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Bitcoin Cash Vs. Bitcoin
There’s a debate (some would say war) going on between two rival coins. And what better rivalry could there possibly be in crypto, but the one and only BTC being split into two coins, each with a different economic outlook.
One is called Bitcoin, the other Bitcoin Cash… well, there’s a debate as to which coin should be called Bitcoin and… vice versa… or something?
Well, if you’re confused that’s fine. The debate here is not which is the real one.
The debate here is which is stronger, and which is weaker, from a Technical Analysis perspective and in relation to the value of your portfolio. So, leave the arguments at the door and let’s check some vectors.
Space and Time
Johannes Kepler stated, “Where there is matter, there is geometry”. To put it a slightly different way, there are patterns emergent of an underlying structure. Nature, humans, plants, markets, transactions, all display patterns. Like a sunflower and Fibonacci’s Phi. The orientation and cycles of the planets around our Sun. The rise and fall of stock markets, your exercise regime, how many French-fries where sold in Canada last year. The universe dances in its way and, with it, everything else… Before I go too far out there…
Below is a macro view of the 1Day BCHBTC chart. From this we can get our bearings with a wide angle look at the full price-history of this instrument. Note: I’ve ignored the wick high up to ~0.54 to concentrate on the main area of price distribution.
By taking the highs and lows of this range, using a Pitchfork to graph price horizontally, you can see price deviate across the green center-line. The fork’s levels give some great context to volatility and volume. We can see the volume is decreasing and very low compared to 2017. Also, there’s a wedge range which price is consolidating in.
The volume is decreasing and if we expect a move higher from here then we can also expect volume to accompany it. This is of course true for the opposite direction. If a move happens with a significant amount of volume behind it, there’s a very good chance the move will continue further.
Let’s zoom in a little and see what’s happening in the micro-verse
You can see the clean interaction on the 0.168 levels plus the centre line. These mathematical patterns are useful in the macro and micro fields.
So, how to capitalise on this chart? For anyone new to trading, one thing you must make peace with, is that as you perform any analysis, you are looking for evidence to find a likely truth. What does this mean? The more skill and understanding you develop, the more accurate you will be, but you are working with statistics and probability and must prepare for being wrong.
You are looking for evidences like, is there a trend, what is the volume saying, what do other traders think, are there any news events coming up? Your job as a trader is to find the most likely outcome. The more you do this, the more you analyse, journal, test and try your theory, the more valuable your theories will become and the more value you with accrue by your actions.
The 3h BCHBTC chart has some interesting things to say. Price is attempting to cross above the low 0.618 line and into the center channel. The trend-line from the recent high and move down is being tested and this is showing that the down-move may be changing direction (on this time frame). If prices breaks up above the 0.168 line with any significant volume, again, the move should continue higher and the level on the chart can be used as targets for risk-reduction and profit-taking.
Good luck out there, manage your risk well, plan your trades and exit when you’re wrong! Take profit, don’t be greedy, stick to your plan! Research and develop your strategy by reviewing your work, when you are right and when you are wrong.