BTC, BCH, LTC, ETH: Post-Segwit2x Cancellation Technical & Fundamental Analysis
What happened on Wednesday was truly amazing.
In most traditional corporate and financial systems, monetary greed tends to overpower the general consensus of the community they affect.
However, for Bitcoin, this is clearly not the case.
For quite some time, it was overwhelmingly clear that the Bitcoin community had a general consensus against Segwit2x. No one saw the need for another Bitcoin alternative, especially one that provides no significant network upgrade. In fact, many envisioned that the success of Segwit2x would likely cause Bitcoin’s demise; for this would mean that the coordinated actions of a few of the ecosystem’s large and visible players can unilaterally change the rules of the bitcoin protocol, a fact which would render bitcoin’s reputation as a censorship-resistant store of value completely worthless.
In truth, this goes against the very purpose of Bitcoin, which was, from its inception, to do away with the need for participants to delegate this kind of trust and power to any third party.
Fortunately, however, the group of blockchain CEOs that first met behind closed doors to develop Segwit2x announced on Wednesday that they will not go through with the Bitcoin hard fork.
The email below was written and sent by Mike Belshe, CEO of Bitgo and central leader of the Segwit2x project.
What was truly fascinating about this email was that it assured the Bitcoin community that its voice had officially been heard.
“…Although we strongly believe in the need for a larger blocksize, there is somthing we believe is even more important: keeping the community together. Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize uograde at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x.”
Overall, while this was an extremely encouraging and optimistic fundamental factor regarding Bitcoin’s future, technical indicators seem to be claiming otherwise.
Lets take a look.
- BTC/USD
Over the last 2 months, Bitcoin has been on an incredible bull run.
Ever since its last correction, Bitcoin has gone above and beyond in terms of price action — blowing away the expectations of almost every investor and speculator within the crypto space.
In fact, since its major correction, which was primarily due to the ban of Chinese bitcoin exchanges, Bitcoin has regained well over 100% of its value, and even broke through its $100 billion market cap milestone.
However, as the old saying says, “What goes up, must come down.”
Even with optimistic news surrounding Bitcoin, such as the Segwit2x cancellation and CME group future derivatives announcement, it cannot be denied that Bitcoin’s bull trend has been far too extended.
As seen by the chart above, BTC broke through its long-term rising channel with great force, sending its value soaring to an all time high of nearly $7,900.
However, BTC’s all time high hadnt been reached until the Segwit2x cancellation news spread on November 9th.
Ironically, once BTC breached $7,900 upon the good news, it almost immediately crashed thereafter, reaching a substantial low $7,000.
Since then, BTC has corrected to a low of $6,400, and is currently struggling to maintain itself around that price level. Along with this, BTC’s dip below its long-term channel has confirmed an increased possibility of bearish movement within its short-term future.
In addition, the BTC/USD exchange rate is currently resting upon its 21-day moving average — any dip below this point may clear the path for a pull-back toward previous resistance, located near its 50-day moving average around the $5,000 price level.
Moreover, volume indicators such as the relative strength index (RSI) seem substantially over-bought, and have been so for quite some time. The 12-day EMA on the MACD is relatively over-extended as well, and is preparing to cross below the 9-day EMA — further signaling the possibilty of continued bearish momentum moving forward.
2. BCH/USD:
Over the past two weeks, the BCH/USD exchange rate has been gaining quite an astonishing amount of bullish traction.
From a low of $300, Bitcoin Cash has successfully hurdled through all previous resistance levels, and has marked a new all-time high of $1038 — representing a 200% + gain over the last few weeks (a majority of which was experienced today alone).
On a fundamental note, however, there is much to be said regarding the exuberance of BCH’s recent price action.
For quite some time now, it has been known that Bitcoin’s technology is in dire need of an overall upgrade — the networks efficiency is decreasing as adoption continues rising: transaction latency, fees, and block generation times are increasing substantially due to the networks poor 1mb block infrastructure.
Therefore, all heads are beginning to turn toward Bitcoin Cash — Bitcoin’s first and only successful hard fork which actually provided an imperative upgrade: A substantial block-size increase to 8mb.
Because of this, BCH’s transaction fees are significantly lower than BTC’s, and payments occur within a fraction of the time they would normally take on the BTC legacy blockchain.
With that being said, Bitcoin Cash’s recent price pump may actually be a product of legitimate investor and retail adoption, and not an overflow of hype and superficial speculation.
Nonetheless, pushing fundamentals aside, Bitcoin Cash has had a great run up thus far, and may just be due for a cool down. While there have been no major signs of trend exhaustion just yet, if history is of any significant indication, this 200% bull run may just require a sight correction.
Note: If BCH can sustain itself above its 21-day moving average, this may serve as an early signal for another leg up within its bull run. Similarly, if the BCH/USD rate begins to fall below its current point ($940), a pull back closer to its 50-day moving average (around $850) may occur.
3. LTC/USD
Proceeding the Segwit2x suspension news, the entire altcoin market began to feel the love.
As soon as the news was released, investor money that was either in Bitcoin for the upcoming fork or waiting on the sidelines for event clarity was immediately thrown in. Due to this, many of the major altcoins experienced 20%, 30%, and even 40% gains within a single day.
And Litecoin was no exception.
Alongside the rest of the altcoin market, the LTC/USD exchange rate broke well above its 21-, 50-, and 100-day moving averages, sending its value soaring from a low of $53 to nearly $70 — representing over a 20% gain within a 3 day period.
As of today, however, LTC, along the vast majority of altcoins, has shed a majoirty of its recent gains, which may likely be due to investor attention being placed on Bitcoin Cash.
Nonetheless, as shown by its long-term chart, the LTC/USD exchange rate is still maintaining itself quite well, and has not displayed any early signs of continued bearish action within its price trend.
As of right now, the LTC/USD rate is hovering around the $60 price level, which is direcly above its 50-day and 100-day moving averages. If LTC can sustain itself above this point, continued bullish action may become evident. However, on the other hand, if the LTC/USD rate continues to dip below its major moving averages, bearish momentum may be safely expected moving forward.
4. ETH/USD
Despite the recent Ethereum client vulnerability which has locked away over $150 million of user funds, the ETH/USD rate has experienced quite a bit of optimistic price action since the Segwit2x suspension.
From a low of $291.81, the ETH/USD exchange rate soared over 10% on Wednesday, marking a new recent high of almost $330.
As of today however (November 10th), Ethereum has lost most of its recent gains, along with the rest of the altcoin market, and retraced 10% back to previous support around $300.
Nonetheless, Ethereum has remained quite stable since its last correction, and is contuining to follow its long-term price wedge quite well. Therefore, if the ETH/USD rate can maintain itself above its uptrend, it may just see another bull run going into 2018.
Conclusion
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