August 2017 has been a great month for Bitcoin, but a mixed month for much of the Altcoin sector.
Bitcoin & Cryptocurrency Market Review For August-September 2017
Bitcoin started the month at around $2750. In the last week of August it peaked at over $4900 and by the end of the month BTC finished at $4725. That’s a rise of 58 percent for the 30-day period. No bad performance.
Altcoins generally saw falls during the first half of August, which were followed by partial recoveries for many coins throughout the second half of the month.
Taking the ICONOMI Blockchain Index (BLX) as a reference, the crypto sector in general saw overall rises of some 90 percent for August 2017.
The ICONOMI Blockchain Index measures the performance of a wide range of digital assets included in the ICONOMI BLX fund portfolio. There are currently 21 digital assets which make up the portfolio, including tokens such as Bitcoin, Ethereum, Dash, Monero, Golem, Steem, Siacoin, Waves, DigixDAO (DGD) and Basic Attention Token (BAT).
Altcoin Overview For August 2017
Let’s take a look at the performance of some of the top 10 altcoins by biggest market cap.
The price of Litecoin fell in the first half of August by around a third. It subsequently made a big recovery, with an 80% rise in value from its lowest price point in mid August. Currently LTC is trading at around 5% above the level of the start of August.
Ethereum has been trading largely sideways throughout August, currently at 0.07703197 BTC. 9th August it suddenly rose by around 13% to 0.0909 BTC, then dropped sharply over the next few days to around 0.067 BTC.
ETH is currently trading at around 0.0773 BTC. This is the 61.8% Fibonacci level based on the one month chart and measured from the 9th August peak.
Monero surprised everyone this month. XMR started August at 0.016 BTC. The first two weeks saw a slow but steady decline in the Monero price to 0.01117 BTC.
Then 18th August to 28th August saw three steps of price rises, up to a peak of 0.0348 BTC by 28th August. That’s a rise of over 200% in less than 2 weeks.
XMR is currently down a little from the peak at 0.0277, heading down in the direction of the 61% Fibonacci point.
Ripple has been on a roller-coaster this month. Starting out at 0.000059 BTC, and falling throughout the first half of the month to a low of around 0.000036, before then doubling in value to around 0.0000707 by August 23rd.
Over the next few days XRP then fell to the 38% Fibonnaci level at around 0.00005 BTC. Since then XRP has been sideways trading between 0.000045 and 0.000055 BTC.
Dash started the month at 0.0675 BTC, falling to 0.045 by mid-August. It then rose over the following two weeks to a peak at 0.09 BTC.
Dash is currently down to 0.076 BTC which is just above the 61.8% Fibonacci level.
Hedge Fund Performance For August 2017
Fund value increased in Euro terms by 68% during August.
Total net BTC value at close of month was around 12% lower than at month begin.
This calculation however takes into account capital deductions of around 4.5% of fund value during August. Thus the gross BTC fund value percentage fall would actually be around half of that figure, ie around -6% for the month.
Currently around 20% of the fund is invested directly in either BTC or USDT (US Tether Dollars). The aim is to gradually increase this proportion to around 50% of the portfolio. This means the fund aims to be invested 50:50 in Bitcoin/USDT and Altcoins respectively.
The fund has increased its portfolio holding in the ICONOMI BLX fund. ICONOMI BLX has been performing exceptionally well, all the more so considering the generally depressed Altcoin market of late.
Currently around 5% of the portfolio is invested in the ICONOMI BLX fund. The aim is to increase this holding further during September.
At present the fund holds positions in around 35 different cryptocurrencies. The aim is to get this down to around 20. The build up in the longer term position in ICONOMI will help achieve this target.
Amateur investors I know have reported varying trading results for August. One has seen portfolio value shrink substantially largely owing to loss-making trades in the altcoin sector. Another has enjoyed a hefty value increase simply through mainly holding Bitcoin and a much smaller proportion in Altcoins.
Taking BTC and ICONOMI BLX values as indicative of current market movements, August has been an excellent month. We’ve seen a rise in Bitcoin price of well over 50%, and an increase for ICONOMI of 90%.
If you’re losing money in these circumstances, then you must be doing something wrong. My view is that there’s a temptation to try to be too clever with our trading strategies which can be to our detriment. Sometimes it’s better to keep it simple.
Bitcoin & Altcoin Market Outlook For September 2017
During the first few days of September Bitcoin has fallen from its latest all time high. We’re currently down by over 12% on the end of August peak, possibly with more falls to come.
In my view there are two main reasons for this fallback.
Firstly, profit-taking following the latest all time high at around $4900.
Secondly, the Chinese government has just announced changes to the regulatory framework for ICOs (Initial Coin Offerings) and this is unsettling the markets. In my view this is largely down to overreaction, misunderstanding of the details, and short-term panic selling.
This reaction in the North American, European, and Asian markets I feel will most probably have worked itself out over the coming few days.
BTC should then be ready to test the all time high level of $5000 and beyond once again.
Tracked on the 30-day chart to date, BTC is currently standing at just above the 68% Fibonnaci level at around $4200. This is the level we reached during the third week of August ($4100-$4200).
Current pressure is in the direction of the 50% Fibonacci level, which is $3925 for the 30-day chart.
But if it can hold up above the psychologically significant $4000-$4100 level, then we will hopefully be able to avoid a short term crash (ie falling below $3900). Shorting trade activity could help bring about a fall to $3900 and below, but otherwise I can’t see any fundamental reasons for such a fall in BTC.
Another point is the current uncertainty over the North Korean issue. Stock markets and Forex markets are experiencing downturns as a result. Normally this would be expected to lead to increased take-up of positions in Bitcoin.
But with the current downward pressure from the two issues mentioned above, this does not make for an attractive alternative right now.
However, provided BTC can avoid a dip below below the $3900 level, and can register growth back towards $4500 and beyond over the coming week or so, then this disadvantage will have disappeared and the North Korean uncertainties may serve to provide a further source of strong upward pressure for Bitcoin to easily reach $5000 and beyond during September.
My advice would be: if you’re in long positions with BTC, then try and hold over the next week or two if you can. My estimation is that it will most likely turn out to be worth it later in September.
That’s all for now. Wishing you Good Trading for September!