BCHUSD possible consolidation before the next jump
Updated
Unfortunately, briefly after I updated my previous post BTC crashed. This has posed a systemic risk in the entire market, and BCH fell extraordinarily hard.
It was this hard, I believe, because many people suffered from long squeeze when their positions from the rally this week became untenable. I myself had to close half to deleverage and reduce risk exposure. I must admit that I was too greedy not to take profit after that much gain.
Needless to say, however, BCH is technically superior to BTC and enjoys some advantage by association compared to many alts. This ensures that the long-term value of BCH is relatively safe.
Considering this, I think a very likely scenarios would be that BCH consolidates before further gains. Why? Because this crash has spread enough FUD to depress the market. Many people have lots of paper gains from the rally that they may want to materialize. On the other hand, there's strong community support, and I believe the insane drops below $2000 were results of liquidation & stop losses positively feed back to each other. It doesn't mean the market believes a that level is legitimate.
On the chart, we can see that on 29 Oct the weekly EMA crossed the monthly EMA and another cross hasn't occurred. Therefore, BCH is still bullish in the long-term. The price touched below the monthly EMA three times between late Nov and early Dec and found support. The most likely scenario is that this time the support is solid.
I believe the mid-term trendline (thick green) could provide some support, while the .618 level ($2950 circa) of the last rally some resistance. If this is confirmed, we may have an ascending triangle before the next breakout.
Nevertheless, there's systemic risk posed by bitcoin. It's currently unusable, and next week there'll be another fork coming. These are risks we must consider before deciding on a trade. I think it's better not to use margin at this point.
It was this hard, I believe, because many people suffered from long squeeze when their positions from the rally this week became untenable. I myself had to close half to deleverage and reduce risk exposure. I must admit that I was too greedy not to take profit after that much gain.
Needless to say, however, BCH is technically superior to BTC and enjoys some advantage by association compared to many alts. This ensures that the long-term value of BCH is relatively safe.
Considering this, I think a very likely scenarios would be that BCH consolidates before further gains. Why? Because this crash has spread enough FUD to depress the market. Many people have lots of paper gains from the rally that they may want to materialize. On the other hand, there's strong community support, and I believe the insane drops below $2000 were results of liquidation & stop losses positively feed back to each other. It doesn't mean the market believes a that level is legitimate.
On the chart, we can see that on 29 Oct the weekly EMA crossed the monthly EMA and another cross hasn't occurred. Therefore, BCH is still bullish in the long-term. The price touched below the monthly EMA three times between late Nov and early Dec and found support. The most likely scenario is that this time the support is solid.
I believe the mid-term trendline (thick green) could provide some support, while the .618 level ($2950 circa) of the last rally some resistance. If this is confirmed, we may have an ascending triangle before the next breakout.
Nevertheless, there's systemic risk posed by bitcoin. It's currently unusable, and next week there'll be another fork coming. These are risks we must consider before deciding on a trade. I think it's better not to use margin at this point.
Note
This is my view on the systemic risk bitcoin poses:
Note
wow, people are apparently more bullish than I was. not bad.Note
Appears to be still in the zone. I wonder if there's enough support if btc crashes, I think in 3 days (after another failed fork).Note
BCH has indeed stayed in this zone, which is not a bad thing. I think there's a good chance it'll break out by Friday w/ 5k target.Note
Update: I think volume needs to pick up from here for any meaningful breakout.On the flip side, watch out if the daily EMA crosses the weekly EMA WHILE we break down the support.
tradingview.com/chart/roSzpx7i/
Note
Critical test on the support coming up.As I'm increasingly convinced that BTC will keep falling, it's interesting to see whether bch will hold. If not, I may consider exiting. We'll know in two days.
Note
It appears that BCH is even weaker than bitcoin. Time to bail. It's not going to 5k anytime soon.Note
Almost game over.
Note
Seems to be incapable of breaking above the old support. I guess in the best-case scenario, if bitcoin goes to 20k bch can go to 3k.Note
Why is BCH pumping like crazy? Is it because I sold half?Note
Should have sold the other half when it was pumping. Regrets.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.