I heard someone was gonna get forked?
July 31st at 7pm EST, a fork occurred on the bitcoin blockchain expanding blocksize from 1mb. Shortly after at 8am EST August 1st, a hard fork occured and a new coin was born.... several hours later when they finally mined a block.
Bitcoin Cash...
...Is currently down 26% from it's opening price, while bitcoin itself has managed to maintain the current trading range, for now.
As I mentioned yesterday, I decided I won't be posting too much technical analysis on steemit as it is not my place to foment users, but this was a special occasion and a lot of dynamics were going on that made the situation difficult to read. My hope was to shed light on the possible risks and potential alternative plays.
In my view the rush to bitcoin and cold storage was a Lemmings Trade. The main risk in my view was and still is liquidity, with all of the coins being off of the exchanges and locked up in wallets while the blockchain faced a bottleneck, lending rates shot up and the price of bitcoin found itself trapped in a $50 range going into the event.
I still believe the analysis I have done, here, is going to playout and we will take a trip to the 2200's and play the pennant through. During the entire event I remained in bitcoin as well as took positions in Ethereum and Monero (through the evening I played LiteCoin too). I also took the opportunity to lend some BTC at 3.4% for 48 hours while I started to take margin positions with bitcoin in Ethereum and Monero.
For my analysis going into yesterdays 'Forks', Get the Knife a Hard Fork is Upon Us - 7pm EST - Here you can view technical analysis of Bitcoin, Ethereum and Monero.
So it wasn't as bad for Bitcoin as I imagined, but it's not over quite yet. I expect bitcoin to start flooding back to the exchanges and the positions to liquidate in favour of other coins - so we will see how that goes. My first bearish target on BTCUSD is approximately $2536 - the 50 day moving average.
As for Monero and Ethereum, how'd we do?
Ethereum
Ethereum is currently up 17% in relation to bitcoin from yesterdays analysis. Where I noted the basing along a historical trendline. The price or value just started consolidating and will likely do so for the next few hours. After locking in some profits, I still hold a position and will be looking to add if the price can maintain 0.08 ETH/BTC.
Monero
We observed similar in monero, bouncing off a historical trendline that has guided the ascent of XMR. Just the same with Ethereum, after locking in some gains, I will be looking for the price to maintain a range off 0.016-0.0157 XMR/BTC to possbily add to the position.
Nobody ever went broke taking profits.
My personal view is that the rally in Alt Coins is just starting but I warrant caution to those without any experience trading or investing generally. I also speculate that sooner rather than later we will see large cap alts start to run inverse of bitcoin during specific events or over long periods of time as demonstrated to some degree with the Hard Fork.
For fun and with all of the hype surrounding the creation of 'magician coins', Bitcoin Cash, free Lumens , EOS - I designed a t-shirt for @clevercreator which can be purchased at NOT SHAKESPEARE'S SCHOOL
CleverCreator has started an initiative called SteemStarters to help the many artists on steemit gain exposure and potentially profit off of their own art work. I fully support and will contribute however I can!
We don't believe in Hold On For Dear Life - We never chase - We only buy pullbacks - We use strategy - Risk Management and Capital Preservation are primary.
Ensure you understand the risks associated with Using margin and the terms and conditions at your respective exchanges.
I wish everyone luck and I look forward to your comments!
Many people with BTC in cold storage or hardware wallets etc will find it difficult to sell Bitcoin cash coins initially. I think we will see a further decline in bitcoin cash as people access their coins and dump them.
On another note, you mentioned lending your coins, I assume this is to short sellers. Where can you do this?
On certain exchanges you can offer your BTC for loan to margin traders who use it to leverage a long position or take a short position. I use Poloniex. I will never lend through a broker to an individual or business as they can default, where on an exchange the borrower would get stopped out so that you get paid.
The lending rate has actually already sunk as BTC is returning to polo. in 24hours it went from 3% to 0.03% lol ... its still a low risk alternative to put your 'capital' to work.
Thanks. I was hoping you were not going to say Polo as I have had major issues with them and will not use them again. There is something very dodgy about them and I wont risk using them again.
If there is an alternative, I am interested in looking into it though. Ill keep looking. Thanks
do you mind sharing what you find dodgy -- market share speaks for itself. UI is ugly but functionality is there 100 %
They suspend coins for weeks at a time with no notice. They put withdrawals into 'pending approval' state with no explanation for weeks at a time. Customer service never answers tickets. and the list goes on. These things do not lend confidence to the use of the platform. It is not just me that has experienced this, it is many other users. If a real world business operated like this, it would be bankrupt very quickly. I have no idea why anyone would opt to use them (apart from the ability to lend out coins we discussed earlier).
I no longer have any confidence in Polo and have withdrawn all funds and will not use them again.
In all honesty you shouldn't trust any of the exchanges. I stay as liquid and spread out as possible. My view, however, poloniex doesn't want to list what i refer to as shit coins because they impost a great risk to the exchange.
Since the market is new, I doubt there is any insurance. I think poloniex decision to lock certain coins is a form of consumer protection. Market share at poloniex speaks volumes. The most important thing is to stay liquid.
I will never use polo again. As crypto goes more main stream they will be forced to clean up their act or go out of business. At present I have no faith in them as a business. They basically freeze funds with no explanation and refuse to resolve support tickets for weeks at a time! With the losses on crypto exchanges over the last few years I do not trust them. There are several alternatives which offer a much better service so I will give them my business!
I think bitcoin cash will crash as soon as the fork happens, because if many people are given it i think most will sell
Fork did happen and it's down 26% as of right now ;)
wtf? no way
BCH already down to $250 today XD
Thank you for sharing your opinion and analysis with us.
Can you tell me in what altcoins do you invest and why? Thank you in advance.
Everything I do is based off of the charts and market cap. I will not play low market cap alt coins. I do not love any of them, I trade them, they are a vehicle for generating wealth only.
I am a long term holder of BTC, can't imagine selling any time soon.
And much of my BTC is in cold storage (paper wallets). If I pull funds off them years from now, any BCH that might have value at that point will be a bonus.
Its totally a function of style, if you are an investor, your strategy is good, I personally love to trade and I find crypto charts to be very mechanical!