The third largest Crypto ETH is about to go to first place
Cryptocurrency

Crypto Price Analysis For 2018: Why Bitcoin (BTC) Stays Put, Ripple (XRP) Will Collapse & Ethereum (ETH) Lands On Moon

When you strip away the market manipulation of recent weeks, XRP is no match for ETH's steadier climb.

How do you spot whether a Crypto is being manipulated versus whether it’s having a really good run-up on the back of solid fundamentals? Furthermore, how can you spot a Crypto that is about to make big moves?

The answers to these questions are something of the Holy Grail in Blockchain, a place occupied by about 10% core devs like myself and where the others are mostly these days just day-traders and middle-managers chancing their luck on another wallet app.

As holy as these answers may be, finding them is comparatively easy. Today I am going to walk you through a very simple exercise using the Top 3 Cryptos – which is to say Bitcoin, Ripple and Ethereum – to show you what a steady climber, a manipulated price and a price that is about to soar upwards looks like.

Bitcoin (BTC)

Let’s use the standard variable to start with; that is the steady climber. This is Bitcoin.

Bitcoin over the December 2017 period; Source: CoinMarketCap.com

One of the ways we can best tell whether something out of the ordinary is going on is to compare the volume/market cap data and see if there’s any unusually high spikes in volume relative to the increase in price. A solid increase in price should not be accompanied by an extraordinary sustained increase in the volume/market cap data, since the price increase should be offset by the volumes achieved to get it there.

As you can see from the excel data which I obtained from CoinMarketCap, there is nothing really out of the ordinary here at all volume/market cap-to-price-wise. After a big run-up throughout late last year, Bitcoin’s price seems to have steadied quite a bit.

I’ve used a standard deviation calculation (STDEV function in excel) to determine whether there really is anything out the norm going on as well. A low standard deviation (that’s the amount the day-to-day volume/market cap data varies from each day) of 1.3%, with a 55%-45% share of up/down (volume/market cap versus average) days is nothing to write home about.

Bitcoin is an incumbent Top 3 Crypto and we can be pretty sure that is where it will remain.

Ripple (XRP)

Now let’s take a look at our new Top 2 Crypto, XRP:

Ripple over the December 2017 period; Source: CoinMarketCap.com

Sorry to say this to all those XRP hopefuls out there, but this is market manipulation 101, guys. First, take a look at the Quarter Pounder sized standard deviation I have circled first. Every single day, Ripple’s volume/market cap ratio differs on average by roughly 200% from the day before. Compare that to Bitcoin’s differentiation and that is a whole 100x away from a standard Crypto event. So while there may have been a 1000% increase in the Ripple price, the daily volume relative to that price has varied by another 10x that amount.

You only gotta wonder, who’s shoving the money under this rug right now to push XRP into second place? Second thing to notice here is that the number of days where the volume/market cap was above the average compared to below the average is actually lower than Bitcoin’s. That means on the days when the price was pushed with extra cash juicing up the game for Ripple, they really went at it hammer-and-tong. My guess is that there is a giant dump ahead, and lots of tiny investors are gonna be ruined for another year’s worth of Crypto trading. Personally, I hate Crypto like this, and I would want it banned if I wasn’t such an ardent decentralist at heart.

Oh well, where there is money there will always be filthy bull%$£*ers un-making great stuff others have sweat blood and tears making, I guess.

Ether (ETH)

In every cloud there’s a silver lining, and so it is with ETH.

Ethereum is the real deal. That was the main reason I agreed to join the Futereum Foundation project (the ed. is going to kill me for putting that, but it’s a fact).

Let’s look at Ethereum, currently the world’s third largest Crypto and soon to be the world’s largest by far:

Ripple over the December 2017 period; Source: CoinMarketCap.com

Here you can see that since the start of December, ETH has had a spectacular run up to 2018, soaring just shy of 100% in value. As a result, the number of days that the volume/market cap ratio of the digital currency is up is about 20% over the standard, falling in at 66% which I have circled again here.

What’s notable however is this increase in price is not accompanied by some sort of pump-and-dump game by big banks, but is remarkably steady. The average daily volume/market cap ratio is 3.6%, while the low end comes in at about 4% and the upper end is around 4.25%. What this means is that ETH is trading its own book without any outside help and still it’s climbing 2x over where it was at the start of the month. This is the same thing exactly that happened with Bitcoin at the start of 2017.

The Wise Man Calculates First

The takeaway here is I guess that you should always think before getting a FOMO reaction worked up like an LBGT such I am used to get worked up at a forthcoming release of a Scissor Sister’s release. Use data when you trade. Devs are probably more sophisticated with this sort of analysis than most to be fair, because we spend our whole lives absorbed in the detail of datametrics, but that doesn’t mean anyone isn’t capable of performing these simple calculations, no software required.

Be wise and calculate before you trade.

Editor’s Note: Emily Bianchi is a member of the Futereum Foundation Board of Directors

About the author

Emily Bianchi

Emily Bianchi

Emily is Chief Technology Advisor to the Futereum Foundation. She is one of the world’s first female Blockchain devs, and has written critical code for 3 of the first 50 Cryptos in circulation today. She is a C++ programmer who often feels that Crypto is moving too far away from core development and a sufficiently tech focus. To Emily, life is one great puzzle, full of interesting solutions and never-ending possibilities to problem-solving techniques that she likes to spend four nights up figuring out before collapsing in bed. She is a graduate of Occidental University in Los Angeles, CA. Officially she still lives in California but she only really spends about half of the year there. Feel free to hit her up if you’re in the area though – she loves a strong drink and serious debate!

29 Comments

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  • Please list your investments.

    In a purely speculative market that can be based on one big news release I find your analysis totally bias.

  • What happens if XRP is added to Coinbase, the entry point for newbies? They only understand affordability (not decimals) and XRP would be the most affordable. I have reached out Brian multiple times to add mBTC as an option to Coinbase for this reason. Look what affordability did for LTC volume on Coinbase – it outdid BTC!

    One of the few,
    Bitcoin and Ripple fanboys 😉

  • Hi TomB – I am always so astounded by people who say “show me the facts! You might be biased!” when in fact what you are displaying to them are the facts (in software development this happens the whole time too!) I have a lot of Crypto – maybe 50 coins in total, including ETH and BTC and XRP (I would be selling my XRP except I would feel too guilty about participating in the inevitable dump up ahead, so I sold about 20% of it as it was moving up to get some more ETH and save some to get FUTR).

    In terms of your comment that XRP is the cheapest, I think you are sadly mistaken. A coin is not “cheap” if its unit price is the most fractional, but rather if its market cap is the lowest. Ripple, far from being the cheapest Crypto in town right now, is the second most expensive in the world.

    • I am just asking if you are hodling certain coins and if that would effect your judgement. Not trying to make a big deal out of it but thank you for the answer.

      The whole point of me talking about affordability has nothing to do with me not understanding decimals and “cheapeast.” I am referring to the Coinbase audience, which is comprised of mostly newbies, and their incompetence when it comes to owning a “portion” of a coin and how it only takes a simple change of code to move a decimal one way or the other.

      I pointed this out because if XRP is added to coinbase it will be couple dollar price tag next to $200 and up coins. To someone new to the game they tend to lean towards the “cheapest” (despite its not) because they do not understand whether its decimals or they just want to own a whole coin.

      Thanks for the response. 😀

    • You saw it with Litecoin when adoption started picking up on Coinbase, $50 to $400 in no time. Price tag…

      Sorry I keep responding. Didn’t realize your background, I thought you were a random, so I am now actually interested in your thoughts 😀 lol

    • You would feel guilty selling xrp? HAHAHAHA!

      Yes, show is your facts, oh wait, you don’t have any.

      You’re an utter moron. I’ll email spitting on you from my mansion on the moon.

  • Brilliant analysis. Thanks Emily. I was thinking of getting out of some of my ETH and into XRP but I think I’ll leave it now to see what happens!

  • Could it be that somome with a lot of money believes xrp is a good investment? It doesnt necesarily mean they will dump it? You also need to look with the context of the product, its viability? Chance of success? XRP is one of the few cryptos which has tangible returns and solves real problems.

    • It could be but then it wouldn’t happen right over the Holiday period when everyone is sitting at home and reading the news. There also wouldn’t be that other weird coincidence of the Asian banks pushing call options in XRP. If they are pushing call options, that means they know it is headed down but they need to sell the calls first and to do that they need a price increase. Tell me what you think is more plausible: $1.5 billion of speculators a day knowing something we don’t know, or 10 banks conspiring during the largest ever crypto bull market in history – which has no rules either by the way – to trade the shit out of a currency based on nothing other than what may be a bullshit press release from a san Francisco company with 60% premine in order to profit in the run-up and then to profit again from the call options which they get all the premiums for and which suddenly dump and are worthless? Lemme tell you, I know banks and it’s the second scenario. That IS how they make money – it is called “information arbitrage” which basically means insider trading and market manipulation when insider trading and market manipulation is legal. These Wall Street boys are not like you and me. Their ONLY focus is how they make money without taking risk – they don’t care about how much or how little Blockchain develops. To care about it is not their job.

      • Also, someone with inside knowledge doesn’t PUMP the price; they buy off the BID side of the order book. Pumping the price is not how you make money because you pay more for it then which makes your sell price that much harder to obtain. This is classic P&D. Watch.

      • It’s called hedging. Institutions do it to smooth out price volatility based on asset transfer with time delay. You know a bunch of Japanese and Korean banks are undergoing trials with Ripple technology right? So the banks need to do live trials of large scale XRP cross-border transactions. They have to buy the XRP and in doing so, unfortunately push the price up. But to maintain the fiat value of their position, they need to cover the downside risk by selling options. This allows them to accumulate the XRP position they need without worrying about exchange volatility.

        • That’s very interesting – so what you’re saying is that the banks create a major upside opportunity for speculators even as they are hedging out their Beta-positions? Where can a trader buy such a call option?

  • Damn girl – that’s some helluva market timing. You wouldn’t happen to know something we don’t, do ya? Cause that’s more than a little coincidental. It’s like a 6 hour range since you posted this and ETH is back at Number 2! How high you see it going then? Tell us more!!!

  • I think ETH and XRP have great business cases. Your analysis is flawed by the bitcoin unconfirmed transactions backlog which destroys your great Standard Deviation comparison. Would be interested in how Pump and dump works, could you explain it more. Who has hundreds of millions of dollars to buy and sell at the right timing? Sure, huge amount of speculators..but I think this will continue, since many countries take weeks to get an account up and running to be able to trade…I’ve taken 2 weeks to get AUstralia account, and coinbase locked up on identity verification..not anywhere near the number of people who want to buy are able to.!

    • Whoa, steady there cowboy, ’cause maybe you ain’t as smart as you just thought you may ha’ been before you came in ridin’ shotgun!

      First of all, if transaction backlogs were the reason for the standard deviation events, then we would expect to see massively erratic STDEV events, not smooth, near-parallel events that differed from one another by less than 2.5% overall. That is because on certain days as people got them Bitcoins or ETH in their wallets, they’d be trading it. But you will say that is just conjecture, so instead, consider this: for the encouraging standard deviation events to have been caused by tx backlogs you would be looking at days in which ETH was $7k, if it was anywhere near what XRP’s has been. Now let me tell you, darlin’, $700 to $7000 in a 30 day period is straight up market manipulation. You may not like to hear that as you have spent 14 days waiting for your Coinbase account to get up and running so you can snap up ’em Ripples, but these ears I am afraid are donkeys ears. Caveat emptor as the Romans said!

  • Ripple is the only crypto accepted officially by some govts. Japan and South Korea recent announcment on Ripple led the massive rally happen which is still holding above $2.
    Bank of America and Amrican Express has also signed with Ripple. If Visa and Mastercard signs with Ripple you might see XRP in the moon. Ripple partners investors are Standard Chartered Bank, Google Ventures and some other bignames.
    Google Ventures alone can add huge value in coming years.

  • Oh for Christ sake, would you xrp people get your heads out of your asses for a second …? Mastercard, Visa … who gives a shit – that isn’t what Crypto is about in any case. And the girl has clearly – and I mean clearly – got you beaten there David Higgins. It’s so funny how the article isn’t even really that much about XRP (like there are 2 other coins mentioned here) but there’s such a shitstorm of FUD over the fact that Emily called the thing a scam with a 60% Premine – which is fact; it does have a 60% Premine which the owners smugly admit and it’s therefore a scam. Enough about xrp anyway. I am not saying xrp will bust – there’s huge people behind it – I am saying it doesn’t even matter if it does or it doesn’t cause honestly it’s the most boring Crypto thetr is and it’s clearly just a load of bullshit that has nothing to do with Crypto anyway – so, onwards ETH!

  • Hi Emily,

    Novice trader here and happy I found your page because I love your analysis. It is very helpful. Where can I access those daily value sheets that you have listed up there? Powerful stuff.

  • I really do believe that in 2018 we will begin to see a “culling of the herd” and a “break-out” of those blockchain platforms and digital assets that have actual use-cases, solving real problems, and whose technology solutions are able to scale to meet the ever-growing global demands in finance, retail, business, etc. IMHO, the major mining pools that control the overall direction of Bitcoin’s modus operandi has truly done a major disservice to the platform by bucking the financial/banking system. No doubt the blockchain technology that gave rise to Bitcoin has ushered in a whole new industry around digital securities/assets allowing the transfer of digital property/value, such that the transfer is guaranteed to be safe and secure. However, with that being said, there are superior blockchain technologies out there that can do this far better than Bitcoin. Due to scalability issues, expensive fees (more than any bank I’ve ever been affiliated with), and a lack of consensus among miners yielding fork after fork, Bitcoin has created a veil of instability and unpredictability around it, making industries/corporations/retailers, at-large, wary to utilize/accept it as a payment option. The only use-case that I can see is a store of value, but even that begs the question, based upon what? Speculation? Greed? FOMO? What is BTC being valued against to give credence to its existence and value other than from a group of Trump-like individuals who just want to destroy the system without understanding the consequences of such said actions?

    As it stands right now, Bitcoin is nothing more than speculative fluff and puff to me. Unlike XRP that has a defined use-case, which is eliminating the excessive costs associated with the FRICTION (i.e. correspondent banks/fees) in sending cross-border payments. What many Bitcoiners (the group I consider the fringe purists/libertarians) fail to understand is that the PROBLEM (i.e. this FRICTION) that XRP is solving ascribes unto XRP its purpose and therefore its value. When there is no value in something it gives rise to speculative manipulation like this Bitcoin pump-n-dump by individuals in attempts to average down, gain more, etc., only to then exchange/convert it to the very same fiat currency that they all rail against as being corrupt. The hypocrisy here is deafening.

    I believe Bitcoin would have been more readily accepted by the broader financial/banking/regulatory community had there been a more conciliatory partnership to help make improvements to the overall system. This chasm created by Bitcoin, coupled with the lack of network interoperability and scalability, has proven to be major limiting factors to its mainstream adoption. This gave rise to others, like Ripple, who saw the opportunity to strategically place themselves as the antithesis of Bitcoin’s anti-bank stance and technological disadvantages. Instead of following the footsteps of Bitcoin in opposition to the entire banking/financial system, Ripple embraced the role of helping banks/regulators modernize the antiquated financial systems in place around payments of all types (Cross-border, Retail, P2P, B2B, etc.). This show of good-faith, cooperation, and support from Ripple to the broader financial/banking/regulatory community worldwide, will not go unrewarded.

  • Hi Emily, I am a guy who works in finance so your post was interesting to me. Your approach is similar to something we use at the I-bank I work for to spot certain event-driven securities we might otherwise miss. What I’d say is that this is a very cool quantitative analysis but that it might be better applied to ICOs and smaller cryptos than the bigger ones. This would be a wonderful way to see for example if something was really rising that might be $10m-$100m market Cap but maybe not in the bracket you suggested. Certainly this is how we use such equations. Can I suggest (ask?) you to do another one of these with 3 ICOs then? I guarantee it would be eye openingly effective! Cheers!

  • Hahaha Emily don’t be a hater to the best crypto and soon to be the standard xrp.

    It’s by far the best
    Fastest transactions (4sec)
    Cheapest fees(pennies)

    Btc takes days to transact
    Btc highest fees

    Eth same thing
    Don’t be a hater and liar

  • With XRP you should notice after the escrow is when the volume began to spike. After escrow, the “supply” could be mathematically proven. My guess is this is what triggered the increase in interest. You analysis is much to simple, there’s a lot more dimensions to this then looking singularly at volume. I’m bullish on ETH too. Used to have them equal weight in the portfolio but look now and XRP is 10x as much. Regarding that San Francisco company – they have a pretty good use case for XRP, which is something I have yet to see out of any other coin.. Most walk around with anycoin and are pretty much unable to describe the 5W1H — I believe the Ripple people are the first to be able to define and value the possible market. (Xborder currency/FX). Sadly, most people buying probably don’t even understand that there’s 100B xrp’s out there…. all they look at is the $3… but I’ve found that to be the case with most things over the years, people just like to be in the herd trampling over everything trying to get where they think everyone else wants to be.

  • Funny how all these sarcastic voices that were only just too happy to rib you constantly when XRP was a on a tear are nowhere to be found now!

    Thanks Emily this article saved me a lot of money as I actually switched my entire XRP allocation into ETH when you wrote this. I am an extremely grateful reader! 🙂