Bitcoin & Cryptocurrency Market Review For October – November 2017

Bitcoin good, altcoins bad.

Bitcoin price sees big rises, while altcoins continue their fall to ever lower levels.

30dbtcusd.1.11.17.lightBitcoin & Cryptocurrency Market Review For October – November 2017

Bitcoin has risen by some 47% in price throughout October to 1 November 2017

At the beginning of November, BTC price stood at 6517 USD.

The last week of October alone saw a rise of 19% in price.

Over the last six months, Bitcoin has increased in value almost three times over, by some 290%.

As for altcoins, their value has been decimated this month.

ICONOMI BLX Index currently stands at $1.4576 as of 1 November 2017.

The Blockchain Index (BLX) is a passively managed DAA investing in established blockchain-based projects. The BLX ICONOMI fund includes holdings in currencies such as BTC, ETH, DASH, XMR and LSK.

Fund Performance For October 2017

Bitcoin fund value fell by over a third.

Measured in Euro value the fund fared a little better, but was still down, before capital withdrawals by around 15%.

The fund has been heavily invested in altcoins to the detriment of Bitcoin and the consequence of this has been negative for the fund.

6mbtcusd.1.11.17.lightStrategy For The Future

The altcoin boom we saw in the first quarter of 2017 has not since been repeated. Largely this is down to Bitcoin soaring ahead for much of that time.

The strategy is now to substantially reduce altcoin holdings as a proportion of the portfolio. We will be looking to maintain a ratio of around one third altcoins and two thirds Bitcoin.

I’ve been reducing the number of altcoin currencies held, with several currencies being removed. We currently have around 27 currencies in the portfolio – precise number fluctuates on a daily basis from trading.  This is still too many and the aim is to reduce this by another half if possible to around 12-15.

Charlie Lee of Litecoin said something interesting on the subject of cryptocurrencies.

In his view, most altcoins will eventually become worthless.

I too tend to take a skeptical view of altcoins. This is a new industry, and as such is subject to a lot of hype on the one hand and hope on the other. There’s a gold-digger mentality at work.

Some coins will indeed turn out to be goldmines. The problem is determining which ones.

Most if not all of the gimmick coins, and those coins which do not offer anything substantial in terms of service or solid utility value for the user, are likely to see their value plummet over the coming years if not sooner.

We will see short term pumps and dumps, sudden peaks and troughs which will excite the short term traders. We frequently see these with many of these coins. This can be profitable, but such coins do not represent a solid long term portfolio investment. Their use is solely short-term speculative.

My feeling is that as the sector matures many of these kind of coins will eventually die out.

My long term hold strategy is also changing as regards altcoins.

I regard managed portfolio investment funds such as ICONOMI or TaaS as acceptable long-term altcoin positions.

As for other long term altcoins, I am placing priority on the top 20 by market cap. Some of these coins are also tradeable as USD pairs. This means there is no need to hold Bitcoin to trade in these coins, making it easier to enter and exit and less directly dependent on Bitcoin’s fortunes. So the priority will be on those coins which are directly USD convertible and not just BTC convertible.

For altcoins outside the top 20 market cap, I will only consider those who have a solid value proposition in terms of usage (I’m not talking here about market price value).

When it comes to short term trading, the aim is to maintain only a small number of short term positions, and to consider trading short term in practically any coin, no matter how trashy, provided the technical chart indicators are strongly positive.

What’s The Market Outlook For November 2017?

First of all, the Bitcoin Forks.

We’ve just had the second new hard forked coin from Bitcoin – Bitcoin Gold, following on from the previous month’s Bitcoin Cash.

We now have a further fork coming up in November.

The volatility that these forks create can be welcome to us as traders, but my view is that these Bitcoin forks are more damaging to the Bitcoin brand and credibility than helpful. Forks can play a role in the technological eco-system of Bitcoin and for that matter some altcoins as well.

But continual forks cannot be beneficial for the market and the sector. The result is a dilution of available market purchasing power and no one ultimately benefits. They also present potential for fraud, with increasing scamming attempts. Security issues are also sometimes overlooked by the promoters.

My advice would be: trade on the turbulence caused by these forks, but don’t go restructuring your portfolio just for the sake of picking up new fork coins.

And bear in mind this saying (from me):

‘The number of Bitcoins is limited – but the number of Bitcoin forks is not’.

After the Bitcoin Gold fork, many expected a fall back in Bitcoin price.

We did indeed see a fall back, but its been very modest, from around 6000 to 5500. Contrary to what many were thinking and expecting, including myself, Bitcoin has instead since forged ahead to the level of 6500.

The growth these last few weeks has been jerky. We’ve had narrow range trading for the most part, accompanied by sudden instant shifts upwards, like an elevator moving from one floor to the next all of a sudden. The narrow range trading then continues as before up on the newly reached floor. So far, as of 1 November this has been the scenario.

After each rise there’s been a slow steady drip downwards, but only slight.

This suggests to me the market is unsure where its going to go next. Many participants are uncertain. Will we see the fall-back predicted and awaited by many? Or will BTC continue rising toward 7000 USD?

In effect right now we are already on our way to 7000, so perhaps this analysis is in effect irrelevant.

But I would advise caution right now. Bitcoin has seen tremendous growth throughout October. Can this growth continue through November without a fallback occurring along the way?

I’d say its more likely to be unlikely. I’d say still expect a fall back. But exactly when it will come, is anyone’s guess.

One commentator I follow on Youtube, CryptoInvestor, also expressed this point of view. He says he finds it unnerving the way Bitcoin has behaved this last week or two. Bitcoin he says does not follow normal market logic as found on the stock market. It’s sentiment driven. I’d agree with this.

Where sentiment rules a market, it pays to be ultra cautious.

As for alts…

They continue the pattern: Bitcoin rises – alts fall.

Alts have largely reached rock bottom. Can anything else be squeezed out in the downward direction? All things are possible in this sector.

It’s a buyers market right now for alts. But altcoins are also a dangerous market. Be careful.

That’s all I’ll say for now. Good trading!

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