BCHUSD Update: Lower highs and lower lows signal further weakness. This market has no bullish structure in place at the moment and no support levels to speak of. In a situation like this I would look at purely psychological levels like 250 or 200 for any potential signs of reversal.
I have not been reading up on the forums about what is going on fundamentally with BCH (the result of the hardfork), but the price action is clear: participants are getting out. At the moment it has no correlation to the price structure and stability of the original BTC market which is holding it's levels.
On it's first day of trading, price action was chaotic with a 300+ point range. It initially found some support at 300, but it has been compromised and will now serve as an additional resistance to watch for.
As far as resistances go this market has put in two levels worth noting. 428 which is the .382 of the bear swing and the 530 to 600 resistance zone (related to .618 of bear swing). In order for this market to prove that consistent buying is present, 428 must be taken out. Otherwise, according to price structure, the bears are in control.
There is also a minor resistance at the 330 level which can be used as an early buy signal for at least a broader retrace back up toward the 430 area. If this level is compromised, it would signal that some strength may be returning and it would be wise to look for a subsequent higher low.
DO NOT BOTTOM FISH. Many less experienced traders are going to see this weakness as an opportunity to buy into the "next bitcoin" really cheap. The problem is at the moment, it is poised to become cheaper. If anything, wait for a solid reversal structure, preferably on a larger time frame like 4 hour before buying this (if you are one of those long term investors). No reversal structure for me means lower prices are ahead.
Remember, you don't have to buy the bottom to be profitable, you need to recognize low risk, high probability setups and they will appear just like they do in every market. Can BCH go to 0? If it is fundamentally flawed and no one adopts it, sure it can. All of these markets can. That's why it is better to be patient and wait for the proper reversal signs, which means you won't get the BEST price, but you dramatically increase your chance of getting in when conditions favor your outcome.
In summary, BCH is clearly weak and is showing no signs of reversing up at the moment. There are no structural supports or reversal patterns. If you are looking to invest, it would be safer in my opinion to wait for the market to stabilize. A break of 428 will signal that strength is returning, and that scenario would prompt me to look for the subsequent retrace off of that up leg as a buying opportunity. So we have some waiting to do. Let's see what happens.
You are a good teacher. You break down the important points and give an understanding of why they are happening and what to look for. Others tend to delve into, what I consider to be, unfathomable and inconsistent technical patterns. Your educational methods are much simpler to comprehend.
MarcPMarkets
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@scottmazzy, thank you. I make every effort to explain my evaluation so that the community can actually use it in their decision making process. I think many analysts don't want to give away their "secret" and attempt to facilitate a dependency of some kind.
mightytrader
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You really think CHina would make BCH just for a single PUMP and DUMP? This thing is GONNA PUMP HARD! I see it going to over $1,000 USD in the coming months. $$$
I don't care anything about this coin except for the gains. $$$ :D
serhan
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Some people don't realize that August 1 fork wasn't the first hardfork for bitcoin. There were bitcoin unlimited and XT long before that. The only difference this time just marketing was better. So the hype. None of those forks survived. The funny thing is that we as for bitcoin holders now holding FREE bitcoin cashes created out of thin air. Once the value reaches anything more than it's current value, we'll be selling like hell decreasing the value even more. Also, Bitcoin cash doesn't solve any scalability limitation, improving the block size to 8 mb is just a quick "postponing" of the current problem. Bitcoin cash will fail, miserably. Sorry but my price prediction is no more than $10 in a few months.
MarcPMarkets
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@serhan, thanks for sharing and informing us that this was not the first hard fork and highlighting the better marketing. There is a lot of confusing and conflicting info out there, especially when it comes to the technological value of these tokens. If BCC does not solve the scaling problem, then your perspective makes sense. All I know is the chart says "sell".
audiocande
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I don't see any reason to buy this coin....therefore....I'll stick with ETH! :)
MarcPMarkets
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@audiocande, yeah hehe good choice. No one seems to see any reason to buy it.
r2d2One
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Two important things:
a) most people who have the coin in their hard wallet can NOT send it to an exchange right now. So if they will be able to send it, the chance is height that a huge sell off will took place.
b) there are still very less new blocks on the new BCC chain.
I think for now it is not possible to get in this market without a huge risk.
MarcPMarkets
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@NickSdot, Good points, but my thing is why buy into it when there are no signs of buying yet? I received an email from Coinbase saying that any BCC is "safe" with them and they will let us trade it in January. Thanks Coinbase.
r2d2One
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@MarcPMarkets, yes sure! The intention of my comment was not to say anyone should buy. Stay as far away as you can.