Move over alt market, Bitcoin' Cash has been crushing it lately. As we posted earlier BCH' has blown through resistance level after resistance level only to exhaust at a major resistance zone which was the 400% of the original bullish move and overlapping 100% extension from wave iii, and is now pulling back. The previous bar formed a daily pin-bar and which at this level is a high probable reversal signal, and we have pulled back only to bounce off the 1220 minor support level. So is this simply a dead cat bounce or do we move higher with the power "V" formation?
Overall the market is showing signs of exhaustion and this is where many feel the need to buy as they were anticipating a pullback and jump on board as soon as there is small correction. This often leads to a sudden pop with a lower high, reversal, which results in a lower low where they sell right into the support zone. This is where I am a buyer. Some call this the dead cat bounce, or EW' die-hards call the ABC' corrective pattern. Whatever you want to call it, this is simply the typical herd mentality. No matter how many times it happens, it still seems to happen.
However with extremely strong moves we often see "V" shape corrections as we saw with Bitcoin' from July of last year till the 19,500 high. This is a probability, but with the overall market topping at the same time, this is not a high probability. When Bitcoin' ran from the September low the alt-market lagged which allowed these formations to evolve as traders were focused on Bitcoin'. This is not that same type of market as most alt coins have rallied simultaneous, so more than likely we see a typical ABC corrective pattern into the support zone of 975 to 1090 where we will look for a reversal.
It seems we spend more time being patient then trading. Patience is virtue, impulse is disastrous. We want high quality trades not high quantity. I do like how BCH' rallied off its low and I will be looking to add on a dip into the support zone.
Overall the market is showing signs of exhaustion and this is where many feel the need to buy as they were anticipating a pullback and jump on board as soon as there is small correction. This often leads to a sudden pop with a lower high, reversal, which results in a lower low where they sell right into the support zone. This is where I am a buyer. Some call this the dead cat bounce, or EW' die-hards call the ABC' corrective pattern. Whatever you want to call it, this is simply the typical herd mentality. No matter how many times it happens, it still seems to happen.
However with extremely strong moves we often see "V" shape corrections as we saw with Bitcoin' from July of last year till the 19,500 high. This is a probability, but with the overall market topping at the same time, this is not a high probability. When Bitcoin' ran from the September low the alt-market lagged which allowed these formations to evolve as traders were focused on Bitcoin'. This is not that same type of market as most alt coins have rallied simultaneous, so more than likely we see a typical ABC corrective pattern into the support zone of 975 to 1090 where we will look for a reversal.
It seems we spend more time being patient then trading. Patience is virtue, impulse is disastrous. We want high quality trades not high quantity. I do like how BCH' rallied off its low and I will be looking to add on a dip into the support zone.
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