BCH - Breakout - Long and Short Term Projections
Updated
Back on October 17th I first posted about Bitcoin Cash and the reason I was adding it to my core portfolio. At that time it appeared to be consolidating nicely which is my favorite trading method as we have posted many times on the Darvos or consolidation box trading method. At that time we added from our cash position to make it 10% of our long term portfolio. That same day we had a sudden spike of BCH' that we felt was larger investors buying or accumulating BCH' for the long term. On Oct 20th we were looking at adding to either DASH' or BCash and this signal was the reason we chose Bitcoin Cash based on fundamentals and charts. Well our charts were right and we appear to have broken out and may be on our way to ATH's. But not so fast, do NOT run in and buy thinking your going to make a quick buck, your late to the game and we are approaching a critical level around $400 so the risk to reward scenario is not right to trade here. But let's dig deeper into why this breakout may have occurred when the likes of ZEC' and Dash are still, well stuck in a rut!
First of all Bitcoin Cash has the name. Yes Dash' and Zcash are other forks of BTC' but Bitcoin Cash has that ring to it and instant association with bitcoin.
Secondly it's all about micropayments. Yes the median transaction fee for using BTC' is a whopping $2.37 for $635 spent according to bitinfocharts.com . For Dash' a $224 transaction fee comes to about 2 cents. That's more in line with with bartering and trade exchanges. For Litecoin a $257 transaction fee cost you about 1.2 cents. For Bitcoin Cash a $993 transaction costs you about 1.8 cents. Wow that's almost a 1/3 of the cost of Dash' and Litecoin and it's even cheaper then dogecoin!
But why did it wait until recently to take off. Well there was a promise that Bitcoin Gold was going to offer lower fees and faster payments. It is probably fair to say that large investors wanted to see how this played out before deciding one way or the other. But Bitcoin gold has no game plan at least that I can see from their websites just exchanges they are trading on. Big whoop! Many exchanges will not even provide a wallet because they refuse to provide the code. Seriously? what a muff! Secondly Bitcoin Cash already has market penetration and though not as much as DASH' or Litecoin they are accepted by crypto currency payment providers for merchants. This is important. As a restaurant owner I want low fees, and even though it may seem negligible between 2 cents and 6 cents per $1000 of transactions, these fees add up. A 2 million dollar a year business saves about $100 a year on fees. Hey $100 bucks is $100 bucks. Now you may say so what! Well think of how much Home Depot would save where they are doing 100 billion a year in sales. Now it starts to add up. But most importantly Bitcoin gold has yet to add any merchant services and it is unclear what their fees will be. PUNT! and their price is reflective of their mistakes.
So our assumption that large investors were buying up BCH' while many were focused on the fork was probably an accurate assumption, and that is paying off nicely!
So let's take a look. It is safe to say we started a nice EW wave pattern to the upside. It's also very interesting that the Fibb levels correlate with critical support and resistance levels. We have approached the first one around $396. We should see a pullback and around the $340-$350 area. Upon a breakout we should get a nice buying opportunity for the $480 level to complete the first wave of the longer term trend. Very nice R/R here as $300 would is major support so the reward well out weighs the risk by 1/8 or 1/4 if we use a $320 or $300 for a stop loss level. Those are my kind of risks to rewards and one I will be looking to trade. I'm not selling here even though we are above 25% profit, I'm long term. I do not want to risk missing a further run. But I will look for an opportunity to add to the position on any pullback.
First of all Bitcoin Cash has the name. Yes Dash' and Zcash are other forks of BTC' but Bitcoin Cash has that ring to it and instant association with bitcoin.
Secondly it's all about micropayments. Yes the median transaction fee for using BTC' is a whopping $2.37 for $635 spent according to bitinfocharts.com . For Dash' a $224 transaction fee comes to about 2 cents. That's more in line with with bartering and trade exchanges. For Litecoin a $257 transaction fee cost you about 1.2 cents. For Bitcoin Cash a $993 transaction costs you about 1.8 cents. Wow that's almost a 1/3 of the cost of Dash' and Litecoin and it's even cheaper then dogecoin!
But why did it wait until recently to take off. Well there was a promise that Bitcoin Gold was going to offer lower fees and faster payments. It is probably fair to say that large investors wanted to see how this played out before deciding one way or the other. But Bitcoin gold has no game plan at least that I can see from their websites just exchanges they are trading on. Big whoop! Many exchanges will not even provide a wallet because they refuse to provide the code. Seriously? what a muff! Secondly Bitcoin Cash already has market penetration and though not as much as DASH' or Litecoin they are accepted by crypto currency payment providers for merchants. This is important. As a restaurant owner I want low fees, and even though it may seem negligible between 2 cents and 6 cents per $1000 of transactions, these fees add up. A 2 million dollar a year business saves about $100 a year on fees. Hey $100 bucks is $100 bucks. Now you may say so what! Well think of how much Home Depot would save where they are doing 100 billion a year in sales. Now it starts to add up. But most importantly Bitcoin gold has yet to add any merchant services and it is unclear what their fees will be. PUNT! and their price is reflective of their mistakes.
So our assumption that large investors were buying up BCH' while many were focused on the fork was probably an accurate assumption, and that is paying off nicely!
So let's take a look. It is safe to say we started a nice EW wave pattern to the upside. It's also very interesting that the Fibb levels correlate with critical support and resistance levels. We have approached the first one around $396. We should see a pullback and around the $340-$350 area. Upon a breakout we should get a nice buying opportunity for the $480 level to complete the first wave of the longer term trend. Very nice R/R here as $300 would is major support so the reward well out weighs the risk by 1/8 or 1/4 if we use a $320 or $300 for a stop loss level. Those are my kind of risks to rewards and one I will be looking to trade. I'm not selling here even though we are above 25% profit, I'm long term. I do not want to risk missing a further run. But I will look for an opportunity to add to the position on any pullback.
Note
For those interested I will be a guest on the henry raines radio show today at noon NY Time. I did get permission from a moderator to post this.Note
Well that was interesting! Market fundamentals are more important than good chart reading. I did not make my money in the market trading it was picking good quality stocks based on fundamentals and market conditions. This is why you must do both. Nice profit in 2-3 days! Over 50% if you bought when we originally entered.Note
If you do not have BCH in your long term, you may miss out on a great rally! There appears to be a delay in buying BCH after BTC runs which could mean investors are taking profits on BTC and buying up what I consider the REAL BITCOIN!Note
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