Market Outlook #37

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.


Market Outlook #37 (26th May 2019)

Hello, and welcome to the 37th Market Outlook.

After several dynamic weeks, this past week has been somewhat subdued, with most coins, including Bitcoin, in consolidation. That said, many alts are painting a series of higher-lows and higher-highs after finding local bottoms recently, and that is promising.

In today’s post, I’ll be covering the past week’s price-action in Bitcoin, Ethereum and Monero, as usual, plus taking a look at opportunities in Tron and BitTube.

Bitcoin:

Daily:

BTCUSDDaily

1H:

BTCUSD1H

Price: $8003

Market Cap: $141.846bn

Thoughts: So, this week has been rather relaxed relative to the prior few. Rather than the expected bullish continuation above the $8400 ‘double top’, as can be seen in the Daily chart, we got a period of consolidation and a short-term range being formed. However, looking at the Daily, we can still see the intact parabola with old resistance levels becoming new support. Volume has started to decline and next week will certainly bring a breakout to one side or the other. But to which side? Looking at that clear double top at $8400, I would be very surprised if we didn’t move through that to trap shorts before getting any sort of correction…

Looking now at the 1H chart, we can see the range that’s been marked out, with $8400 acting as range resistance and $7600 acting as range support for the past week. Within this larger range, we are also trading inside a short-term range between $7920 and $8110. I am watching for a breakout on significant volume above or below this short-term range to determine whether we will gun for the $8400 ‘double top’ or break down and move back towards $7600 and likely lower. Bias remains bullish until proven otherwise.


Ethereum:

ETH/BTC

Daily:

ETHBTCDaily

4H:

ETHBTC4H

Price: $250 (0.03121 BTC)

Market Cap: $26.555bn (3,320,056 BTC)

Thoughts: As expected in last week’s post, we did see a retrace on ETH/BTC towards the reclaimed support at 0.0306 BTC, with price printing somewhat of a bull-flag for those who trade patterns. Looking at the Daily chart, I have depicted the trajectory I expect Ethereum to take over the coming weeks, with a possibility for one last drop down into support at 0.0305 BTC before bullish continuation towards trendline resistance.

From the 4H, we can see the local high printed at 0.0348 BTC and the subsequent move back into support. The 4H is currently rejecting a close below 0.031 BTC, but we need to see a higher-high made above 0.0327 BTC before a bullish continuation is on the cards. Volume has been declining on this pullback, which is positive for bulls. I expect we’ll get that higher-high next week.


Monero:

XMR/BTC

Daily:

XMRBTCDaily

Price: $86.41 (0.0108 BTC)

Market Cap: $1.469bn (183,723 BTC)

Thoughts: Monero remains capped by significant support turned resistance at 0.0116 BTC, following a weak breakout above short-term trendline resistance. A bullish reversal will only be confirmed once that support is reclaimed on solid volume, which I believe will occur when Ethereum leads the charge. Beyond that, a reclamation of the 200-day moving average would mark the beginning of a new bull cycle to me, as this has capped price since the beginning of the bear market.


Tron:

TRX/BTC

Weekly:

TRXBTCWeekly

Daily:

TRXBTCDaily

4H:

TRX4H

Price: $0.029 (368 satoshis)

Market Cap: $1.961bn (245,270 BTC)

Thoughts: Whilst there are many speculators that decline to touch Tron, much like they decline to go near Ripple, I simply look at profitable opportunities, and Tron looks very bullish.

Looking at the Weekly chart, we can see that price is currently trading inside an historical accumulation zone; one that has led to two bull cycles in the past. As such, this is likely a rewarding area for buyers.

Moving onto the Daily chart, price looks to have formed a potential cyclical bottom at 310 satoshis, though is currently capped by trendline resistance and horizontal resistance at 400 satoshis. A Daily close above both of these areas of resistance would be a clear mark of a new cycle beginning, in my opinion, and the next area of interest would be 530 satoshis.

Finally, from the 4H chart, we can see that price has broken out of a bullish pennant on significant volume, making a move towards that level of support turned resistance around 400 satoshis.

All I’m saying is that it looks like a low-risk, high-reward trade to me…


BitTube:

TUBE/BTC

Daily:

TUBEBTCDaily

Price: $0.048 (606 satoshis)

Market Cap: $7.091mn (887 BTC)

Thoughts: I figured I’d take a look at a smaller coin, given that the past couple of Market Outlook posts have been focused on the larger ones. BitTube is one that looks promising to me at current prices, as, much like Tron, it is in an area of historical accumulation, preceding bull cycles. Further, price has clearly broken above trendline resistance on good volume and is currently retesting it as support. Entries here have between 15-20% of downside risk, with possible upside of 200-300%. It’s a no-brainer, really.

And that concludes this week’s Market Outlook. I hope you’ve enjoyed the read. Feel free to leave any comments or questions below!


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.

Coin Report #21: Stratis

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.


N.B: In the spirit of full transparency, the following Coin Report on Stratis is a Sponsored Post.

Welcome to the 21st Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Stratis. This will comprise of an analysis of a number of significant metrics, an evaluation of the project’s community and development and an overview of its price-history. The report will conclude with a grading out of 10. I hope you enjoy the read!

Introduction

For those that have read the memoir chapters of my book, you’ll know that I have some fond history with Stratis, as it was one of the first trades I made when I returned to the space after my break in January 2017.

I bought some in late February or early March of that year and recall selling for a 2 or 3x return, despite the coin rallying over 100x against BTC later that year. In retrospect, perhaps not so fond a history…

Despite this, I have always been keen on the project, and have held multiple positions since that original trade, though, as I am first-and-foremost a speculator, I have not held any through multiple cycles. Nonetheless, I kept relatively up-to-date with the ongoings of the project via its Twitter page, and knew that, when the opportune moment arose, it would certainly be worth buying some. I did not expect its price to fall over 95% against BTC from its all-time highs, and thus perhaps the opportunity is at its peak at present.

I must state, for transparency’s sake, that I do currently own a position in Stratis, and that the findings of this report will either prove or disprove the more surface-level fundamental analysis I carry out for my own sake.

I hope this report will prove objective where it must be and fair on more subjective matters. For those who’d like to learn a little more about Stratis prior to reading this report, here are some primary links:


Fundamental

General:

Name: Stratis

Ticker: STRAT

Algorithm: X13

Consensus Mechanism: Proof-of-Stake

Sector: Blockchain Solutions

Exchanges: Binance, Poloniex, Bittrex, HitBTC, Upbit, LiveCoin, Bittylicious, Crex24, BitVavo, Changelly

Launch Overview

Stratis was founded by Chris Trew in June 2016 and developed with a C# Full Node, as opposed to being written in Bitcoin’s C++ programming language. The project launched with an ICO that raised 915 BTC, just shy of its 1,000 BTC target, and ~81mn of the 84mn available STRAT were distributed to investors, giving an average price of $0.0073 (1127 satoshis) per STRAT during the ICO.

STRAT operates using the X13 hashing algorithm and a Proof-of-Stake consensus mechanism, with 1 STRAT rewarded per newly forged block  indefinitely.

Price-History Overview

Given that Stratis has been around since the summer of 2016, there is plenty of price-history available to study. Most significantly, STRAT formed an all-time high of 0.0047 BTC in May 2017, and has since formed lower-highs on every mini-cycle. It formed an all-time high of $22.66 in January 2018. Both, STRAT/BTC and STRAT/USD are currently over 95% away from their all-time highs.

Project Overview

Stratis is a blockchain solutions platform, developing an ecosystem of products and services catered to businesses and organisations that seek to test and integrate said solutions. Its current portfolio of products and services consists of its Full Node, Smart Contracts, Sidechains, Stratis Identity and an ICO platform. Stratis Group Limited, based in London, will also offer blockchain consultancy to businesses.

As stated in their whitepaper:

Stratis is a powerful and flexible blockchain Development Platform designed for the needs of real-world financial services businesses and other organisations that want to develop, test and deploy applications on the blockchain. Stratis blockchain apps can be developed in pure C# and can also utilize the Microsoft .NET framework, while also taking advantage of the powerful Stratis APIs and framework.

Stratis significantly simplifies the development process for creating Blockchain applications and accelerates the development life cycle for blockchain development projects. Stratis private chains allow businesses to deploy their own customised blockchains without the overheads inherent in running their own blockchain network infrastructure.

Stratis’s turnkey solution enables developers and businesses to create, test and deploy blockchain-based applications quickly and easily, all without the costs and security concerns that would otherwise arise from an in-house implementation.

Indisputably, a tall order. I look forward to seeing how Stratis fares in this regard, as well as the progress it has made since its inception.

Let’s begin with some Metric Analysis:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 20th May 2019. For anyone reading this who has yet to read a Coin Report, it might be worth reading this section of the first report, where any potentially unfamiliar terms are explained. For any terms or metrics specific to this post, I will provide explanations besides the figures.

Metrics:

General:

Price: $0.88 (11097 satoshis)

Circulating Supply: 99,334,497 STRAT

Total Supply: 99,334,497 STRAT

Exchange Volume: $1.487mn

Network Value: $87.33mn (11,023 BTC)

Maximum Supply: N/A (98mn STRAT distributed after ICO; indefinitely Proof-of-Stake thereon)

% of Max. Supply Minted: N/A

Network Value at Max. Supply: N/A

Category: Largecap

Exchange Volume-to-Network Value: 1.7%

Average Price (30-Day): $0.87

Average Exchange Volume (30-Day): $1.718mn

Average Network Value (30-Day): $86.637mn

Average Exchange Volume (30-Day)-to-Network Value: 1.98%

Volatility* (30-Day): -0.04489

Average Daily On-Chain Transactions (30-Day): 287

Average Daily Transactional Value** (30-Day): $1.789mn (source)

NVT*** (30-Day): 48.81

% Price Change USD (30-Day): -21.24%

% Price Change USD (1-Year): -84.94%

USD All-Time High: $22.66

% From USD All-Time High: -96.1%

Premine % of Max. Supply: 0

Premine Location: N/A

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 33.67 BTC

Liquidity-to-Network Value %: 0.31%

Supply Available on Exchanges: 1,944,518 STRAT

% of Circulating Supply Available on Exchanges: 1.96%

*Volatility is calculated by taking the average price over the given time-period, calculating the difference between it and the highest price and it and the lowest price over that same time-period, and multiplying those figures together. The closer to 0, the less volatility during that period, and vice-versa. Read this for more on volatility.

**Transactional Value in $ is calculated by taking the daily transactional value in STRAT and multiplying it by price.

***NVT is calculated by dividing the Network Value by the Average Daily Transactional Value. See here for more on NVT.

Supply Emission & Inflation:

Block Reward Schedule: 1 STRAT per block, distributed via Proof-of-Stake. 1440 blocks forged a day, on average. Static rewards indefinitely.

Average Block Time: 60 seconds

Current Block Height: 1,314,491

Annual Supply Emission: 525,600 STRAT (58.33 BTC)

Annual Inflation Rate: 0.53%

Circulating Supply in 365 Days: 99,860,097 STRAT

Staking & Masternodes:

Network Staking Weight: 23,342,315 STRAT (source)

Staking ROI (Annual): 2.25%*

*To calculate annual staking ROI: (Annual Supply Emission / Network Staking Weight = 525,600 / 23,342,315 = 2.25%

Distribution:

Address Count: 72,411

Supply Held By Top 10 Addresses: 29.76%

Supply Held By Top 20 Addresses: 39.18%

Supply Held By Top 100 Addresses: 62.81%

Inactive Address Count in Top 20 (30 Days of No Activity): 10

ICO:

The following details were taken from here.

ICO Period: June 25th 2016 To July 26th 2016

Total Coins: 98,000,000 STRAT

Coins Available For Sale: 84,000,000 STRAT

Coins Sold: 81,188,997 STRAT

Total Raised: 915 BTC (~$600k, at the time)

Average ICO Price Per Coin: 1127 satoshis ($0.0073)

ICO Breakdown: 84mn STRAT to investors; 8mn STRAT to team; 2mn STRAT to partners and advisors; and 4mn STRAT to marketing campaigns

Analysis:

Well, there’s rather a lot to unpack here, so let’s begin with the metrics related to on-chain transactions:

Thankfully, Stratis has a Chainz explorer, which greatly simplifies my research process, particularly for on-chain transaction analysis. Using this source, I found that Stratis averaged 287 Daily On-Chain Transactions for the past month, amounting to an Average Daily Transactional Value of $1.789mn, excluding block rewards + fees. This is very impressive, off the bat, as it gives Stratis a NVT of 48.81; only slightly higher than that of Bitcoin at present, which is 41.5. This means that, relative to its Network Value (market cap), Stratis is processing almost as much on-chain transactional value as Bitcoin. Clearly, use of the blockchain is in demand.

Before we move on to meatier topics, I’d like to quickly highlight Stratis’ 30-day Volatility of -0.04489. This places it in the middle of the pack, relative to coins from previous reports.

Now, let’s take a look at the remaining General metrics before moving on to Supply Emission, Staking & Masternodes and finally Distribution:

Some of the most significant metrics to evaluate for speculators are those related to buy-side and sell-side Liquidity. I found Stratis to have buy-side Liquidity of 33.67 BTC within 10% of spot price across all listed exchanges, equating to 0.31% of its Network Value. This is the fifth-highest degree of liquidity found amongst all previous reports and indicates a clear demand for STRAT at current prices.

Concerning sell-side Liquidity, Stratis was found to have 1.94mn STRAT available for purchase in the orderbooks across all listed exchanges, equating to 1.96% of its Circulating Supply; the sixth-highest figure amongst previous reports, indicating an equally strong desire to sell, though not necessarily at current prices.

Now, let’s take a look at the volume-related metrics:

Stratis traded $1.487mn of Exchange Volume in the past 24 hours, equating to 1.7% of its Network Value; a satisfactory figure. More importantly, its Average Daily Volume for the past month was $1.718mn, equating to 1.98% of its Average Network Value for the same period; a clear sign of sustained interest. It does, however, rank Stratis somewhere in the middle of the coins previously reported on for Average Exchange Volume-to-Average Network Value.

Moving onto Supply Emission, based on the indefinite block rewards of 1 STRAT per block and 1-minute block times, I calculated that 525,600 STRAT will be minted annually (58.33 BTC-worth at current prices). This gives Stratis a negligible annual inflation rate of 0.53% (ever-decreasing). As such, there should really be no headwinds for price growth.

However, most significant is the relationship between this Supply Emission and the Volume metrics mentioned above:

Given that 525,600 STRAT are minted annually, we can work out that the average daily supply emission is 1,440 STRAT, or 0.16 BTC-worth at current prices. This equates to $1265 of daily supply emission. As Stratis traded ~$1.48mn of volume over the past 24 hours, and an average of $1.72mn of volume daily for the past month, we find that Stratis’ average daily supply emission is covered a colossal 1,176x by its 24-hour volume and 1,358x by its Average Exchange Volume. Further, Liquidity of 33.67 BTC covers the average daily supply emission by 210x.

In short, any decreases in price are undoubtedly driven either by distribution from larger holders or distribution from smaller holders, and not from the daily emissions being dumped on the market.

Now, before we conclude this section with some Distribution analysis, let’s quickly run through Staking & Masternodes:

Firstly, it’s important to mention that Stratis is currently in the process of launching its masternode functionality for its Cirrus sidechain, where a limited number of 10,000 STRAT collateral and 50,000 STRAT collateral will go online and collect rewards via transaction fees and from smart contract deployment on the sidechain. Further, they will receive staking rewards from the collateral whilst the Cirrus sidechain grows in usage. As such, I am unable to include any masternode metrics at present.

With regards to staking, however, using the Chainz explorer I determined the Network Staking Weight to be 23.342mn STRAT; around 23.4% of the circulating supply. Given the relatively low amount of STRAT being staked, the returns for stakers are increased, equating to annual returns of 2.25% on staked STRAT. Whilst not the best ROI, it is 4x higher the annual inflation rate, and so it is definitely worth it for those who have a large position. I expect the Network Staking Weight to increase substantially when cold staking is activated, as we shall come to a little later…

Finally, let’s take a look at Distribution:

I was rather impressed to find that there are 72,411 holders of STRAT, as this is the second-highest address count of all coins previously reported on. With regards to concentration of supply, the top 10 addresses control 29.76% of circulating supply; the top 20 control 39.18%; and the top 100 control 62.81%. Whilst somewhat decentralised, for a project of its size this is a rather highly concentrated distribution. That said, for us speculators, this can work in our favour.

Within the top 20 addresses, 10 were inactive over the past 30 days, indicating that half of the largest holders are content with their position sizes. Most significantly, the richest address added 500k STRAT to his/her balance last month, and the 2nd-richest has added 50k this month. Only 1 of the top 20 addresses distributed any STRAT over the past month: the 10th-richest, who distributed 300k STRAT. The remaining addresses are all staking, with the 20th-richest buying 720k STRAT to stake last month.

And that concludes this section on Metric Analysis. Onto the Stratis Community:


Community:

There are two primary aspects of community analysis: social media presence and Bitcointalk threads. I’ll begin with the former before moving on to the latter.

Social Media:

Concerning social media presence, there are four main platforms to examine: Twitter, Facebook, Telegram and Discord.

Stratis is present on all four platforms. To begin, let’s look at the various social metrics that I calculated from the Stratis Twitter and Facebook accounts:

Twitter Followers: 138,130

Tweets: 1,425

Average Twitter Engagement: 0.18%

Facebook Likes: 7,417

Facebook Posts (30-Day): 5

Average Facebook Engagement: 0.8%

As usual, I will be using RivalIQ‘s social benchmark report for evaluation purposes.

Twitter:

Whilst the Stratis Twitter account does have the largest audience of any coin previously reported on, its engagement rate is not quite as strong; a common problem, however, for accounts with vast audiences. That said, in RivalIQ’s report, we find that the average Twitter engagement rate across all industries is 0.046%, which means that Stratis’ engagement rate is currently 3.9x greater. Further, the average engagement rate for the Media industry (the most relevant in the report) is 0.013%, thus Stratis’ is 13.8x greater. Relative to other coins, Stratis’s engagement is only stronger than BitShares, Ubiq and MonetaryUnit and equal to that of GeoCoin and Cashaa. However, Stratis does have over 40,000 more followers than BitShares and still beats it for engagement, which is quite impressive.

Facebook:

Now, with regards to Facebook, Stratis has a much smaller audience and, as such, stronger engagement. With 7,417 Likes, it has the 4th-largest Facebook audience of any coin previously reported on, but this is around 5% of the size of its Twitter audience. That said, its average engagement rate for the past 30 days was 0.8%, which is 5x greater than the average across all industries and 10x greater than the average of the Media industry. Further, it has better engagement that half of the coins from previous reports. Whilst this is satisfactory, I expect that an equal commitment to a marketing drive on Facebook as that of Twitter would result in growth in both audience size and engagement, and the large discrepancy between the two audiences is likely in part due to the minimal effort expended on Facebook.

Discord:

There are 4621 members in the Stratis Discord; a small group relative to the size of its Twitter audience. It has grown by 86 members over the past week: a 1.86% weekly growth rate.

Announcements is updated at least 3 times a week, with links to blog posts, PR material, interviews and development updates provided. Within the channel, I found that: over 50 masternode applications for the Cirrus sidechain had been completed and that the window of opportunity for applications had been extended to 29th May; a cold staking bounty has been introduced to speed up activation; Stratis have won an AMA with Binance; and the release date for the sidechain and smart contracts will be announced this week.

Important Links houses a number of relevant resources for new members, including the Stratis Academy. There are also channels featuring Github commits and development discussion for the Full Node, wallets, smart contracts and sidechains, all of which are active, which is great to see. Usually, I find that many of the more specific channels within a Discord group get neglected in favour of General, but all of these are in active use, though not necessarily in daily use.

The Support channel provides swift responses to users facing issues, usually within a few minutes of a problem being mentioned.

Lastly, General features near-constant discussion on a daily basis, at least for the past few weeks, with few gaps in activity. Some of this is currently focused on the discrepancies between staking on the Core wallet vs the QT; the imminent announcement of the sidechain and smart contract release date; community-led updates on Stratis development; as well as general discussion about the space.

Overall, solid engagement.

Telegram:

There are 4868 members in the Stratis Telegram.

Whilst the group size is almost identical to that of Discord, the content is entirely dissimilar. As is often expected of Telegram, much of the discussion revolves around the price of STRAT and other trading-related topics. There is some degree of project-related discussion, with community-led updates and blog posts pushed out, but this is limited.

BitcoinTalk:

The Stratis BitcoinTalk thread was created on June 14th, 2016, and has since generated 24,288 posts spanning 1,215 pages in 1,070 days. This equates to 22.7 posts per day, on average. However, in the past 90 days, the thread has had 307 posts, giving an average of 3.4 posts per day; despite the drop-off in engagement, this is still highly active relative to other BTCTalk threads for projects of equal longevity.

Regarding the content of the thread from the past 90 days, there are a lot of interviews conducted with members of the team that are pushed out here, plus more PR material on Stratis exhibiting at global conferences. Further, there is discussion of the addition of Stratis’ ICO Platform to Microsoft Azure, which is an ongoing and growing relationship, marked by Stratis’ status as a Silver Partner of Microsoft. In fact, Microsoft actually tweeted about Stratis. I also found that there have been over 2,000 downloads of Stratis’ v1.1 Smart Contracts package as of February 2019, with over 4,000 downloads in total across all versions. Lastly, I found that there are a multitude of Stratis products currently available on Azure, ensuring accessibility for developers and a seamless onboarding of new users for Stratis.

Moving on through the thread, I learned that cold staking is expected to be activated this year. This will be hugely beneficial for long-term holders with security concerns about hot wallets. Also, the Cirrus sidechain is launching with smart-contracts enabled and a masternode network to be created. Collateral for Cirrus masternodes will be 10,000 STRAT and 50,000 STRAT, with limited availability for each. This network will ensure some degree of decentralisation for the Stratis sidechains.

There are a great deal of detailed blog posts and development updates pushed out on the thread, not only by the team but also by the community. It’s great to see a commitment from community members to driving awareness for Stratis. I also found that some community members have provided excellent breakdowns of the user-cases of Stratis, alongside side-by-side comparisons of it and its competitors in relation to smart contracts and the utility of developing in C#. One of the key points here was related to scalability, in that smart contracts are made scalable by only being utilised on the Stratis sidechains rather than its parent chain. This is invaluable for any potential new users or investors who navigate to the thread to learn more about the project.

Overall, the thread is both informative and active.

The announcement itself is well-designed and branded, integrating visuals with detailed descriptions of the project and its numerous features. It also includes all relevant links and resources, as well as a plethora of press material. There is a lot here for a potential new user/buyer to get stuck into and there is a clear commitment to keeping the community informed.


Development:

For the following Development analysis, I will be evaluating project leadership, the website, the roadmap, the whitepaper, the wallets and finally providing a general overview:

Project Leadership:

There is no team information available on the website but there are over 80 Github contributors and 36 employees found on LinkedIn.

I would have expected some transparency about Stratis Group itself to appear on the Stratis Platform website, given that they are clearly the core developers. From the searches on LinkedIn I found that the team is fairly well balanced and very experienced, though it does lean heavily towards development over marketing, as is expected of such a project.

Chris Trew is the current CEO and Founder, and there are numerous developers specialising in their own areas, alongside those with experience in business development and press relations. From watching a recent AMA with the CEO, I found that they are also hiring a Head of Marketing.

Website:

https://stratisplatform.com/

The website is very clean but not particularly well-branded except in its colour scheme. The homepage is emblazoned with the tagline: Blockchain: We make it easy for you. Whilst this does, broadly speaking, fit the bill, it’s not a particularly engaging piece of copy and, as a potential new user or investor, it doesn’t elicit a desire to learn more.

Further down the homepage, however, we do find out more about the Stratis Platform (and the project, as a whole), with a concise but informative section on blockchain-as-a-service. We can also view a video featuring the CEO on Smart Contracts, plus the benefits of building on Stratis are laid out below this. Further, we find that the STRAT token is used as the fuel for the Stratis Platform, the ownership of which is a prerequisite for use of smart contracts, the ICO platform or the Stratis sidechains. Links to the numerous exchanges at which STRAT can be bought are provided. We are also shown a list of partners, such as Microsoft, Azure, Ledger and Binance. Social links can be found at the bottom of the homepage.

Overall, the navigation and user experience is not particularly bad nor particularly great; it works but it isn’t as smooth as it could be, with navigation menus and links seeming somewhat random and imprecise. For example, clicking Our Team on the Consultancy page leads to the About Us page, which has no information about the team.

I do like that there are separate, detailed pages for each of Stratis’ current products and services. I also like that the News page is filled with a native blog that is regularly updated with announcements and blog posts.

Overall, good but not great.

Roadmap:

https://stratisplatform.com/2019/04/11/2019-development-roadmap/

The roadmap is presented in a recent blog post, dated April 2019.

The graphic representation isn’t particularly helpful or detailed; rather, it shows all of the various components being developed this year, including: a payment gateway; STO platform; a mobile wallet; Unity SDK support; sidechain masternodes; Breeze Privacy Protocol; Java/Javascript support; Proof-of-Stake sidechains; and Stratis Core 2.0.

It does not give any indication as to which of these are completed or the degree of progress or any estimations of expected completions. I would have expected this roadmap to be a little more user-friendly; certainly with better graphics, perhaps interactive and containing links to further details on each component of development. I would have also expected at least some means by which potential users and the current community can judge progress and ensure the team are hitting their marks.

The contents of the blog post go on to provide some further detail on the developments mentioned above:

  • By supporting Java/Javascript, Stratis’ audience and potential userbase grows.
  • The new Breeze wallet will come with further developments of the privacy protocol, plus implementation of SegWit.
  • Adding new algorithm support for sidechains, like Proof-Of-Stake, will help to negate the requirement of forks and widen use-cases.
  • The Cirrus sidechain network will have masternodes that earn rewards from transaction fees and gas (STRAT) for smart contracts.
  • The STO platform widens the current userbase of the ICO platform.
  • Stratis Core 2.0 will have in-wallet visibility for sidechain tokens, allow for deployment of smart contracts and feature better UI/UX, alongside voting mechanisms for sidechains.
  • There will be a mobile wallet for Android and iOS for greater accessibility.
  • The payment gateway being developed will allow merchants to incorporate Stratis payments to their checkout systems.
  • Unity SDK support will allow for the Stratis blockchain to be used for game development, with use-cases such as in-game tokens and asset markets.

As they state, these are the core developments expected for the year, with other developments expected to be delivered.

Whitepaper:

https://stratisplatform.com/files/Stratis_Whitepaper.pdf

The whitepaper is 21 pages in length, and begins with a summary of blockchain, in general, as well as Stratis’ role, which is that the project will be taking a similar approach to blockchain deployment for businesses to that of cloud computing.

Definitions and explanations are provided concerning blockchains and distributed ledgers in jargon-free prose, highlighting the advantages of
blockchain-based solutions, such as transparency, immutability, cost-effectiveness, access to global networks and speed.

Page 6 of the document offers a great overview of the project itself, highlighting its aims of being the go-to blockchain solutions platform for businesses and organisations, with its development in C# ensuring accessibility for developers. There is also a deeper, more technical breakdown offered with accompanying graphics of the architecture of the Stratis Bitcoin Full Node that underpins the Stratis Platform. This is largely written in plain English, with necessary explanations given.

Key features of the platform are depicted, such as private chains for corporations that can utilise the parent Stratis chain; blockchain-as-a-service functionality; dAPP hosting; one-click deployment; fiat gateways and more. Sidechains will serve as a solution for scalability issues. Stratis Group Limited, based in London, will also offer blockchain consultancy services.

Overall, for a somewhat out-of-date document, it is informative and concise and provides any new user with a basic understanding of the vision of the project, though Stratis has certainly expanded beyond many of these goals at present.

Wallets:

There is hardware wallet support by Ledger. There is also a Window, Mac and Linux Core wallet, plus a Breeze lightwallet + Breeze privacy wallet for all three. Further,  there is currently Coinomi support and mobile wallets are being developed.

General:

There are a few things that I’d like to highlight in this section before moving onto the Technical section. According to a recent AMA with the CEO, there is sufficient funding available at the current Stratis price for 3 more years of development, and $4mn has been spent since launch despite the ICO only raising $600k-worth of BTC at the time. This is impressive and assuring for anyone who holds a position or is considering doing so. Not only is there assured longevity, but clearly the team spend money well. A lack of funding and unwise spending are two of the most common pitfalls and death-traps for projects in this space, especially for a project developing in a very competitive environment like blockchain solutions.

The next feature of interest is the Cirrus sidechain, the release date of which is to be announced this week (which will also be the release date for smart contracts). Stratis recently announced two types of masternodes that will be available for Cirrus, using 10,000 and 50,000 STRAT as collateral, with, I believe, limited capacity of 101 masternodes. This will undoubtedly induce some degree of scarcity, given the interest in running a masternode, as will the activation of staking. Both are wins for STRAT holders and speculators alike.

Incentives for running these masternodes were originally expected to come in the form of transaction fees and gas from smart contract deployment, but, as the Cirrus sidechain will likely take some time to come into heavy use, masternode collateral will also receive staking rewards on the parent Stratis chain. Another benefit of the launch of Cirrus masternodes is that it will instigate a Federation, which will act as a governance system for the sidechain and allow for on-chain voting.

Finally, Stratis is the first project to offer smart contracts developed in C#, which is a very popular language for enterprises; the target market for Stratis. This should provide somewhat of a moat around the project if smart contract deployment amongst businesses can gain traction before a host of new competitors for trustless C# smart contracts spring up (thus discounting NEO).

And that concludes my fundamental analysis of Stratis. Onto the Technical:


Technical

STRAT/BTC

Weekly:

STRATBTCWeekly

Daily (1):

STRATBTCDaily

Daily (2):

STRATBTCDaily2

STRAT/USD

Daily:

STRATUSDDaily

Analysis:

There’s quite a lot to unpack here, but let’s begin by taking a look at the Weekly chart for STRAT/BTC to provide some context:

Here, we can see the monster bull cycle that occurred throughout 2017 and the subsequent succession of lower-highs with each mini-cycle. Stratis formed an all-time high in May 2017 of 0.0047 BTC, rallying from its all-time low of 1460 satoshis; a little over its ICO price of 1127 satoshis. That is one of the strongest bull cycles against BTC in history. Following this all-time high, price underwent a bear cycle and formed a cyclical low at 34k satoshis in October 2017, after which it experienced a new bull cycle with the rest of the market and formed a cyclical high at 160k satoshis in January 2018. Subsequently, as we are all aware, we saw the entire market crash and experience an extended bear cycle, which has sent STRAT down to ~10k satoshis; over 95% away from its all-time highs.

It just so happens that this level is right around the prior resistance now likely turned support at 12k satoshis, all the way back from pre-2017. We can see that the Weekly candle formed a doji last week, and a bullish follow-through this week would likely mark a bottom. Price is also currently capped by trendline resistance, and a breakout above said resistance would confirm a cyclical bottom.

Now, looking at the first Daily chart provided, I have depicted price-history as a line chart with a different trendline resistance that has already been broken. RSI hit its lowest of all-time at the start of the month, and price seems to be finding support at the confluence of this old trendline resistance and horizontal support.

Moving onto the second Daily chart, we can see recent price-history more clearly. Most significantly, we can see the breakout above the 200-day moving average in December 2018 on heavy volume, followed by price finding resistance at 42k satoshis and falling back into a short-term range between 20-25k satoshis. This range began to lose the 200-day moving average, with it now acting as resistance, and subsequently range support was lost at 20k satoshis and price tumbled down to a potential cyclical bottom at 10k satoshis. Further, the volume on this sell-off was quite low. I have depicted the path that I expect Stratis to take over the coming weeks, as it breaks above short-term trendline resistance and makes a move back up towards old support at 17k satoshis.

Lastly, we can see from the STRAT/USD chart provided that there is a very high probability that the cyclical low against the Dollar has been found at $0.53. Price broke out above 11-month trendline resistance and has now formed a range between $0.73 and $1.28, with the 200-day moving average capping price. A breakout above $1.28 would mark the beginning of a new bull cycle with initial significant resistance likely found at $2.10.


Conclusion

This report is approaching 6,000 words, and it is time to draw it to a close.

My final grading for Stratis is 9 out of 10.

Here, you can find my grading framework, for reference.

Lastly, here is a link to a Google Sheets file with any significant data from previous reports compiled for cross-comparative purposes. I will keep this updated as I continue to write these reports.

I hope this report has proved insightful and that you’ve enjoyed the read! Please do feel free to leave any questions in the Comments, and I’ll answer them as best I can.


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.

Market Outlook #36

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.


Market Outlook #36 (19th May 2019)

Welcome to the 36th Market Outlook. In this week’s post, I’ll be covering the past week’s price-action in Bitcoin, Ethereum and Monero, as usual, plus I’ll be taking a look at Cardano.

Bitcoin:

BTCUSDDaily

BTCUSD1H

Price: $7908

Market Cap: $140.048bn

Thoughts: In last week’s Market Outlook, I mentioned that the lower timeframes were indicative of a short-term top for Bitcoin, and that we may perhaps retest $7500 this past week before making a move back towards the $6800 area. Whilst we did indeed visit $6800, it was only briefly and only after price made new highs at $8400 a few days ago, having held onto the 4H parabola in place.

Looking at the Daily chart provided, we can see that Bitcoin has been capped at a prior level of resistance, forming a far too clean ‘double-top’ scenario. Further, the higher-timeframe parabolic advance is still very much in play, and the flash-crash into the high $6000s was met with a swift reversal and what looks to be a potential bullish continuation. Prior resistance was turned support at $6800 and the trend remains strong. Volume also doesn’t seem to have dropped off yet; as such, there is no indication that $8400 will hold BTC down for much longer…

Looking now at the Hourly chart provided, we can clearly see the current short-term market structure, where the flash crash to $6660 broke the bullish momentum briefly, but the reversal was relatively swift. Resistance turned support at $7600 has been reclaimed and price is lingering beneath local highs above $8k. I have depicted the bearish and bullish scenarios, but given the strength of the trend and the consistency of the volume, I am leaning bullish.

The bearish scenario would see price begin to break down on the lower timeframes, ultimately making a move back towards that pivot at $7600. If this level was lost again, I’d expect price to move back towards $6700. Price is essentially range-bound for now between $6660 and $8400, with $7600 acting as the range equilibrium.

The bullish scenario is a simple one; some consolidation early next week followed by a move above $8400. This is what I expect to see.


Ethereum:

ETH/USD

ETHUSDDaily

ETHUSD4H

ETH/BTC

ETHBTCDaily

Price: $252.24 (0.03206 BTC)

Market Cap: $26.771bn (3,403,218 BTC)

Thoughts: Unlike my thoughts on Bitcoin from last week’s post, my expectations of Ethereum played out near-perfectly, if a little more explosively than anticipated. We saw a sharp reversal for ETH/BTC, and thus a bullish continuation on ETH/USD.

Looking at the Daily chart, we can see how significant the volume is on ETH/USD at present, with volume equalling that of December 2017 on Coinbase. Price also closed above the 360-day moving average, and I have depicted the path to the next area of significant resistance. I doubt we’ll see much of a retrace prior to $350 being hit.

From the 4H ETH/USD chart, we can see the bullish break in market structure when price closed above $250. A pullback and continuation would be the expected course from here.

Finally, the Daily chart for ETH/BTC paints quite a picture. Most significantly, we have likely now found the cyclical bottom for Ethereum at 0.0246 BTC, indicated by the sharp reversal away from that level on heavy volume, in the process of which market structure on the Daily timeframe turned bullish, a level of prior support turned resistance was reclaimed at 0.0305 BTC and the 200-day moving average was reclaimed.

Trendline resistance is the next port-of-call for ETH/BTC, I believe, and a move above 0.035 BTC would herald the beginning of a new bull cycle and the likely breakout above 0.042 BTC in the coming weeks.


Monero:

XMR/BTC

XMRBTCDaily

Price: $86.26 (0.01087 BTC)

Market Cap: $1.465bn (184,719 BTC)

Thoughts: Monero found support at a critical level this past week: 0.01 BTC. Following this, price broke out above trendline resistance, though not as dynamically as the reversals on other altcoins. Range support has become resistance at 0.012 BTC, and price will need to reclaim this level for 0.01 BTC to be confirmed as Monero’s cyclical bottom.


Cardano:

ADA/USD

ADAUSDDaily

ADA/BTC

ADABTCDaily

ADABTC4H

Price: $0.085 (1067 satoshis)

Market Cap: $2.194bn (276,732 BTC)

Thoughts: I don’t think I’ve ever analyed Cardano on the blog, but it’s current price-action presents a great opportunity, in my opinion; in particular because it is one of the few altcoins on BitMex, and a leveraged long on a potential cyclical bottom is an attractive idea. Now, I rarely ever trade on leverage, but there are rare occasions where it makes a lot of sense to do so.

Looking first at the ADA/USD Daily chart, we can see the strength of trendline support and the fact that price bounced off the 200-day moving average recently on solid volume. We can also see the resistance at $0.10.

More important, however, is the ADA/BTC chart, which shows price finding a bottom at 911 satoshis, above the December 2018 low of 834 satoshis. Following this, price bounced hard and broke out above the trendline resistance that has been in play since April. Currently, the 200-day MA is capping price, but, given the bullish market structure on ETH/BTC, I expect ADA will follow suit once ETH begins moving up again.

Looking at the 4H chart, we can see the clean break above trendline resistance, as well as the bullish market structure break above 1058 satoshis on high volume. An entry here with a stop-loss at 900 satoshis and a target of 1950 satoshis (the local high from April) present a 6:1 reward-to-risk opportunity, unleveraged. Add in some low leverage and you have an opportunity for some very high returns.

And that concludes this week’s Market Outlook. I hope you’ve found some value in the read.

Feel free to leave any comments or questions below.


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.