Notice that BCHUSD is actually showing a top pattern on the 5 Day chart, even though it could go even much higher from here. But people are taking profit mainly based on the 5 Day peaking at this point.
Came into large bar of 10/23/20 (L=12.87, H=24.50) today's low =13.10. Grayscale issues especially lower volume don't bottom with underlying crypto, they go through a process of premium deflation from NAV before they get going to upside. I suspect today's low is the bottom coming 27 cents above the large bar low of 10/23/20.
pechi123
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It obviously didn't hold, therefore the correction has 1 leg down consisting of 5 sub-waves that was probably done yesterday in the crypto, therefore there should be a leg up that could retrace 78-1.382% of the decline, then another down under today's low probably in the $18 area. Though the underlying crypto made its' low yesterday, the issue here is of low volume, and Grayscale fund that trades at a premium to NAV. I believe that today's low @ $20 sucked out some of the premium, it may be the bottom for the upcoming leg ahead, further downside lies in the $18 range. However the underlying crypto must regain higher levels much above to prove a low is in place.
hanzhao311
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@pechi123, good analysis. If bitcoin should really follow the cycle and this one proves to be a really nasty draw down to the 10,000 - 20,000$ area, BCHG would drop like a rock to single digit.
hanzhao311
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@hanzhao311, the 8 hour chart does seem to be forming a wyckoff distribution like what Bitcoin did.
pechi123
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@hanzhao311, I doubt that your scenario will play out. At this point the bullish case for Bitcoin is growing. As for Bitcoin Cash there was overlap with wave 1 that is a violation of Elliott Wave Principles, the most likely path is an A wave complete at recent lows, B up now in force, then C down thereafter to new lows