BTC vs ALT-Coins - Market Liquidity - Supply and Demand

COINBASE:BTCUSD   Bitcoin / Dolar
In the next few weeks we are entering an interesting period where we have two upcoming planned forks. Now the bitcoin gold fork in my opinion is negligible but the segwit2x fork is important. Why is this important, Liquidity, supply and demand .

From the chart you can see the altcoins have diverged from BTC' for the most part. Though the overall market cap has increased 17 billion dollars since the 18th, the alt coin market was only a little over 1 billion. Not only that, though the market is trading near it's all time market cap height, the entire alt-coin market is still down around 17%. So overall one coin has been responsible for the recovery and that is BTC'.

Sometimes we as TA's get caught up in the charts, and do not look at the broader market picture. We focus on them so hard that we ignore other market challenges that may effect the market. Of course we have been following closely the overall market cap and as we approach these two forks we see bitcoin diverging from the majority of altcoins. Now there are several reasons this could be, but I am going to assume it's because of the fork. So how will this effect the market overall going into the fork?

How many of you intend on pulling your BTC' off exchanges and putting them in personal wallets prior to the split? I know I am and have plans to do that today along with my other alt coins or the majority of them. The reason is simple, I want access to my forked coin as soon as possible not waiting weeks or months. In addition there is a liquidity issue that can not be ignored.

Now this is where my theory on why the fork may not happen! Let me explain.

Most altcoins trade in bitcoin for liquidity. Now there are several that trade in USD but most of the trading happens in BTC'. Well as you have seen the last few days alt coins that do not trade in USD are getting destroyed. Even the ones that do have moved lower at the same time BTC' is hitting record highs almost daily. This may be a simple supply and demand issue. If there are a limited amount of coins, and nobody wants to sell because of the fork, then the price moves up to where people go, fork the fork! But there is another issue. As people start to pull their BTC off exchanges going into the fork, coins that alt coin market could continue lower. So be careful, but there is more.

This may create a liquidity issue for exchanges that allow margin trading. Let's go back to 1987 and even 2010 where margins caused a liquidity issue with brokers were those that sold their equities prior to and during the drop did not receive their funds because quite frankly, the brokers were crushed by margin calls and did not have the funds to cover (it's more complex but this is the jest of it). Liquidity dried up and brokers could not credit their accounts until the fed came in and backed them. Margins are borrowed and if the borrower defaults, well your out of luck even if you were not trading. Why? Because these exchanges use other people's coins to margin speculators. (This is why 150 ounces of paper silver trades for every ounce available remember the Hunt's brothers?). Even in the stock market you do not own the shares, the brokerage firm does. Same with coins. Both times the FED stepped in and covered. But with cryptos who will step in?

This is why I caution those that are new to markets in general. It can and has happened, and there is no Uncle Sam to bail you out! This in itself may force the miners to delay or cancel the fork as it could lead to chaos in the markets. Now this sounds like a conspiracy theory, but the exchanges may have the final say in whether the fork happens or not and lord knows the miners nor anyone else wants a melt down regardless.

This does not mean sell everything and go to cash. What this means is insure your money is safe and do not risk what you cannot afford to lose. We may see a delay in the fork because of this.
Guys, looking for advice :) I've mined some coins - ETC mainly.
1) I'm wondering if I should keep coins?
2) Should wait for growth then sell it and put it back on the market in some other more promising coin
3) Sell it now and put money into some other coin?
What do you think? There's many promising projects, ICO
I'm looking at charts and it looks like situation on alt markets is worsening. Prices going down, market cap for alts is going down and BTC share keeps rising... Few rough days awaits us :-)
+1 Balas
goldbug1 Konran_Taisa
@Konran_Taisa, Yes, which is why we have been waiting for the market overall to correct. Thanks
once again @goldbug1 offers us alternative scenario's and information even seasoned investors may not have considered. The crypto world is an entirely different beast to any other financial instrument ever known to man thus far. I've joined a few channels to increase my knowledge because there are just so many variables to consider, most have been completely useless and i am back to trading solo, however @goldbug1 gives me so much insight on the bits and pieces i really need to research and look in to. Thanks again!
+2 Balas
goldbug1 TinaHanlon
@TinaHanlon, Your welcome Tina thanks for commenting.
This is complete garbage theory. People will not move coins out of the exchange for several reasons:
-Exchanges will STOP deposits/withdrawal when the fork is happening and will resume when both chained are deemed stable by them. Could take days to weeks. So if you are smart and want to be able to sell your S2X coins you will not move out of the exchange. On the contrary, you will select an exchange that will do all the S2X/BTC separation garbage for you.
-Separating S2X coins from BTC coin SAFELY are for the very tech savvy, I highly doubt the common BTC investor will know how to do it. Not properly done, it could lead you to lose your BTC. BE EXTREMELY CAREFUL.
-Since BTC deposit/withdrawal will be HALTED globally, if you don't want to miss out opportunity to buy altcoins with your btc, you should have them on the exchange. You dont want to have your BTC LOCKED OUT should the value crash very rapidly.

The advice your are giving here is extremely dangerous for any investor. If you want to stay safe keep your coin on an exchange that supports S2X and BTC.
+2 Balas
goldbug1 dindonsauvage
@dindonsauvage, That's kind of the opposite advice every expert has given, I have seen not one person other than yourself state keep you money on exchanges that are not insured and in wallets that are not yours. I could care less about 2-3 days of trading, I'm more worried about a meltdown.

And meltdowns happen, 2010 we had a bot meltdown in the stock market due to bot trading. There have been numerous ones, but the difference is these exchanges are government insured!!! None of the crypto exchanges are insured. But we all have our opinions, I am just not going to risk it!
+2 Balas
@goldbug1, if you have no plan on selling your BTC no matter what happens then yes you should have them on a coldwallet. If you don't care about optimizing your profit or minimizing your loss then yes you should have them on a coldwallet...

However, if you have strict risk management, and you bought BTC recently, not being able to trade for days is just a recipe for disaster. Besides the opportunity cost can make the difference between making 3x or nothing.

Investors that bought BTC recently have ALL to gain to be able to trade S2X as soon as possible. It is basic ECONOMICS.
Things are going sour ? Nothing stops you to exchange your BTC for an alt and get the fuck out.

I'm speaking from a trading perspective here.

Besides S2X has opt in replay protection, it is not enforced. So please be careful and make sure you know what you are doing.
Bobylly dindonsauvage
@dindonsauvage, from your comment, it seems you don't understand how the coins are stored. It's sad, since you're misguiding (or falsely influencing ) people to take the worst action possible. I'm sure you're not doing it on purpose and really feel bad for you. I could tell you why you're wrong but i'm going to let you figure it out by yourself. Just a question, have you ever heard of cold storage ? or paper wallet ? just asking ...
+2 Balas
Konran_Taisa dindonsauvage
@dindonsauvage, Hmm. I disagree. I mean I've seen BCH fork, I heard what different pepole said back then and what are saying right now - nothing has changed. Most says - get your bitcoin from exchange. Sorry but you're treating people as they were dumb. There are tons of videos on yt, how to prepare to fork, people talkining "don't store coins on exchanges" (not only in this case) Of course exchanges will stop deposits and withdrawals and after fork there will be probably race which one of them will resume faster. I'm not saying ypu are completly wrong, but IMO and what I've seen before. MOST people will move BTC from exchanges to external wallet...
+1 Balas
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