BTC vs BCH Is there a Parity Level on the Charts!
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If you have been following we have not posted but one or two trades in a month. This is because in corrective markets swing trading is dangerous. Day trading is a whole other animal and this takes a special skill and nerves of steel. Of course we all have nerves of steel if you into Cryptos regardless. It's not for the weak hearted. So what do I personally look for in a trade? Well I look for nice consolidation with prior bullish momentum. This requires patience! Many are not patient and like a heroin addict looks for his next fix, new traders look for the next fix and will trade anything. This is why 90% of traders lose 90% of their money in the first 90 days of trading.
I have mentioned before TRADING in corrective markets is a recipe for disaster an many have felt the wrath of the market. Market timing is also a recipe for disaster trying to sell the top or buy the bottom, it seldom happens and those they are good at it are part of liars trading club. We all have those friends. I can tell you over 30 years of investing I have maybe hit the bottom or called the top a handful of times, and that has more to do with statistics I throw enough darts I eventually will hit the bullseye. On the other hand many that trade on emotions often find those tops and bottoms! Unfortunately they are buying the top and selling the bottom!
So looking at the charts of BCH' and BTC' now that the fork has happened I note a few comparisons between the two, and I want to explain the difference in why one is tradeable and the other is not! At least in my opinion.
Now BTC' has been on a bullish tear since the beginning of the year, but every bull market corrects at some point. On the lower right chart I have drawn the trend line of the last leg. Finally BTC' has broken through it. Now pullbacks and throwbacks happen 65% of the time and BTC' is no different. It has retested the trend line. However what was once support is now resistance. This is a bearish sign. Also if we look at the RSI on the lower left you note that we are now trading in the bearish zone. Between 25-60. It failed to breach 60 and until it breaches 80 we are bearish.
BCH' is also correcting and we show in the upper right chart the correction trend line which it has now broken and is consolidating nicely as we would hope for. Does this mean it's going up? NO it just means we are finding stability int he price, However, a breakout of the consolidation box is a highly probable trade setup. It's low risk high reward very often. I know I've been quiet for a few days on this and this is the reason why, I want to see what it does after it breaks the trend line. Consolidation often results in a continuation move. Note the RSI is trading between 40-80 which is Bullish.
Ok Goldy! I could easily draw that same upward trend line on BCH' and by your own statement we have broken it so why is this different then BTC'? This is the difference. BCH' had been consolidating around $300 for a month and broke out to the upside. This is normally the beginning of a bull market move. Where BTC' has been on a tear since 2015 and the wave count states we should be topping. So one is moving out of a consolidation and the other has been moving for 2 years now. As much as we want to BELIEVE BTC' will continue onwards to 10k (and it could) from experience markets always correct. I betting on the car with fresh tires!
Here is the irony. The 1.618 extension of BCH is $3945 and the 0.5 correction for BTC' is $3963. The Parity Level! This is how nature and markets work. Now does it happen? Who knows my crystal ball is still in the shop. I will be looking to add a trading position to BCH' on a breakout, and patiently waiting for BTC' to find direction. This is where patience and steel nerves pays off. This is also why it's important to understand Elliott wave and how markets cycle. I AM NOT RECOMMENDING SELLING BTC' FOR THE RECORD!!!
I have mentioned before TRADING in corrective markets is a recipe for disaster an many have felt the wrath of the market. Market timing is also a recipe for disaster trying to sell the top or buy the bottom, it seldom happens and those they are good at it are part of liars trading club. We all have those friends. I can tell you over 30 years of investing I have maybe hit the bottom or called the top a handful of times, and that has more to do with statistics I throw enough darts I eventually will hit the bullseye. On the other hand many that trade on emotions often find those tops and bottoms! Unfortunately they are buying the top and selling the bottom!
So looking at the charts of BCH' and BTC' now that the fork has happened I note a few comparisons between the two, and I want to explain the difference in why one is tradeable and the other is not! At least in my opinion.
Now BTC' has been on a bullish tear since the beginning of the year, but every bull market corrects at some point. On the lower right chart I have drawn the trend line of the last leg. Finally BTC' has broken through it. Now pullbacks and throwbacks happen 65% of the time and BTC' is no different. It has retested the trend line. However what was once support is now resistance. This is a bearish sign. Also if we look at the RSI on the lower left you note that we are now trading in the bearish zone. Between 25-60. It failed to breach 60 and until it breaches 80 we are bearish.
BCH' is also correcting and we show in the upper right chart the correction trend line which it has now broken and is consolidating nicely as we would hope for. Does this mean it's going up? NO it just means we are finding stability int he price, However, a breakout of the consolidation box is a highly probable trade setup. It's low risk high reward very often. I know I've been quiet for a few days on this and this is the reason why, I want to see what it does after it breaks the trend line. Consolidation often results in a continuation move. Note the RSI is trading between 40-80 which is Bullish.
Ok Goldy! I could easily draw that same upward trend line on BCH' and by your own statement we have broken it so why is this different then BTC'? This is the difference. BCH' had been consolidating around $300 for a month and broke out to the upside. This is normally the beginning of a bull market move. Where BTC' has been on a tear since 2015 and the wave count states we should be topping. So one is moving out of a consolidation and the other has been moving for 2 years now. As much as we want to BELIEVE BTC' will continue onwards to 10k (and it could) from experience markets always correct. I betting on the car with fresh tires!
Here is the irony. The 1.618 extension of BCH is $3945 and the 0.5 correction for BTC' is $3963. The Parity Level! This is how nature and markets work. Now does it happen? Who knows my crystal ball is still in the shop. I will be looking to add a trading position to BCH' on a breakout, and patiently waiting for BTC' to find direction. This is where patience and steel nerves pays off. This is also why it's important to understand Elliott wave and how markets cycle. I AM NOT RECOMMENDING SELLING BTC' FOR THE RECORD!!!
Note
Update of some critical levels for BTC as it approaches or completes the B leg of the correction, and the levels that would again send us bullish. For BCH finding tighter consolidation and we have to monitor to see which way we break out. would not be out of the question to see a break to the downside and then a pullback which goes higher looking at the RSI. So do not panic!Note
Many are asking for an update. So here it is. We could either be completing a flat ABC corrective pattern (very common) or we could correct lower to the point of the breakout which is also not uncommon. Keep in mind we are in this at $320 or so and if we never had that spike to $2400 would you still be worried? No!! Also BTC is still on a run, for how long who knows, but we need something to break for BCH to go higher from here. If your nervous, no harm in taking profits off the table. If your looking for entry, then you need to be patient and wait for a breakout. Note
If we did not have that spike and just continued along the linear regression channel we would still be in the top part of the channel. Remember we bought at $300-$320 and the breakout at $475. We are still well in the money and even if you bought BTC at $3000 on the dip you did not make as much money as was made buying BCH at $300 a few weeks ago. I think many people just focus on $ movement and not price movement. ZEC moved 50% not a note, BTC moves $1000 or 15% it's like the run of the century. Anyways BCH is far from dead.Note
sorry let me clarify. some people focus on price movement and not percentage movement. DASH went from $300 to $450 which is a 50% move. ZEC went from $200 to $300 50% move, BCH went from $300 to $900 that's 200% move. BTC goes from $6000 to $8000 which is a 30% move but still not as good as the others!Note
PATIENCE PATIENCE PATIENCE. It's understandable because cryptos move so fast that a few days seems like forever when your coin is doing nothing or consolidating as expected. But markets reward patience. This is the path I am looking for. Now to be clear this is NOT a trade as we do NOT trade whip saws we trade out of consolidation. I cannot emphasize enough if you miss the boat do NOT try and jump on it when it takes off. You could daytrade this but the unknown is BTC. If BTC decides to go higher this will likely have an effect on BCH so unless your in, you are walking thin ice trying to trade here. Note
Note
BCH update chart with counts and target levels. I like we are finding support at a critical level needs to hold and break through the next to confirm bull momentum. else this is just noise.
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