BTC - Segwit2x - News and Drama! But no Correction Yet?
There appears to be no end to the news and drama surrounding the upcoming Segwit2x fork in November. We have been following this closely as ultimately fundamental changes to bitcoin will effect pricing. Bitcoin Gold has lost 75% of it's value since it was first traded on the futures market. Will Segwit2x follow suit? Currently B2X is trading around $1000. So many holders of Bitcoin are expecting to receive this bonus. Let's do some math. Subtracting $1000 from the current price of BTC' the FMV' is around $4800 (close to it's previous ATH). But let's step back a second. Bitcoin reached $6100+ with the knowledge of the 2 upcoming forks. When BTG' first started trading it was valued around $400. B2X' hit the market around $900. Adding those two with the current price we get the all time high of $6200. If we subtract the 2 coins from this number we get $4900. So let's put the FMV of Bitcoin at $4900.
The futures market has B2X priced in at $1000. Let's subtract that from our current price of $5760. Ok the FMV of BTC' is around $4750. If we add in the current price of BTG' we just sold we are again at $4850-$4900. $4900 is the FMV of BTC' according to these figures.
Support for segwit2x according to coin.dance has slowly dropped from 95% to 83%. According to Charlie Lee support for segwit2x appears to be dwindling even further to around 66% with F2Pool and GBMiners withdrawing support. In addition 3000 miners alledgedly joined slush pool and only 6% of them were signaling support for Segwit2x with 75% supporting the legacy chain. We are getting news over and over that the bitcoin community is rejecting B2x from Japan, south Korea, and Hong Kong (ok I understand it's Charlie Lee). So what does this mean? Well the futures market still shows good support for B2X' and I put more weight into that than news releases. So this is what we need to monitor not the news!
For the time being and until the fork, we can expect BTC' to trade sideways and choppy until the picture becomes more clear and B2X' pricing should help clarify this. So in my opinion it's not a good idea to trade, just hold and monitor B2X, as I will explain further, but let's take a look at the charts as an interesting pattern is forming.
Note the similarities between the August structure and the current structure. Also note that the Fibb retracement from the current run fall in line with critical previous levels. The 0.382 is concurrent with the previous ATH of $4950 and the 0.618 is close to the top of wave 1 in our 5 wave structure and a critical support resistance level. Love it when numbers align so nicely. Most likely few HODL's will be selling their BTC' prior to the fork we can expect a choppy horizontal channel to form similar to the previous one only in a longer time frame. Now why we are not trading BTC'.
Taking a look below we can see that the short futures shot up prior to the fork of BTG'. Of course the release of BTG' removed the money that was already priced into BTC' shorts made a killing. But what's interesting is short action is again accumulating and it is higher than the previous contracts going into BTG'. Is this a signal Segwit2x may not happen? Or is it early positioning for a short trade when the equity is removed after the fork. It's already a crowded trade so it would not be out of the question to see a short squeeze push BTC' up to $6200. This is why I consider it not tradeable. Going short into a crowded trade could be disastrous if we get a short squeeze. Yes larger institutions are seeing this pattern in a thin market (everyone wants their bonus) and if they see an opportunity they will push through the stops at around $6000. But any news or issues with B2x, could hasten the correction and the bottom could fall out. Bottom line YOUR GAMBLING HERE TRADING PERIOD!
But regardless after the fork or if something happens with B2X I am confident we will get a long awaited correction and the path will be similar to the August correction.
The futures market has B2X priced in at $1000. Let's subtract that from our current price of $5760. Ok the FMV of BTC' is around $4750. If we add in the current price of BTG' we just sold we are again at $4850-$4900. $4900 is the FMV of BTC' according to these figures.
Support for segwit2x according to coin.dance has slowly dropped from 95% to 83%. According to Charlie Lee support for segwit2x appears to be dwindling even further to around 66% with F2Pool and GBMiners withdrawing support. In addition 3000 miners alledgedly joined slush pool and only 6% of them were signaling support for Segwit2x with 75% supporting the legacy chain. We are getting news over and over that the bitcoin community is rejecting B2x from Japan, south Korea, and Hong Kong (ok I understand it's Charlie Lee). So what does this mean? Well the futures market still shows good support for B2X' and I put more weight into that than news releases. So this is what we need to monitor not the news!
For the time being and until the fork, we can expect BTC' to trade sideways and choppy until the picture becomes more clear and B2X' pricing should help clarify this. So in my opinion it's not a good idea to trade, just hold and monitor B2X, as I will explain further, but let's take a look at the charts as an interesting pattern is forming.
Note the similarities between the August structure and the current structure. Also note that the Fibb retracement from the current run fall in line with critical previous levels. The 0.382 is concurrent with the previous ATH of $4950 and the 0.618 is close to the top of wave 1 in our 5 wave structure and a critical support resistance level. Love it when numbers align so nicely. Most likely few HODL's will be selling their BTC' prior to the fork we can expect a choppy horizontal channel to form similar to the previous one only in a longer time frame. Now why we are not trading BTC'.
Taking a look below we can see that the short futures shot up prior to the fork of BTG'. Of course the release of BTG' removed the money that was already priced into BTC' shorts made a killing. But what's interesting is short action is again accumulating and it is higher than the previous contracts going into BTG'. Is this a signal Segwit2x may not happen? Or is it early positioning for a short trade when the equity is removed after the fork. It's already a crowded trade so it would not be out of the question to see a short squeeze push BTC' up to $6200. This is why I consider it not tradeable. Going short into a crowded trade could be disastrous if we get a short squeeze. Yes larger institutions are seeing this pattern in a thin market (everyone wants their bonus) and if they see an opportunity they will push through the stops at around $6000. But any news or issues with B2x, could hasten the correction and the bottom could fall out. Bottom line YOUR GAMBLING HERE TRADING PERIOD!
But regardless after the fork or if something happens with B2X I am confident we will get a long awaited correction and the path will be similar to the August correction.
Komen:
Komen:
I know many are itching to short here as we are breaching the 60 RSI level on the charts, but I caution you. I would recommend reading MarcPmarkets take on BTC shorting here as you will not find another with his experience trading the markets on wallstreet since the 90's. He is truly an experienced professional trader from wallstreet. His bio is second to none!
Komen:
For anyone interested, I will be a guest on the Henry Raines radio show today at noon NY Time. I did ask for permission to post this from a moderator. Will be covering news and events on cryptos.
Komen:
Just an observation how some can be so excited about a pattern and totally miss what is happening around them. Short at $5750-$5800? How is that working out.
Komen:
When I see someone post a head and shoulders, or other patterns, and then have no follow up to the trend formation, I know they are not experienced traders. I have mentioned time and time again, It's not the pattern it's the trend, and the trend was neutral and the large stack at the table just took your money!
Komen:
Many were lucky that there were probably a crap load of sellers above $6000. It spiked to $6077, and though we thought it would trigger stop losses around $6000 fro $6200, it was pretty dam close, and as I said lucky there were sellers there otherwise many would have been crushed!
