Article structure notification: the article is divided in three sections. First section is focused on short-term, technical and speculative analysis of the project – this is regularly updated part of the article. Second section is focused on general market and sentiment analysis and third section is focused on the long-term, fundamental analysis and future prediction of the project – this is occasionally updated part of the article.
Mid May update: Technicals
Holochain did good to our forecast of May 18th – it broke the 23 sats resistance, flown all up to 29 sats and then corrected to the current 24 sats.
On the 4 hour timeframe, HOT suffered a hefty but also a healthy pullback, as long as the correction finds support on the Fib50, EMA20 and MA200 junction point on the 22 sats height. It seems that it has done so, for now.
Breakdown level for Holochain is at 19 sats, a Fib50 and previous resistance. If it falls below, it could sink to the local bottom of 15 sats again.
Consolidation and sideways for couple of candles in this area would be good for HOT, before it can swoop up again in an effort to break the 30 sats zone.
All moving averages are huddled in a tight space, aligned in a mixed order. The longer MA50 and MA200 are still in bullish trend, but the shorter EMA20 has made bearish cross with both of the 50 and 200 MA.
If we apply Tom DeMark’s TD Sequential indicator on the chart, we see an interesting signal. This indicator serves the purpose of identifying a price point where an uptrend or a downtrend exhausts itself and reverses. TD Sequential indicator consist of two components. TD Setup is the first one and it is a prerequisite for the TD Countdown – the second component.
TD Buy Setup requires at least 9 consecutive closes are lower than the corresponding closes 4 trading days earlier (Close[i] < Close[i − 4]; Index: i ~ Current Bar). HOTBTC is on the 5th close and essentially has 4 more before the trend reaches an inflection point. It will either reverse or, in case of a rampaging bull run, continue with the second part of TD Sequential – TD Countdown that would mean additional 13 candles that count the number of days in which the close is lower than the low 2 days earlier (Close[i] < Low[i − 2]; Index: i ~ Current Bar).
So, judging by this indicator, we have still some time to go (4 days) before we reach the top of the current trend.
One thing to bear in mind is the turbulent and erratic nature of bitcoin – a sudden thrust up or slide down is always on the cards which would invalidate this and all other analysis and predictions. In such cases, market is shaken up with most traders exiting altcoins and entering bitcoin positions or seeking shelter in stablecoins, especially in the initial phases of bitcoin pumps and dumps. So it is always a good idea to keep a close eye on bitcoin’s behaviour before opening a long or a short on any other coin in the market.
Should this happen, stop by again to check out our updated charts and thoughts.
Trading volume is relatively low – reported volume in the last 24hrs is $12.7m (the strongest volume day in April for HOT was April 18th with $26.5m) and “Real 10” (trading volume on the exchanges that provably prevent wash trading) volume is 5.4x lower – $2.3m. This means that HOT liquidity is only moderately inflated and its trading volume is overstated by 3x which is comparatively great ratio.
On the other side, HOT has a strong buy support, according to coinmarketbook.cc. Buy support is measuring sum of buy orders at 10% distance from the highest bid price. This way we can eliminate fake buy walls and whale manipulation and see the real interest of the market in a certain coin. In the last 24 hours, HOT had a $1.8m of buy orders measured with this method, which sets HOT buy support/market cap ratio at 1.05%, a wide-market above average value. Bitcoin and Ethereum had a 0.27% and 0.28% ratios, respectively. This novel metric indicates there are a lot of manipulations, inflated liquidity and fake orders on all crypto trading pairs, including HOT pairs.
Mid May Update: Fundamentals
To assess fundamental health of a project, we used the FCAS metric. FCAS is a comparative metric whose score is derived from the interactivity between primary project lifecycle fundamentals: User Activity, Developer Behavior, and Market Maturity.
There are a few sub components which provide data to each fundamental:
User Activity is comprised of Project Utilization and Network Activity
Developer Behavior is comprised of Code Changes, Code Improvement and Community Involvement
Market Maturity is comprised of Liquidity and Market Risk. Market Maturity has less than 5% impact on a project’s overall FCAS.
FCAS ratings are on a 0-1000 point scale with a corresponding letter grade. Break points are based on standard deviations in the underlying component distributions.
900 – 1000 is marked as S for superb. 750 – 899 is marked as A for attractive. 650 – 749 is marked as B for basic. 500 – 649 is marked as C for caution. And finally, below 500 is marked as fragile. You can read more about it here.
Holochain has been ranked as the A category – attractive with overall 777 points as of May 3rd. By far the strongest metric that contributed to this great score is developer activity that got 937 points, followed by user activity with 680 and market maturity that had only 229 points.
Below are some of the most important news around the project in the last 30 days.
- Holo host has come out with an updated roadmap that you can see here.
- The team has issued another edition of their medium updates – see more about it here.
- In their regular updates, Holochain covers everything pertinent to the project and ecosystem.
- Most significant news are Holoports that are currently deep in the production line. Everything is now in place for the assemble process of Initial HoloPorts. Holochain team will be receiving the first ones for the internal stages of Closed Alpha Testing very soon.
- As for the technical updates, the focus was largely on cryptography. More and more of the long-term work providing cryptographic support to applications is stable and being incorporated into the official releases. They’ve also started the important work of perfecting performance profiling and tuning.
Below is our long-term forecast where we cover general market movements and sentiment shifts before delving deeper into the specific predictions for HOT.
Holochain is a post-blockchain technology that is energy efficient decentralised app development platform that is truly peer-to-peer without the scalability issues of existing Blockchain projects.
Holochain is like having access to all of the capabilities of all of the Internet apps simultaneously without needing an API, because the languages are entirely compatible. Holochain is the equivalent of having an IFTTT layer built underneath the entire Internet.
Because the information isn’t forced to sit uniquely in each application, the end user can create a customized experience with the parameters of their choosing. The possibilities for data mining and consensus building are endless. End the data-monopolies of Facebook and Google. If we choose to use Holochain, we choose how our information is shared and empower the commons to utilize it for collective growth and understanding. Source
2018 development recap
Cryptobriefing did a great overview of Holochain’s progress on the development front, accenting the release of Alpha 1 but also the missed deadlines on Alpha 2 and 3.
The Alpha 1 product, known as “Scout”, was released on May 26, 2018. The original roadmap in the greenpaper targeted a Q1 release, but was delayed because of the close timing to the close of the ICO in April.
Along with Scout, Holochain also released a p2p Twitter clone known as “Clutter” (the term for a group of Cats). Clutter is in a pre-alpha state, but the release serves to demonstrate both the ease and utility of building hApps. Clutter particularly lends support toward the viability of decentralized social networks built with Holochain.
Since the Alpha 1 release, Holochain have missed their original milestones for the Alpha 2 launch in Q2 and Alpha 3 launch in Q3. Mitigating concern about these missed milestones, Holochain has expanded their team and are still actively recruiting members.
Lack of exchange listings for HOT token could be a problem
Outside of Binance, HOT token is not listed on any major crypto exchange and the lack of such listings brings into question what level of real demand exists for the token. Additionally, trade volume in BTC is exclusively limited to Binance. Pairings with other tokens aside from BTC and ETH remain nearly non-existent, as is BTC trading outside of Binance, where the majority of volume by currency and exchange exists, exposing HOT to the vulnerabilities from trading on one major exchange.
Roadmap rescheduling and current status
Holochain had its ICO delayed and they are essentially late approximately one quarter on their initial roadmap.
- Hard to verify where Holochain are at in terms of Roadmap progress but Q1 2019 has some solid milestones planned. A Beta Release of Holochain is expected and the Team expect a Testnet version of Holo to be running on 30,000 host devices, surpassing both BTC and ETH by end of year.
- Q1 2019 should see further milestones met. Peer-to-Peer applications on Holochain to reach 50 Apps and 10,000 users by end of year. Gmail, Gdoc and other collaboration tools are expected to be available as beta on Holochain
What projects are expected to hit the Holochain in 2019?
There are numerous Holochain projects (hApps or holochain apps) pre-announced, some of the more interesting are:
- Junto.love, a social network
- Core.Network, also a social network
- Producer’s Market, removing intermediaries in the food supply chain
- JustOne Organics, a dehydrated food producer.
- Bridgit browser, “quantum search.”
- ULEX, open source legal system
- Holo-health, ecosystem centered around personal-health records owned by patients themselves
- Comet, agent-centered Reddit alternative
Two important updates in the short-term
Overall, the team spent the past month “laying the groundwork” for two important updates: capabilities-based security as well as “signals”. The signals feature will be “the beating heart” of future Holochain applications, looking to give developers the ability to listen for all sorts of events to which their apps can respond in real time.
“This will make hApps feel as lively and responsive as traditional server-based apps, without the processing and network overhead of our previous prototype — or the glacial pace of blockchain consensus,” explains the blog announcement. Both of these updates are expected to improve overall user experience for future Holochain users. Check out the entire Dev Pulse 9 here.
General Market Movements and Sentiment Shift
The downfall of altcoins that were mainstream media darlings at the start of the last year, HOT among them, can be attributed, in part, to novice investors getting scared off once the bear market kicked in with a vengeance. Every resurgence of bitcoin in recent period, was met with the, for the most part, inability of altcoins to rally with it. Reason for that can be rookie investors learning from their mistakes, while smart money that was previously watching from the sidelines has begun to enter into bitcoin.
These entities weren’t about to buy BTC when it was trading at an all-time high, but they’ll take a look now, having missed the boat the first time around. None of them, it seems, are interested in altcoins however, despite the fact that many are trading at a 5x discount. Institutional investors may be cautious, but they’re not foolish.
Some altcoins will continue to have some speculative value for the foreseeable future. But just like the now infamous tulips, the hysteria will eventually subside. We are already witnessing the first phases of that slide and even though most of the bag holders react emotionally to articles that criticize their coins, I am just observing the developments on the market. You better start emotionally detaching yourself from your “great sounding” coin because if goes nowhere, ideas are worthless without execution and real users that see value in the project.
How to evaluate fundamentals of a crypto project
We should consider crypto valuations like educated gambling, a ‘prediction market’ where we are betting on the odds of project and token success. There are some catalysts of success we can identify:
- Project success drivers (user traction, strong financial bottomline, good treasury management, network effects/synergies between users and token investors)
Real user traction is the most important driver of success, that is what most of holders call “adoption”. If people start using certain crypto project because they find it useful and it makes their life easier, that is a guarantee of success. So far, almost no crypto project can claim to have done so.
Strong financial warchest that will enable teams behind the project to develop their visions, incentivize other developers to join them and start using their product is also a crucial aspect of any project. Tied into it is treasury management – especially for the project that had big ICO proceeds. Temptation to squander all those millions into “conferences and events” (read hard-core partying on yachts and luxury hotels) was massive, especially if we consider that majority of token projects founders were no-names and ordinary employees that worked for a paycheck before the ICO fairy-tale happened to them.
Another adoption indicator – network effects, where every additional user of a good or service adds to the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.
If you can objectively notice that your favorite token project has some of these traits happening for it, be happy – you might have found a winner.
- Token success drivers (favourable demand-supply dynamics, programmable incentives on token, aligned incentives with management team and consensus on token as common unit of value creation).
Token success is completely dependent on tokenomics. As defined by infloat.co, tokenomics involves the incentivization of certain stakeholders to ensure particular behavior.
So, tokenomics is essentially an incentive structure designed to ensure that a token has a purpose and utility within its native network. It is the study of how coins/tokens work within the broader ecosystem that can be considered as a sovereign micro-economy. This includes such things like token distribution as well as how they can be used to incentivize positive behaviour in the network.
For example, bitcoin is designed to ensure that bitcoin miners have a reason to mine new bitcoin. Miners validate bitcoin transactions and receive (or create) newly minted bitcoin in the process.
On the other hand, individuals, businesses and other bitcoin users pay a transaction fee for miners to include their transaction in the next block. This ensures that even when all bitcoin have been minted (to the tune of 21 million, which should happen in around 2140), bitcoin miners are still incentivized to keep ‘mining’ (i.e. validating transactions).
To paraphrase all of the above in the simplest terms: if you, after weeks of research and reading, can’t figure out why the project needs to have a token, it probably doesn’t.
So why does the token exist then?
– To make the project founders rich.
But there are some people on Twitter, Reddit, Telegram claiming otherwise.
-Yes, they are either: paid to do so by those same founders, they are desperate and delusional bad holders or they are just stroking their own ego with newly learned fancy economic terms and jargon.
Needless to say – stay clear of such projects.
HOT token price prediction for 2019
Be wary of anyone that lays claims on predicting exact price for any token. We won’t be playing that game but rather offer a thought framework on what HOT could do in 2019.
HOT, as the rest of the market, is tightly coupled and dependent on bitcoin’s price action. If bitcoin embarks on another bull run, HOT can hope for one as well. Since that is very unlikely, don’t expect much to change for HOT price-wise in this year. However, considering the very low price HOT token currently has, it still is one of the coins on the market that has the biggest upside potential for a 5x or 10x gain, so holding some HOT in your bags is highly recommended.
The main currency in cryptocurrency markets is Bitcoin and given this, altcoins tend to fuel Bitcoin runs and Bitcoin tends to do the same in return. Given this relationship, Bitcoin price movements (or lack thereof) tend to effect altcoin prices.
When Bitcoin goes up swiftly, it will likely:
- Suppress or depress altcoins as money flows into Bitcoin;
- Or, take altcoins along for the ride
In cases when Bitcoin plunges, it will likely:
- Depress altcoins as money flows into fiat;
- Or, cause altcoins to boom as money flows into them, but this is rarely the case.
When Bitcoin moves sideways, it will likely:
- Cause altcoins to mimic that as traders wait for a clear sign on the direction of the market;
- Or, cause altcoins to flourish as traders look for returns in altcoins and try to get favorable trades in terms of BTC pairs.
To summarize, Bitcoin is the focal point of the crypto market in many ways, and with BTC trading pairs on every exchange, the gravity of Bitcoin is hard to evade.
HOT-BTC Price Correlation
The vast majority of trading that occurs in the crypto markets are between BTC and altcoin trading pairs. Since most altcoins do not pair with fiat currencies (and only a few are paired with stable coins like USTD), Bitcoin is the next best option. Therefore, when Bitcoin is stable, it forms as the ideal base currency for buying altcoins (which is why altcoins tend to do well when Bitcoin goes sideways).
Correlation is measured on a scale from -1 to 1. Values above 0 shows the degree to which altcoin is moving in the same direction as BTC prices (either up or down in tandem), and values below 0 shows the degree to which altcoin moves in the opposite direction of BTC prices (so when BTC goes down, altcoin goes up, or vice versa). Values around 0 shows that when BTC price moves, altcoins stays steady, or alternatively that when altcoin moves up or down that the BTC price is staying steady.
Based on the correlation analysis, BTC and HOT have a strong positive relationship. The correlation coefficient of their prices is 0.50, which was calculated based on the previous 100-days’ price dynamics of both currencies.
Market Predictions for Holo Price in 2019
Walletinvestor is a popular website that does technical analysis-based price predictions of various cryptocurrencies and traditionally has a skeptical outlook for most coins, but not so for HOT. According to them, HOT is expected to stay approximately at the same price level as now – seeing it hit $0.0013 by the end of the year.
Trading beasts is usually on a diametrically opposite side of Walletinvestor and sees a much more bullish future for majority of tokens, but HOT is an exception. Their algo forecasts that HOT can descend to around $0.0005 (drop of almost 50%) within a year.
Another crypto prediction algorithm that is most conservative in its approach of the ones we enumerated here – DCP usually predicts price to hover around the same level as the current state, forecasting a twofold increase or reduction for most of the coins. HOT is on the bullish side of their algo that sees it reaching $0.002 per coin by December 2019.
Holochain remains one of the most innovative and radical approaches to the decentralized future and as such is exposed to the biggest upside but also biggest risk of a extinction. 2019 will be extremely important for the Holochain team to deliver solid chunks of the promised technology and to snatch an enterprise level partnership that would take the project to the edge of mainstream adoption.
Failing to do so could see Holochain land in the basket of forgotten projects.
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