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Adam Montana Weekly 12 August 2020


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Why Traders Expect XRP to See an Explosive Rally Despite Stalling Uptrend

XRP has been seeing mixed price action in recent weeks. The cryptocurrency was able to post some massive gains just a couple of weeks ago, but its momentum has since stalled after it faced a firm rejection at $0.33.

From the point forward, the crypto has been drifting lower ever since, eventually tapping lows of $0.27 before finding some support.

The cryptocurrency is now starting to show some signs of life as its buyers attempt to propel it past its heavy resistance at $0.30.

This level has catalyzed multiple rejections in the past, but it is imperative that bulls surmount it in the near-term if they want to spark any further upside.

Analysts are now noting that the cryptocurrency’srecent dip led it to test a crucial support level, with today’s climb marking a bounce at this level.

This is a bullish sign that may indicate upside is imminent for XRP.

XRP Flashes Signs of Strength as Analysts Eye Upside

At the time of writing, XRP is trading up just under 1% at its current price of $0.297. This is just below its key resistance level that has been holding strong for over a week now.

Overnight, bulls did attempt to break this resistance on a couple of occasions, but each time they were met with heavy selling pressure that slowed the crypto’s ascent.

Despite not breaking above this level just yet, it is important to note that the strength of this short-term uptrend is growing, with the cryptocurrency’s multiple bounces at $0.27 suggesting that its recent lows may mark a local bottom.

While pointing to the strength of this support, one analyst explained that he “wouldn’t be betting against” the cryptocurrency at the present moment.

“Don’t know about you but I wouldn’t bet against XRP at these levels.”

XRP


 

Analyst: Expect the Token to Gain Against Bitcoin in Coming Days

While looking towards XRP’s Bitcoin trading pair, analysts are also expecting upside.

One trader explained that he is looking for a move up towards the 3.3k sats region after it backtested its key support at 2.4k sats.

“XRP: Looking like it can move up towards 3k sats (prev range highs) and follow ETH up and majors up. Taking a deeper look on this I think most the market is sleeping on it but won’t be long. A lot of signs pointing towards a major reversal. But for now, short term targets,” he explained.

Pentoshi-2-860x538.jpg


 

If XRP does follow Ethereum’s lead, its price may see a major breakout while Bitcoin continues consolidating below $12,000.

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1 hour ago, Pitcher said:

It was supposed to say Thank you NEPats.  I have too many distractions at my house.  Haha.  

 

Thank you NEPats and all the others for your thoughts and comments 

Honored man, I know you have much more experience than me with charts and trading.... I’m just seeing the fundamental problems facing the world and I feel from my years of research that xrp and ripple net are a coin and company solving a problem, not a coin looking for a made up problem to solve 

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5 minutes ago, NEPatriotsFan1 said:

I’m just seeing the fundamental problems facing the world and I feel from my years of research that xrp and ripple net are a coin and company solving a problem, not a coin looking for a made up problem to solv

 

I agree.  Go to the Crypto Currencies Thread where I posted an article about this.  You have to have utility or it’s like Snailfood.dotcom in 1999 that went to 120 before it went bankrupt.  It’s dejavu all over again.  

 

We’re looking for the Googles,  Amazon’s and Microsoft’s of crypto.   Such an amazing opportunity if you can hang for a number of years.  Don’t be a Greg, I had all those stocks listed above from 2000-2004.   Wow did I sell too soon.  

 

 

419D576D-4030-4E3E-9372-83966A89E51E.jpeg.fc41af5b2bf1676e384f8da906495706.jpeg

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30 minutes ago, DF#1 said:

Where do you guys buy the XRP?

 

At the local grocery store where else. In the cereal isle.

 

It’s Friday.

 

I bought my fist batch on Coinbase.  I also buy off the Kraken and Gemini exchanges.  I can assure you for a fact, Coinbase is very simple.  The other two tried my patience getting verified and funded.  

 

Go on Google and search best Crypto Exchanges for Beginners, that are in the US, that are easy to use and then make the best choice for you.  Try to stay with ones that are well known and have a good reputation for security!!!

 

Make sure your security on your phone or computer is top notch and make sure you have VPN service for all your devices.  Security is imperative.  

 

Look into getting an offline Leger, like Nano S or X .  There are others as well. Google Crypto Ledgers and watch some videos.  

This investment isn’t like running down to the local bank and opening up an account. You have to do some homework and you have to have top notch security measures.  

 

 

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Dinarock, I just saw your post.  I think NEPats did a good job answering your question and I pretty much agree.  Anything over the 2000 ish current price would be pure speculation  

 

i think if you buy it you buy with the idea of holding 5-10 years for the big HR.  If we do get a chance to dump some shares over 1-300 to get some money flowing that would be awesome. I’ve bought extra shares to trade if we get the oppo and a core position which will be a long term investment.  Try to be patient and wait for a pullback to .22-.24.  If it takes off don’t chase it.  It will probably consoliste or retrace back down. I never chase. I ALWAYS BUY THE CONSO OR PULLBACK. 

 

A real easy rule, buy when it crosses up the EMA 9 after a PB or conso and sell or short if the price crosses down the EMA 9.  You don’t have to sell or buy the first bar crossing. Make sure and get the trend right. The Parabolic Sar will help determine a new trend. The PS Dot below the Price for up trend and PSar dot above the Price for the down trend.  You can get a good chart for free for your phone at TradingView at the App Store. I use it and like it just fine. For better free charting you can go to Stockcharts.com or I hear Bitstamp has a good chart.  

 

Those EMA9 works well on any time frame but try to stick with a Daily chart.  

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On 8/14/2020 at 10:06 PM, NEPatriotsFan1 said:

Honored man, I know you have much more experience than me with charts and trading.... I’m just seeing the fundamental problems facing the world and I feel from my years of research that xrp and ripple net are a coin and company solving a problem, not a coin looking for a made up problem to solve 

Like the way you put that.   :twothumbs:

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New Research unveils how pump and dump schemes work in crypto industry

New Research unveils how pump and dump schemes work in crypto industry
Photo by TETrebbien on Unsplash

Photo by TETrebbien on Unsplash

A new research paper from the University of Technology in Syndey found that pump and dump schemes are rife in the crypto markets, having recorded at least 355 market manipulations in the seven months. Up to 23 million people participated in the schemes.

These pump and dump schemes, however, are almost nothing like the ones that have plagued the stock market for decades—everyone in the crypto market seems blatantly aware of what they’re doing.

A peculiar form of pump and dump schemes formed in the crypto industry

While it’s undeniable that the cryptocurrency market has become too big to be ignored both by governments and large institutions, some of its aspects are still a thorn in the eye of many regulators.

The most common type of market manipulation seen in the cryptocurrency space are pump and dump schemes. Most commonly associated with the traditional stock market, pump and dump schemes are a manipulation technique in which traders take long positions in securities and then artificially inflate or pump their price before unloading their positions at inflated prices.

In their paper titled “A new wolf in town: Pump and dump manipulation in cryptocurrency markets,” Anirudh Dhawan and Talis J. Putniņš found that the manipulations seen in the crypto industry differ from those seen in the stock market in one crucial factor—the awareness of its participants.

According to the paper, the most important difference is that in cryptocurrency pumps and dumps, the manipulators make no pretense of having private information about a specific token being undervalued. In a conventional pump and dump scheme, manipulators try to convince investors to buy stock by spreading either false or hugely inflated positive news about the stock in a bid to get investors to buy.

Instead, cryptocurrency pump and dump schemes are openly discussed in Telegram or Discord groups, and “pump signals” on any given coin are publicly declared.

“Cryptocurrency manipulators typically do not seek to trick people into believing that a coin is mispriced on the basis of fundamentals—they explicitly communicate to the pump group members that a coin is being pumped, as opposed to representing a great investment opportunity.”

While this might not sound uncommon to the more experienced traders, it’s a relatively novel feature in financial markets. It also raises two very interesting questions the researchers tried to answer in the research:

First, why does anyone participate in these pumps, and second, how are manipulators able to profit if they aren’t fooling any of the other participants?

A risky game for overconfident traders and gamblers

As pumps provide negative expected returns for anyone after than the manipulator, the research concluded that rational individuals don’t participate in pump and dump schemes.

There are, however, two specific types of traders that participate in such schemes.

According to the paper, the first type are overconfident traders that overestimate their ability to sell their tokens at the highest price. The second are gambles.

Overconfident individuals that believe they are more skilled than the average crypto trader usually expect to enter and exit pumps faster than everyone else. This is such a widespread occurrence in the market that, when considering enough parameters, it is possible to calculate the expected payoff of a pump for an overconfident individual. Another interesting finding is that overconfident traders tend to prefer less liquid coins when engaging in pump and dump schemes.

Unlike overconfident traders, the second major group that participates in pumps and dumps doesn’t see this type of market manipulation as a one-time payoff opportunity. Gamblers tend to have a preference for “lottery-like” assets—they don’t participate in a single pump and dump, but in a series of schemes that collectively constitute a game.

The mechanics of a pump and dump scheme

To uncover cases of market manipulation in the crypto market, the researchers dug deep into chat history data from Telegram pump and dump channels to find cases where the administrator pre-specified a date, time, and exchange for the pump. After cross-referencing that with pump data from Binance and Yobit, the researchers identified 355 pumps that occurred in the period between December 2017 and June 2018.

In the seven months, there were 1,307 cryptocurrencies traded on the two exchanges. However, as the researchers were only able to gather all of the necessary data for 197 coins, they concluded that around 15 percent of all coins experienced at least one pump and dump manipulation during that time. In reality, this number could be closer to 30 percent.

Nonetheless, the numbers show that pump and dump manipulation is widespread and frequent.

Volumes traded during these pump and dump episodes are also economically meaningful—the report found that around $350 million was traded during the 355 pumps in the paper’s sample.

An example of an almost perfectly executed pump and dump scheme was ChatCoin (CHAT). The pump, according to the research, was run on the ‘Big Pump Sigal’ (BPS) group on Telegram. With its 63,000 members, the group is filled with manipulators orchestrating pumps and traders eager to turn a profit.

The administrators of the group announced the exchange, data, and time at which the pump will occur, but not the actual coin that will be pumped. Announcements like this allowed the participants of the pump to prepare for the trade by transferring funds to the exchange and be online and waiting for the so-called “pump signal.”

Messages sent by the administrators of the ‘Big Pump Signal” Telegram group Messages sent by the administrators of the ‘Big Pump Signal” Telegram group. (Source: “A new wolf in town: Pump and dump manipulation in cryptocurrency markets,” Anirudh Dhawan and Talis J. Putniņš)

The signal, in this case, was the announcement of the coin being pumped. Signals are usually published through images, as shown in the screengrab above, to prevent the messages from being automatically flagged.

The price movement for ChatCoin before and after the pump signal backed up the claim that pumps usually targeted low-liquidity cryptocurrencies. While the graph below doesn’t go farther than 15 minutes before the sign, CHAT’s price was on the low end of the spectrum and relatively stable for days at around $0.06. The pump signal, given at 20:00 GMT on Jun. 10, 2018, caused CHAT to go parabolic and peak at just over $0.09 around 17 seconds after the pump signal.

Graph illustrating the price movement for ChatCoin before, during, and after the BPS pump Graph illustrating the price movement for ChatCoin before, during, and after the BPS pump. (Source: “A new wolf in town: Pump and dump manipulation in cryptocurrency markets,” Anirudh Dhawan and Talis J. Putniņš)

The importance of market manipulation research

While taking up the resources to conduct research as extensive as this might seem futile to some, the current market conditions just highlight its importance. Anirudh Dhawan, one of the authors of the paper, told CryptoSlate that studying these schemes is vital because they harm the reputation and integrity of the entire crypto market:

“Institutions are likely to stay away from these markets, and regulators are likely to use this manipulation activity as a reason to block moves to expand the markets—as the SEC did in the case of Bitcoin ETFs.

Aside from that, these kinds of schemes provide a useful dataset to examine market manipulation. Dhawan told us that you don’t typically see market manipulation happen in the open, as is the case with crypto pumps and dumps, making them a rare opportunity to study a relatively frequent phenomenon in the financial markets.

“Our aims with this research project were to bring such kinds of manipulation schemes to light and examine why people participate in these schemes in the first place,” he said.

The research could act as a useful base both for companies in the crypto industry and government entities looking to regulate them. Currently, a lack of both regulation and its enforcement allows this type of manipulation to persist and flourish. Such widespread manipulation ultimately leads to a loss of confidence in the crypto market, which, in turn, impedes its growth.

The only thing left to do is find the right balance between and enforce regulations that facilitate a safe and healthy market without suffocating it.

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