Welcome back everyone to this week’s edition of my Bitcoin - Forex Combo Strategy and a warm welcome to all new readers! Bitcoin is leading the cryptocurrency market capitalization higher and increasing its dominance, but the rest of the pack also known as altcoins is lagging behind. This begs the question: “Where is the altcoin season?” There have been a few analysts which predicted the start of it and many cryptocurrency traders have started to diversify out of Bitcoin and into altcoins in order to capture the attractive upside potential. So far they have been largely disappointed as altcoins have clearly lagged Bitcoin.
As I have pointed out at the start of this year, 2019 will see a great decoupling of the cryptocurrency sector. This means that Bitcoin will no longer lift and sink all coins. There are some really great altcoins out there and then there are scores of projects available which have little to no potential. Before I dive deeper into this topic, anyone who is serious about earning a consistent flow of capital should give up on the idea to find the next Bitcoin. I doubt we will see any altcoin jump from a few pennies to 20K and above. This doesn’t mean that there is not money to be made in altcoins and ignoring this potential would be non-sense.
Let’s take a quick look at my own cryptocurrency portfolio and then I will discuss altcoins and the long awaited altcoin season with you guys. Since last week’s update “Bitcoin - Forex Combo Strategy: Ethereum Turns 4”, Bitcoin started to bounce off of its support level and briefly crossed above $12,000 before pulling back. I think we may see more downside before pushing towards a new 2019 high as the most recent spike in price action represented the third lower high, a bearish development. I happily hodl my 500 Bitcoin which carry an average entry price of $8,500, but I won’t be surprised if price action violates its current support level. I remain bullish on Ripple where I currently hodl 40,000,000 Ripple at an average entry price of $0.3388. Litecoin has its halving event, which as recent research indicates, has no long-term impact on price action. I am confident hodling 20,000 Litecoin which I bought at $77.00. The three charts below show my Bitcoin, Ripple and Litecoin holdings.
My bearishness on Ethereum has not changed, but speaking of Ethereum, I don’t consider Ethereum an altcoin and I believe that the cryptocurrency sector will soon agree with me that a few altcoins deserve the upgrade. Over the past month, Bitcoin was stuck mostly below $10,000 as it carved out support. The rally which followed allowed Bitcoin to increase its dominance on the cryptocurrency sector to just shy of 70%. For the time being, cryptocurrency traders appear disinterested in altcoins which is further pushing out the long awaited altcoin season.
Adding to this, trading volume of Bitcoin has soared to 72% over the past 24 hours. The Block’s Director of Research Larry Cermak pointed out that “Coinbase volume breakdown in the last 24 hours: BTC – 72.0%, LTC – 10.2% (outlier this week because of the halving), ETH – 8.8%, BCH – 2.5%, XRP – 2.5%, Chainlink – 1.4%. The rest combined (EOS, XLM, BAT, ETC, REP, ZRX, ZEC, Decentraland, Golem, district0x, Loom, Civic) – 4%.” While Bitcoin remains the clear favorite, I think that over the course of the summer we will start to see some rotation back into altcoins.
Bitcoin received a big boost from geopolitical events over the past few trading sessions. Due to its emerging status as Digital Gold, Bitcoin saw capital inflow from other asset classes as portfolio manager diversified out of traditional risk assets. Circle’s CEO Jeremy Allaire noted “You can very clearly see some macro correlation there. I think the broader theme of, you know, Bitcoin specifically, crypto more broadly participating in these global macro forces is becoming more and more clear. Rising nationalism, rising amounts of currency conflict, trade wars, these all obviously are supportive of a non-sovereign, highly secure digital store of value.”
What does this mean for altcoin season? As the entire global financial system is in risk-off mode, those who were anticipating an altcoin season need to wait a bit longer. While I do think that there are a dozens of great altcoins out there, I think that it may be 2020 until we will see a more significant push higher. That doesn’t mean that those who are interested in participating in the potential upside should simply ignore altcoin. Now is a great time to start accumulating before the crowd starts chasing them. Remember, when its comes to making money in financial markets you always want to be in the minority. When everyone is chasing Bitcoin higher and selling altcoins, you should be looking into buying altcoins while not necessarily selling Bitcoin as it is a great long-term asset to hold.
It is not all up, up, up for Bitcoin and neither is it down, down, down for altcoins. Cryptocurrencies are not as binary as many would like them to be. I mentioned at the end of last year that 2019 will be an exciting year for the entire cryptocurrency space. I can highly recommend that you catch-up with some of the recent posts, such as “Bitcoin - Forex Combo Strategy: The Ethereum Killer” or “Bitcoin - Forex Combo Strategy: Is Dash Threatening Bitcoin?”.
This brings me to updates to my forex portfolio. Last week I closed with four open positions, three of which were closed for a profit and one remains open. On August 6th 2019 I closed my 300 lots short position in the USDCHF at 0.9735 for a profit of $507,280. On the same day I closed my 300 lost EURJPY long position at 119.500 for a profit of $144,911. Last week’s update showed only a 100 lots EURJPY long position, but on August 5th 2019 I added 200 lots at 118.000 for a margin requirement of $44,870 with a pip value of $1,891.38. Earlier today, on August 7th 2019, I closed my 100 lots long position in the EURCAD at 1.4950 for a profit of $229,608. The three charts below show my closed forex trades.
My 100 lots long position which I took on July 26th 2019 at 16.400 for a margin requirement of $82,240 with a pip value of $5,000 remains open as I believe we may head closer to $20 in this precious metal. Safe haven assets are in demand, as I outlined when I wrote about Gold hitting $1,600 this year. The sole reason for my exit was that I saw greater opportunities at that time in the cryptocurrency sector and I was re-allocating my assets. The chart below shows my open Silver position.
On August 1st 2019 I took a 200 lots short position in the USDJPY at 109.150 for a margin requirement of $40,000 with a pip value of $1,891.38. The trading recommendation can be found at “USDJPY Fundamental Analysis – August 1st 2019”. Yesterday on August 7th 2019 I closed this position at 105.650 for a profit of $661,983. Also on August 1st 2019 I took a 200 lots long position in the GBPAUD at 1.7710 according to this trading recommendation “GBPAUD Fundamental Analysis – August 1st 2019”. The margin requirement was $48,580 with a pip value of $1,347.26. Earlier today, on August 7th 2019, I closed this trade at 1.8160 for a profit of $606,267. On August 2nd 2019 I added a 200 lots long position in the EURAUD at 1.6350 according to the alternative recommendation on this analysis “EURAUD Fundamental Analysis – August 2nd 2019”. The margin requirement was $44,871 with a pip value of $1,347.26. Earlier today I closed this trade at 1.6750 for a profit of $538,904. The three charts below show my closed trades.
Yesterday, on August 6th 2019, I sold 200 lots in the EURGBP at 0.9200 for a margin requirement of $44,870 with a pip value of $2,429.00. You can get read the analysis at “EURGBP Fundamental Analysis – August 5th 2019”. The image below shows my open position in this currency pair.
Here is the summary of my Bitcoin - Forex Combo portfolio: I hodl 500 Bitcoins worth $5,996,500, 40,000,000 Ripple worth $12,164,000 and 20,000 Litecoin worth $1,858,800 plus a total cash portfolio worth $4,268,132. In addition I have the following forex positions in my portfolio: a 100 lots Silver long position worth $414,240 and a 200 lots EURGBP short position worth -$49,861. My total Bitcoin - Forex Combo portfolio is worth $24,651,811, up $3,764,757 from last week’s value of $20,887,054 and at a new all-time high. The recovery in Bitcoin plus the excellent performance of my forex trades over that past week have pushed my overall portfolio to a new all-time high. Last week I noted that I believe August will see new record highs for my Bitcoin - Forex Combo Strategy and it delivered them. Don’t get left behind as others boost their earnings from the powerful combination of the forex and cryptocurrency market. Open your PaxForex Trading Account today and start earning more per trade with my Bitcoin - Forex Combo Strategy. Just comment below with any questions you may have and I will be happy to help you get started with my Bitcoin - Forex Combo Strategy!