, it is not what it is holding Bitcoin back at this point.

While the past 10 years have been exciting, we are even more excited for what the next 10 has in store.

Binance Coin Analysis – Bears in Control – 02/01/18

G20 to Regulate Cryptocurrency Markets

Binance Coin Price Support

After a relatively flat week last week, with Binance Coin ending the week with just a 0.22% loss, Monday through Sunday, it’s been a mixed start to the week. An end of 2018 2.61% gain reversed at the start of the year, with Binance Coin falling by 1.13% on Tuesday to $6.2566, the start of the year sell-off bucking the trend from across the broader market.

Going into the middle of the week, Binance Coin has managed to steer clear of the week’s first major support level at $5.3833, with an early week low $5.8337 struck on Monday.

A Monday morning rally saw Binance Coin strike a start of a week high $6.6414, coming up short of the week’s first major resistance level at $6.8707 before hitting reverse through Tuesday, key through the early part of the week being a hold onto $6.00 levels by the day’s end.

In spite of a 30.75% Gain made in the week ending 24th December, the extended bearish trend, formed at mid-July’s swing hi $18.1894, remained intact following a 7th December new swing lo $4.1724, with Binance Coin continuing to fall short of the 23.6% FIB Retracement Level of $7.4804.

At the time of writing, Binance Coin was down 0.41% to $6.2307, with Binance Coin falling from a high 6.2816 to morning low $6.2112, a pullback from Tuesday’s late in the day high continuing into the early hours of the morning.

For the week ahead, holding onto $6.00 levels through the middle part of the week will be key to support a move back through the start of a week high $6.6414 to bring the week’s first major resistance level at $6.8707 and $7.00 levels into play, with Binance Coin needing to make a move back through to $6.64 levels ahead of the weekend to provide support through to the end of the week.

Failure to hold onto $6.00 levels through the middle part of the week could see Binance Coin cough up the current week’s gains, with a pullback through the start of the week low $5.8337 bringing the week’s first major support level at $5.3833 and last week’s low $5.3078 into play before any recovery, Binance Coin unlikely to fall to sub-$5.00 levels to test the week’s second major support level at $4.6019 in the event of an extended reversal.

BNB/USD 02/01/2018 Weekly Chart

Looking at the Technical Indicators

  • Major Support Level: $5.3833
  • Major Resistance Level: $6.8707
  • Fib 23.6% Retracement Level: $7.4804
  • Fib 38% Retracement Level: $9.5269
  • Fib 62% Retracement Level: $12.8349

Mt. Gox CEO Mark Karpeles States Innocence in Latest Trial

Mark Karpeles. Source: CCN

Mt. Gox was the world’s largest trading exchange until its 2014 collapse after revealing that it had lost 850,000 Bitcoin due to hackers compromising the exchange – worth $450 million at the time. While Karpeles claims this was theft, authorities believe there is more to the story.

With the trial beginning in June of this year, he was charged for embezzling approximately 340 million yen, or ~$3 million. He allegedly transferred “340 million yen belonging to customers from Mt. Gox account to his personal account between September and December 2013.” In response to this, NHK reported that his defense team said this transfer was for business reasons – not personal. Karpeles claims it was for a temporary loan.

He is also charged for manipulating data on the exchange’s interface to inflate balance numbers. Prosecutors are now seeking a 10-year sentence if found guilty, up from the original 5-year sentence he was originally facing. Located in Japan, he has been set free from bail on the premise that he does not leave Japan. According to CCN, a final verdict for the case is set to be made on March 15, 2019.

Regulators have been working to compensate users for lost funds. Meanwhile, Karpeles later found 200,000 Bitcoin in cold storage, which would have been more than enough to repay users considering the price increase of Bitcoin. We hope that all Mt. Gox users receive compensation for their lost funds, but we will have to see.

What Can We Learn from This?

After the fall of Mt. Gox, cryptocurrency investors have become increasingly cautious about where to invest their funds. Since Mt. Gox, other exchanges such as MintPal and Cryptsy have shut down for shady reasons. In fact, Cryptsy founder, Paul Vernon, fled to China to hide from authorities.

When choosing a trusted counterparty to hold your cryptocurrencies, it is important to research the team, the legal jurisdictions they are permitted to operate in, if they are insured, and if there is any history of hackings. For example, Coinbase mentions they are FDIC insured for up to $250,000, much like a regular bank. This makes US investors more comfortable using Coinbase and Coinbase Pro, over an unknown exchange, even if the unknown exchange has more options of altcoins. Additionally, many decentralized exchanges are being introduced to the market, but for now, we recommend avoiding these until they prove themselves to be technically and legally reliable.

Best practice is to never leave your crypto funds on an exchange. Unless you are an active trader who leaves positions open overnight, we recommend sending your cryptocurrencies back to your wallet at all times. This way you stay in control of your funds and get rid of all counterparty risk. After all – personal control of one’s own finances is a major driver behind the cryptocurrency revolution.

To dig one step deeper, we recommend using hardware wallets, such as the Ledger Nano S, even over desktop wallets. Hardware wallets are disconnected from the internet, so there is no way you can get compromised by hackers.

Altcoins Weekly Analysis – Cardano’s ADA, EOS and Stellar’s Lumen – 30/12/18

altcoins

Cardano’s ADA

Cardano’s ADA fell by 1.7% Sunday through Saturday, following the previous week’s 51.18% rally, to end the week at $0.04268.

A bullish start to the week saw Cardano’s ADA rally to a Monday intraweek high $0.051468, breaking through the week’s first major resistance level at $0.05120 before hitting reverse.

The reversal saw Cardano’s ADA fall through to a Friday intraweek low $0.036815, steering clear of the week’s first major support level at $0.0321 to bounce back to $0.04 levels on the day, with Cardano’s ADA unable to break back through to $0.05 levels by the end of the week

For the week ahead, a move back through to $0.044 levels in the early part of the week would support another run at $0.05 levels and the week’s first major resistance level at $0.05, with sentiment across the broader market needing to improve to support a run at the second major resistance level at $0.0583.

Failure to move through to $0.044 levels could set up a bearish week for Cardano’s ADA, with a pullback through last week’s $0.03682 low likely to bring the week’s first major support level at $0.0358 into play before any recovery, sub-$0.03 support levels unlikely to be tested, barring a material crypto market sell-off.

At the time of writing, Cardano’s ADA was up 0.3% to $0.04281.

ADA/USD 30/12/18 Weekly Chart

EOS

EOS slipped by just 0.2% in the week ending 29th December, following the previous week’s 40.35% gain, to end the week at $2.6946.

Tracking the broader market, EOS moved through to a intraweek high $3.2081, breaking through the week’s first major resistance level at $3.10 before easing back, EOS coming up short of the week’s second major resistance level at $3.49.

A mid-week pullback saw EOS fall to a week low $2.3093, EOS managing to hold above the week’s first major support level at $2.11 to move back through to $2.6 levels by the end of the week, EOS unable to recover the $3.00 handle.

For the week ahead, a move through to $2.75 levels would support another run at $3.00 levels to bring the week’s first major resistance level at $3.17 into play, with any broad based crypto rally supporting a run at the second major resistance level at $3.64 before any pullback, $4.00 levels unlikely to be hit in the week.

Failure to move through to $2.75 levels through the early part of the week could see EOS pullback through last week’s $2.3093 low to bring the first major support level at $2.27 into play before any recovery, sub-$2.00 support levels unlikely to be in play barring a crypto meltdown.

At the time of writing, EOS was down 1.39% at $2.6571.

EOS/USD 30/12/18 Weekly Chart

Stellar’s Lumen

Stellar’s Lumen fell by 4.6% in the week ending 29th December, partially reversing the previous week’s 28.6% rally, to end the week at $0.1202.

Tracking the broader market, Stellar’s Lumen rallied through to a Monday intraweek high $0.14762, breaking through the week’s first major resistance level at $0.1363 and 23.6% FIB Retracement Level of $0.1434 before hitting reverse, Stellar’s Lumen coming within range of the week’s second major resistance level at $0.1483.

The broad based cryptomarket reversal mid-week led to a pullback to an intraweek low $0.11074, Stellar’s Lumen steering clear of the week’s first major support level at $0.1045 before moving back through to $0.12 levels by the week’s end, the bearish sentiment at the end of the week pinning Stellar’s Lumen back from $0.13 levels.

For the week ahead, a move back through to $0.126 levels would support a return to $0.13 levels to bring the week’s first major resistance level at $0.1416 into play, with last week’s high $0.14762 likely to pin Stellar’s Lumen back from a break through to $0.15 levels in the week.

Failure to move through to $0.126 levels could see Stellar’s Lumen struggle through the week, with a fall through last week’s low $0.11074 bringing the week’s first major support level at $0.1048 into play before any recovery, heavier losses not expected in the week, barring materially negative news hitting the crypto wires.

XLM/USD 30/12/18 Weekly Chart

At the time of writing, Stellar’s Lumen was down 0.47% to $0.11964.

Ethereum Analysis – Now That’s a Rebound – 26/12/18

Ethereum

Ethereum Price Resistance

Following a particularly bullish week last week, which saw Ethereum rally by 54.8% to end the week at $129.61, it’s been a mixed start to the week, with Ethereum seeing a Monday 7.31% gain reverse on Tuesday, with Ethereum sliding by 7.34%.

Going into the middle of the week, Ethereum has managed to steer clear of a pullback to sub-$100 levels to call on support at the week’s major support level at $97.75, with a week low $122.15, a hold above $115 through the early part of the week has been key.

Monday’s upward momentum saw Ethereum strike an early week high $156.04, breaking through the week’s first major resistance level at $147.24 before pulling back to the week low $122.15 struck on Tuesday afternoon.

In spite of the more than 50% gains made last week and hold onto $130 levels mid-week, the extended bearish trend, formed at the end of April’s swing hi $829.97, remained intact following 14th December’s new swing lo $80.6, with Ethereum continuing to fall well short of the 23.6% FIB Retracement Level of $257.

At the time of writing, Ethereum was up 3.97% to $133.94, with support from the broader market driving Ethereum from a start of a day morning low $127.5 to a morning high $136.72 before easing back.

For the week ahead, a move back through to $140 levels would support another break through the week’s first major resistance level at $147.24 to bring $150 levels back into play, while sentiment across the broader market will need to continue to improve to support a run at $160 levels and the week’s second major resistance level at $164.86.

Failure to move back through to $140 levels could see Ethereum hit reverse later in the week, with a pullback through the current week’s low $122.15 to sub-$115 levels likely to bring sub-$100 levels and the week’s first major support level at $97.75 into play before any recovery.

Sentiment across the broader market would need to materially deteriorate for Ethereum to return to sub-$100 levels, however, with last week’s 54.8% rally providing some near-term support, Ethereum having avoided a Monday sell-off.

ETH/USD 26/12/18 Weekly Chart

Looking at the Technical Indicators

  • Major Support Level: $97.75
  • Major Resistance Level: $147.24
  • Fib 23.6% Retracement Level: $257
  • Fib 38% Retracement Level: $367
  • Fib 62% Retracement Level: $543

Altcoins Weekly Analysis – NEO, Stellar’s Lumen and Monero – 23/12/18

altcoins

NEO

NEO rallied by 27.62% Sunday through Saturday, reversing the previous week’s 6.07% fall with interest, to close out the week at $7.30.

A material shift in sentiment across the broader market supported a particularly bullish start to the week, with NEO breaking through the week’s first major resistance level at $6.71 on Monday before striking a week high $7.69 on Friday, NEO coming up against the week’s second major resistance level at $7.70 before easing back.

For the crypto bulls, 5 days in the green out of 7 saw NEO steer well clear of the week’s first major support level at $5.12, with NEO seeing only its 4th weekly gain of the 4th quarter.

For the week ahead, another bullish start to the week could deliver another weekly gain, with NEO needing to hold onto $7.00 levels through the early part of the week to support the latest shift in momentum.

A move through to last week’s $7.69 high would bring $8.00 levels and the first major resistance level at $8.09 into play, with positive sentiment across the broader market needed for NEO to take a run at the second major resistance level at $8.89 and $9.00 levels later in the week.

Failure to hold onto $7.00 levels through the early part of the week will likely lead to a partial reversal of last week’s gains, with NEO likely to call on support at the first major support level at $6.10 before any recovery, heavier losses not expected in the week.

At the time of writing, NEO was up 3.3% to $7.54.

NEO/USD 23/12/18 Weekly Chart

Monero’s XMR

Monero’s XMR jumped by 33.32% in the week Sunday through Saturday, reversing the previous week’s 13.19% slide, to end the week at $51.41.

Recovering from a bearish start to the week and a week low $38.35, Monero’s XMR rallied to a week high $55.45 on Friday before easing back, the bullish run through the week seeing Monero’s XMR break through the first major resistance level at $47.81 late in the week, while leaving the week’s first major support level at $33.18 untested.

For the week ahead, a hold onto $50 levels through the early part of the week would support a run through last week’s $55.45 high to bring the week’s first major resistance level at $58.5 into play before any pullback, resistance at $60 likely to pin Monero’s XMR back from any run at the second major resistance level at $65.5.

Failure to hold onto $50 levels through the early part of the week could see Monero’s XMR cough up some of last week’s gains, with a fall through to $48 levels signalling a possible pullback to $41 levels and the first major support level at $41.4 before any recovery, sub-$40 support levels unlikely to be tested in the week.

At the time of writing, Monero’s XMR was up 4.07% to $53.50.

XMR/USD 23/12/18 Weekly Chart

Stellar’s Lumen

Stellar’s Lumen rallied by 28.6% Sunday through Saturday, reversing a 19.25% slide in the previous week, to end the week at $0.12439.

A bullish start to the week saw Stellar’s Lumen break through to $0.11 levels, with positive sentiment across the broader market supporting a break through the first major resistance level at $0.1196 to a week high $0.12834 on Friday before easing back.

The moves through the week saw Stellar’s Lumen steer well clear of the first major resistance level at $0.0837, while Stellar’s Lumen also fell short of the 23.6% FIB of $0.1434 to leave the near-term bearish trend intact following 15th December’s swing lo $0.09353.

For the week ahead, a hold onto $0.12 levels through the early part of the week would support another positive week ahead, with a move through last week’s high $0.12834 bringing $0.13 levels and the first major resistance level at $0.1363 into play. Positive sentiment across the broader market through the week could see Stellar’s Lumen break through to $0.14 levels to bring the second major resistance level at $0.1483 into play before any pullback.

Failure to hold onto $0.12 levels through the early part of the week could see Stellar’s Lumen fall back through to $0.10 levels to call on support at the first major support level at $0.1045 before recovering, sub-$0.10 support levels unlikely to be in play through the week, barring a broad based cryptomarket sell-off.

At the time of writing, Stellar’s Lumen was up 2.9% to $0.1280.

XLM/USD 23/12/18 Weekly Chart

Pro-Bitcoin Chief of Staff Set to Enter the White House

Sources: New York Post

Donald Trump has chosen pro-Bitcoin Mick Mulvaney to act as the White House Chief of Staff come 2019.

According to a report from 2016, Mulvaney acknowledged that the Federal Reserve has “effectively devalued the dollar” and followed up by mentioning that Bitcoin is a currency “not manipulatable by any government.”

Introducing a cryptocurrency optimist to the White House is a positive signal for the future of the industry. With the United States being one of the largest consumer markets, it can have a global impact if the citizens of the US become more educated and invested in crypto.

Oddly enough, Mulvaney has a contentious past with Trump, especially during Trump’s presidential campaign. In a debate before the election, Mulvaney said:

“Yes, I am supporting Donald Trump but I’m doing so as enthusiastically as I can, given the fact that I think he’s a terrible human being.”

There are strong words, but hopefully, his new position as Chief of Staff will help to rebuild his relationship with Trump in a positive way and ultimately, push the blockchain industry forward towards mainstream use.

Aside from education, there are also clear tax issues which need to be revised to reach mainstream adoption. It would be ideal if Mulvaney can help in this initiative.

Tax Issues

Arguably, the way in which cryptocurrencies are taxed in the US can be significantly improved. Currently, cryptocurrencies are taxed similar to property, but not like real estate which has like-kind exchanges.

This means that each trade is a taxable event, triggering a realized gain or loss even if the trader did not sell back to USD. For example, if Bob purchases Litecoin with Bitcoin, then this is a taxable event. The IRS assumes that Bob sold Bitcoin to USD, then purchased Litecoin with USD, which is not the case. The US dollar was never touched in this Bitcoin to Litecoin transaction.

On the contrary, with real-estate, there are like-kind exchanges, also known as a 1031 exchange. This is a transaction type which allows for the sale of one asset and immediate purchase of another, without generating a tax liability. Many believe that the same like-kind exchange should be allowed for crypto to crypto transactions. It is assumed that many people cannot afford to pay their taxes since taxes must be paid with USD. To pay their taxes, investor and traders would need to sell their crypto to USD, which is another taxable event, just to pay taxes from previous cryptocurrency only trades. This is not only an accounting nightmare but also significantly hurts profits for cryptocurrency traders.

Another interesting perspective is to consider the fact that many people trade to accumulate cryptocurrency, not the US dollar. To be clear, many people trade explicitly to accumulate Bitcoin instead of USD.

Here’s where this gets interesting. Let’s say Bob is trading Bitcoin against other cryptocurrencies with the goal of accumulating Bitcoin, all while ignoring USD value. Meanwhile, Bitcoin’s USD value skyrockets from $1,000 to $20,000 much like it did from 2017-2018 and altcoins drop. As a result, Bob most likely has unrealized gains in USD, but unrealized losses in satoshi value. In other words, Bitcoin’s increase in USD has outperformed many of the altcoin dips.

To bring this full circle, let’s walk through a practical example. Bob purchases XYZ coin at a value of .01 satoshi (a rate of .01 Bitcoin). At the time of purchase, Bitcoin is priced at $1,000, which means XYZ would cost $10 (.01 * $1,000) if it can be purchased directly with fiat. A few months later, Bitcoin reaches $10,000 and XYZ’s price drops to .005 Satoshi, in terms of Bitcoin.

At this point, Bob is holding XYZ coin which is valued at $50, up 400% from the purchase price, but down 50% in Bitcoin value. If Bob wants to cut his Bitcoin losses and sell XYZ coin back to Bitcoin, then he will owe taxes because in terms of USD he has a realized gain, even though he is in losses from the satoshi perspective – which is what he is concerned with.

With these tax headaches lingering over cryptocurrency investors, it is our hope that the IRS and government officials will one day revise the tax code regarding cryptocurrency trade. Perhaps Mulvaney will be a catalyst for this change.

IOTA Analysis – It Looks Like a Bull Run – 19/12/18

IOTA Analysis

IOTA Price Resistance

IOTA rallied for a 2nd consecutive day this week, rising by 13.74% on Tuesday, off the back of a 15.35% bounce on Monday, to end the day at $0.2955.

The bullish start to the week came off the back of a positive weekend that has seen IOTA in the green for 4 consecutive days going into this morning, with IOTA up 31.1% for the current week, reversing the last week’s 5.82% loss with interest.

Through the early part of this week, supported by a broad-based cryptomarket rally, IOTA rallied from an early Monday morning low $0.2246 to a Tuesday high $0.2970.

The moves through the early part of the week saw IOTA break through the week’s major resistance levels to hold at the third major resistance level at $0.2952 by the day end on Tuesday.

In spite of the more than 30% gains Monday through Tuesday, the extended bearish trend, formed at early May’s swing hi $2.6977, remained intact following 7th December’s new swing lo $0.2051, with IOTA continuing to fall well short of the 23.6% FIB of $0.7934.

At the time of writing, IOTA was down 0.61% to $0.2937, with moves through the early hours of Wednesday seeing IOTA buck the trend from across the broader market to move into the red.

For the remainder of the week, a move back through the third major resistance level at $0.2952 would support a run back through to $0.30 levels last touched in the week of 26th November, though IOTA would need support from the broader market to hold onto $0.29 levels through the middle part of the week to break out from the third major resistance level at $0.2952.

Failure to move back through $0.295 levels could see IOTA cough up some of the week’s gains, with a pullback through the second major resistance level at $0.2601 likely to bring $0.24 levels into play before any recovery, the week’s major support level at $0.21 unlikely to be in play barring particularly negative news hitting the news wires.

For the crypto bulls, a pullback through the first major resistance level at $0.2426 would likely sound the alarm bells, with a slide to $0.22 levels later in the weekly signalling a likely full reversal and a likely loss for the week.

IOT/USD 19/12/18 Weekly Chart

Looking at the Technical Indicators

  • Major Support Level: $0.2075
  • Major Resistance Level: $0.2601
  • Fib 23.6% Retracement Level: $0.7934
  • Fib 38% Retracement Level: $1.1573
  • Fib 62% Retracement Level: $1.7455