BCHUSD Perspective And Levels: Weakness Ahead. No Supports.

BCHUSD Update: Lower highs and lower lows signal further weakness. This market has no bullish structure in place at the moment and no support levels to speak of. In a situation like this I would look at purely psychological levels like 250 or 200 for any potential signs of reversal.

I have not been reading up on the forums about what is going on fundamentally with BCH (the result of the hardfork), but the price action is clear: participants are getting out. At the moment it has no correlation to the price structure and stability of the original BTC market which is holding it's levels.

On it's first day of trading, price action was chaotic with a 300+ point range. It initially found some support at 300, but it has been compromised and will now serve as an additional resistance to watch for.

As far as resistances go this market has put in two levels worth noting. 428 which is the .382 of the bear swing and the 530 to 600 resistance zone (related to .618 of bear swing). In order for this market to prove that consistent buying is present, 428 must be taken out. Otherwise, according to price structure, the bears are in control.

There is also a minor resistance at the 330 level which can be used as an early buy signal for at least a broader retrace back up toward the 430 area. If this level is compromised, it would signal that some strength may be returning and it would be wise to look for a subsequent higher low.

DO NOT BOTTOM FISH. Many less experienced traders are going to see this weakness as an opportunity to buy into the "next bitcoin" really cheap. The problem is at the moment, it is poised to become cheaper. If anything, wait for a solid reversal structure, preferably on a larger time frame like 4 hour before buying this (if you are one of those long term investors). No reversal structure for me means lower prices are ahead.

Remember, you don't have to buy the bottom to be profitable, you need to recognize low risk, high probability setups and they will appear just like they do in every market. Can BCH go to 0? If it is fundamentally flawed and no one adopts it, sure it can. All of these markets can. That's why it is better to be patient and wait for the proper reversal signs, which means you won't get the BEST price, but you dramatically increase your chance of getting in when conditions favor your outcome.

In summary, BCH is clearly weak and is showing no signs of reversing up at the moment. There are no structural supports or reversal patterns. If you are looking to invest, it would be safer in my opinion to wait for the market to stabilize. A break of 428 will signal that strength is returning, and that scenario would prompt me to look for the subsequent retrace off of that up leg as a buying opportunity. So we have some waiting to do. Let's see what happens.

Comments and questions welcome.