Saturday, November 30, 2013

The Altcoin craze: What coin should I hold on to?

Altcoins have been the rave over the last 5 days since Litecoin's prices surged past $10. Now that Litecoin has found a resistance at $50, and support at $25, what's next?

As predicted, Litecoin was a bubble in the making, and made a mini crash which began on the 28th November from $50/LTC to about $25.56 4 hours ago. Prices look like that have begun to climb back up again, and I won't be surprised to see LTC at $50 again within a week. Unfortunately, even though I predicted the impending "mini bubble" of LTC, I didn't manage to trade them out into BTC at the peak. In fact, I actually bought some more Litecoins at 0.05 (LTC/BTC). Not the best move, but I'm still happy with my Litecoins.

So if you haven't bought into Litecoins, or have sold your LTC at the peak, it's a REALLY good time to buy in right now; especially if you're thinking of doubling your money's worth in a week or two. If you're interested to get started, but need some help, email me at or leave a comment below and we'll see how we can work something out! =)

More interestingly, Litecoin's price surge was tailed by all other major alternative crypocurrencies during this rise, especially those available for trading on Btc-e. In my post back in October when I first found out about Altcoins, I featured a snipshot of the top 6 Cryptocurrencies on, and it looked something like this:

And then 1 month later, on the 28th of October, it looked something like this:

Over the course of 1 month, Litecoin market capitalization increased over 2000%. The rest of the top alt coins also saw large increases in market cap with Peercoin (PPC) gaining 1100%, with Namecoin (NMC) and Primecoin (XPM) following behind with a 1700% and 850% gain respectively. During the month of November, almost all major altcoins outperformed Bitcoin's 600% increase in market capitalization during the same period.

And just TWO DAYS later, at the time of posting, it looked like this:

For your viewing pleasure, I have set them up in a nice, borderless table for a comparison of market cap gains over the last 2 days. I'm sorry to you NovaCoin fans for leaving NVC out of the equation, but I read about some pre-mining & other issues with the development team somewhere, so I'm staying away.

% Gain 14% 0% 131% 30% 47% 148%

With a quick look at, we can see the two greatest gainers were PPC and FTC, which have nothing in common in terms of the algorithm. Alternative Coin prices are purely based on speculation right now, as can be seen by the huge rally quickly following behind Litecoin's rise to fame.

If you're planning to dabble in some alt coins besides Litecoin, and have a high risk propensity, this may be the best time to risk your money for the possibility of massive gains. By massive, I'm talking about a minimum of a 5 fold increase in USD value (or even Bitcoin value if you're lucky enough).

I'm not really a person for predictions, but this situation calls for one. As mentioned, I (personally) believe that alt coin prices are following behind LTC prices, ever so slightly. You can get to see the latest price movements with my favourite Bitcoin chart to date: On Bitcoinwisdom, use the 1m chart to see the prices as they trade live, and you can even choose between different markets from the bar at the top making it much easier to compare prices across different exchanges. If you're new to chart reading, please check out their help page @ If you need a better explaination, comment below and I'll be more than happy to help.

Use Bitcoinwisdom's chart to see when Litecoin prices are going up (which I think is happening now, with a resistance of $50 and a support at $25), and invest in your trusted alt coins when you think it is happening! If I had to name one, I'd go with NMC! If you prefer something with a higher risk, try FTC & XPM.

Trade with your heart, not with your mind. Trade safe, and HUAT AH!

I have my next post in mind about panic selling/buying and how you can avoid it, and a little bit about bull/bear traps. But before I go into that, let me just end off with a piece of advice for beginners. DON'T trade (unless your taking a profit) during a price spike! More likely that not, a huge up/downswing (as seen on one candle in BTC-e's charts) will end up close to it's original position, before moving off in the same direction. To get a better understanding, look at the example below:

On the left, we have 2 candles pointed out by the blue arrows which illustrates my point. First arrow shows a candle with a huge dip downwards, and price retracts to close to the top within a minute or so. After which, prices will start to bleed downwards. This is the same for the 2nd blue arrow, but in the opposite direction (upward trending).

On another note, I just wanted to also point out the candle pointed out by the red arrow. Such a significant (in size) and opposite trending candle, following a "peak" as shown by the previous 3 arrows, usually means that a downtrend is coming. Or at least that's what I've learnt from my 2 month experience analyzing Cryptocurrency charts.

I also found a very interesting theory that is applicable to the crytpo markets. If you are interested in trading your Bitcoins, be sure to read up on Elliott Wave Theory.

Thursday, November 28, 2013

Alternate Cryptocurrency Prices Surge - Is a Litecoin Crash coming?

BTC surpassed its all time high, reaching a milestone US$1000 per Bitcoin on Mtgox earlier today. As BTC's prices slowly inch up after the mini-crash after the Senate Hearing, we have seen a large spillover of funds pouring into alternate cryptocurrencies. Over the last 2 days alone, the prices of alt coins such as PeerCoin (PPC), NameCoin (NMC), PrimeCoin (XPM), and FeatherCoin (FTC), have at least doubled in value, some  up to 500%.

Most notable is Litecoin, dubbed as silver to Bitcoin's gold, which price recently surged and increased almost 10 fold in the last 10 days since it passed the $4 mark. Since the last 60 hours, Litecoin has more than tripled from $10 per LTC to its current price of US$35/LTC! Not exactly sure what's behind this surge in prices, especially in LTC, but maybe Max Keiser's Interim target of $50 for LTC played a part.


But this insane surge has got me thinking, is a huge crash in the making?

If we look back at the April crash, and compare it with the current litecoin chart, we can see some similarities. See below for a comparison.

From my understanding of the markets thus far, I am assuming that every big spike in price has to be followed by a big correction. The higher you jump, the harder you fall. And let's say that Litecoin prices are kind of mimicking Bitcoin prices (as it was back in April 2013), albiet at a much faster pace, we can assume that this crash is coming. And it's coming very soon.

But when will that happen? Where will the peak be? Will LTC prices peak at $50, $80, $100, or $200 before it takes an 80% nosedive? I can't tell for certain what price LTC will peak at before crashing, but what is your guess?

If you're holding Litecoins or thinking of buying them, read these 2 reddit discussions before doing so!


Well my plan for the next few days is to convert some of my LTC back into BTC. I think BTC prices will hold rather stable even when LTC flash crashes, and thus would rather sell my LTC into BTC than hold onto useless FIAT dollars. I currently have about 80% of my funds in LTC, and have placed sell positions for half of my Litecoins, ranging from 0.055 LTC/BTC all the way up to 0.15. And will be looking to re-enter into litecoin at the bottom of the crash, if the crash comes.

Crash or no crash; all the best for your trading everyone!

So, what's your move going to be in the case of a Litecoin crash?

Monday, November 18, 2013

Homeland Security Hearing 18th November 2013 will be Bad News for Bitcoin

On the 18th of November at 8PM GMT+0, Homeland Security will hold the first of two hearings about Bitcoin and the future of cryptocurrency after Silkroad. I believe these hearings will have a negative impact on Bitcoin prices, and here's why.

The FBI probed for investigations into Bitcoin, following the statement: “Indeed, it is not clear at this point whether virtual currencies will become a long-term, prevalent fixture of the electronic commerce world. But given the increased demand from consumers and investors, as well as demonstrated concerns regarding money laundering, regulators would be remiss if they turned a blind eye to virtual currencies,” Mr. Lawsky said in Thursday’s announcement.

There are two panels for the meetings, on one side being Bitcoin representatives, and the other consisting of members from the United States government. They are:
  • Jennifer Shasky Calvery, director of the Financial Crimes Enforcement Network – US Department of the Treasury
  • Mythili Raman, acting assistant attorney general – Criminal Division US Department of Justice
  • Edward W. Lowery III, special agent in charge at the Criminal Investigative Division of the US Secret Service – US Department of Homeland Security

A little background search of these representatives gave these results:

Jennifer Shasky Calvery, director of the Financial Crimes Enforcement Network – US Department of the Treasury
“Digital currencies are just a financial service and those who deal in them are [financial institutions],” Jennifer Shasky Calvery, the director of the Financial Crimes Enforcement Network
FinCEN is dedicated to learning more about digital currency systems, along with other emerging mechanisms, to protect those systems from abuse and to aid law enforcement in ensuring that they are getting the leads and information they need to prosecute the criminal actors. 
Mythili Raman, acting assistant attorney general – Criminal Division US Department of Justice
announcing that he will hold hearings that could help determine whether virtual currency companies will need to apply for a special “bitlicense” to operate in the state.

Acting Assistant Attorney General Mythili Raman said: “As charged, Liberty Reserve operated, on an enormous scale, a digital currency system designed to provide cyber and other criminals with a way to launder their profits without leaving a trace. The company’s very purpose was to launder its users’ criminal proceeds through the U.S. and global financial system.

Edward W. Lowery III, special agent in charge at the Criminal Investigative Division of the US Secret Service – US Department of Homeland Security
Ed Lowery, special agent in charge of the U.S. Secret Service's criminal investigative division, said the agency is working "aggressively with our international partners" to pursue cyber crime and the companies that permit the misuse of digital currencies. He declined to comment specifically on Bitcoin.

The toughest comments came from the Department of Homeland Security. “The anonymity of cyberspace affords a unique opportunity for criminal organizations to launder huge sums of money undetected,” wrote DHS Acting Assistant Secretary for Legislative Affairs Brian de Vallance. “With the advent of virtual currencies and the ease with which financial transactions can be exploited by criminal organizations, DHS has recognized the need for an aggressive posture toward this evolving trend.”


Keiser Report: Mud Pie of State Benefits (E523)

Jeff Berwick on Fox Business: Is Bitcoin the currency of the future?

Could be a good time to sell tomorrow before the talks start. We could see prices back ab sub-300 or even sub-200 levels. Let's wait and see.

Friday, November 15, 2013

Is the Bitcoin train ever turning back? $1000 by year end?

Could it be that the Bitcoin train is never ever turning back from here? Since BTC prices soared past the previous April high of $266, it's been surging up to a high of $440 and building up a resistance level, hitting this peak for the second time in 12 hours. On the 5 day chart, we can form a support at $370. I think this resistance and support levels are highly significant now, and my guess is that the BTC prices will be hovering between $370-$440 (MtGox price) for a good 4 days, at least until the 18th of November. If it breaks above this resistance, I feel like the train is never turning back. Will we ever see bitcoin prices at $250, or even $300, ever again?

Some of you may already know about the Homeland Security hearing on the 18th of November. Why is this important? Well, it really depends on the outcome. But judging from how the US is treating Bitcoins now, siezing MtGox bank accounts, silkroad etc., I'm skeptical about any good news coming out of this hearing. If it's bad news, we could easily see prices slide to $266, or even way below $200. Otherwise, if news is neutral or positive, we could see Bitcoin prices soar to $800, even $1000, by the end of the year. In the past month, some big names in Bitcoin and businesses have valued Bitcoin at $100k, even $1 million. Do you think that's possible? Tell me in the comments below.

Bitcoin's rising demand can also be attributred to more businesses offering BTC as a payment option, since Baidu first did so on 22st October 2013. Some notable brands include Shopify, Subway, with eBay considering it. While in China, you can buy real estate with BTC, and beer for BTC in Singapore!

On the other hand, there have also been a significant increase in the number of hackings. Several exchanges have fallen just this month alone, along with some wallet services such as Could the vulnerability of such services compromise the price of Bitcoins significantly?

How would you value a Bitcoin? Author Squeaky Wheel categorizes 3 ways in which we can measure the valuation of bitcoins: 
1) compare to gold (GLD), 
2) compare to a company providing similar service such as Western Union (WU) or Paypal (EBAY), or 
3) calculate values needed to support the transactional value.

I personally agree with the third method, because I believe that the value of Bitcoins are purely dependent on demand, which is in turn increased as more services are built to make it easier transact in cryptocurrncies. Of course, political and regulatory factors will also have a large effect on Bitcoin prices. So lets see what happens on the 18th of November 2013. 

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Monday, November 4, 2013

Max Keiser Report on Bitcoin Revolution

Max Keiser talks about the Bitcoin revolution in his recent video from the Keiser Report. Love this guy and his segments are always very interesting. And in this episode, I thought it was noteworthy to mention two points he brought up.
"Bitcoins are increasingly becoming an asset class, and he believes this will boost Bitcoin prices to the hundreds of thousands."
Is that too far-fetched? What do you think? Is the Bitcoin boom still at its infancy?
"In today's failing economy, there's only three refuges: Gold, Silver and Bitcoin. That's it. If you're looking to decapitalize the Banks and preserve your own economic sovereignty, you have only these 3 choices. Full stop."
Can Bitcoin really gain enough value and stability to stand alongside Gold and Silver as hard assets?
What the video for yourself!
Tell me what you think in the comments section below! =)

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