As we approach the upcoming 2 forks we want to monitor how this may have an effect on the market if we are traders. Most Investors have or will pull their money into the Bitcoin core version wallet prior to this, as recommended by bitcoin and other experts. But as a trader what can we expect?
Segwit was created to free up space on the block chain allowing faster processing times and allows for more transactions to be processed. In lieu of 1MB' of transactions in 10 minutes 4 MB' can be processed in 10 minutes. This allows for more transactions and gets rid of the back log which is why it had a lot of community support I believe 95%. I am not as tech savy as many of you are so feel free to correct. But I believe this is the jest of it and hence the creation of BCH'. Obviously BCH' didn't run like BTC' after the fork that tells you something. But for all intensive purposes you received free coins which still hold a good value today. But accessing these coins quickly is important as explained further down.
This tells us that BTC' is the gold standard of cryptos and will probably always be. This is why it makes up 25% (now more) of my core holdings.
So what about segwitt2 and how will this be accepted but more importantly how will this impact the market?
Since the block chain size has already been addressed in BCH' I'm not sure this will be the same magnitude and most likely insignificant. But what we learned through the first fork is that leaving your money on an exchange may not only pose the issue of what chain you may own after the split, but a delay in getting your new coins. Lack of liquidity. Many will want to dump fast and for good reason. Dumping BCH' shortly after the fork and putting into BTC' resulted in a 100% profit in less than a month. In order to get access fast most will put their coins into the bitcoin core wallet. The Liquidity issue! I'm speaking of altcoins that cannot trade directly in USD.
There are 3 currencies that trade directly in USD on coinbase. ETH' LTC' and BTC'. This exchange is insured! Key point for those who have 6 digits tied up into cryptos. Note the last 5 days the percentage gains of the big 3. BTC up 20% (I want my altcoin), ETH up 15%, we are forking there as well, but LTC is up 26% as we speak. It's quickly converted to USD' unlike DASH' and ZEC' which trade in tether (at least on my exchange). Not sure I'm holding tether through this. The rest of the alt-coin market is mixed such as OMG' NEO' are flat or down. See a pattern market liquidity?
As we approach the fork date I believe more and more people will likely pull their bitcoin from non-regulated exchanges causing liquidity in the market as a whole as most of the trading is done in BTC'. Do you see an issue? Maybe, maybe not, but very likely the liquidity issue will lead to large swings and I'm not chancing trading during this time as BTC' is 50% of the market.
I'm not telling you what to do, I'm just simply making a case of why I am battening down the hatches, and staying away from the markets until the storm blows over. I'm fine with the big 3 here, but other alts? NOT! Thin markets are dangerous markets especially with stop losses and margin trading. (i'm not selling core holdings to be clear)
So we could possibly see another leg up in BTC' ETH' and LTC' prior to the forks. We could also see alt-coins continue to decline. I am definitely NOT swing trading any alt-coins from now until the fork! Why risk it? I know if my money is in the big 3 off the exchanges I am best protected, and many others are thinking the same. Maybe a few day trades, but I want in and out and out entirely 3-4 days before the fork!
I hope to get some input from you that have been in the market longer than I and your insight.
What do you exactly mean by that you want in and out and out entirely 3-4 days before the fork? Do you mean that you are selling your core here? And are you referring to the first fork?
The way I see it for now:
1. People want bitcoin gold, this will drive the BTC price up the before the first fork October 25th.
2. To ensure they get free Bitcoin Gold, people will move their BTC to private wallets (no reason to move LTC or ETH from coinbase and etc.
2. After the first fork (Bitcoin gold) , I believe people will start trading those extra free coins for BTC and move up the price of BTC. So the price will still continue to go up the first days after the fork October 25th.
3. Then I believe people will move BTC back to Coinbase so they can be ready to sell. Is this where we see a deep correction for a week maybe?
4. In addition we have then another fork called segwit which is unclear to me right now. But maybe this segwit2x fork will be used as a reason for a correction?
You raise a good point regarding people using their Bitcoin Gold to buy BTC. There will be a lot of FUD surronding Bitcoin Gold and BTC is the only coin you can trade it for. I am new to trading but this could hold or drive the price of Bitcoin up for a few days after before a potential crash? This is something I didn't take into account before.@goldbug1 What do you think? Great article btw, thank you.
goetterhammer
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@Nick2ooo, is there any update on bitcoin gold yet i have not heard of? as far as i know this thing is a piece of shit: main code is not completed, the date cannot be taken serious regarding the development status, no exchange i know has made a statement about bitcoin gold yet so it might only be tradable in peer to peer markets, no replay protection or any other safety measurement and so on. s2x is a serious issue which has to be monitored but bitcoin gold is nothing more then a rumor with one developer.
ill87
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@Nick2ooo, take a look at what happened during BTC/BCH fork. BTCG is a silly scam of an old ICO being represented as a fork. It doesn't have 1/10th the legitimacy of BCH. Dump it fast and keep your eyes on BTC.
Nick2ooo
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@ill87, I agree that there is a lot of uncertainty surrounding Bitcoin Gold and believe the majority of people will look to sell straight away. My point is will this keep the price of Bitcoin from dropping? If you have a large number of Bitcoin Gold holders desperately trying to sell off their Bitcoin Gold for Bitcoin, will this counter the number of people looking to sell their Bitcoin for cash or alts after the fork?
Miru84
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@Nick2ooo, good question. But the world is big! What will the majority do? No matter what, I believe there will be a huge correction in Nobember. Maybe before Segwit2x or after, I am not sure. I believe we might reach 6700 - 7000 USD then a deep correction.
majic92
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@Nick2ooo, @Nick2ooo, be careful 2x isn't just fork but an attack against btc, i dont understand this market, do you will bought an i-phone if the counterfeiting risk can take controle of market with for exemple u-phone ??
Miru84
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@Nick2ooo, I can also add that people will probably be a little bitt scared trying to sell their BTG and BTC 5 - 10 days after the fork October 25th due to all the speculations. This will maybe also drive the price up since we will have few sellers. After that maybe a correction before the segwit2x or after the segwit2x. This is where I have no clue. There are so many who are against both forks, especially segwit2x fork which is happening mid November.
goldbug1
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@Miru84, I don't want my money out of coins, just off exchanges and in personal wallets. That's what I meant. Exchanges are not insured so why risk a FUD happening and losing what I have.
Agree with the rest of your thoughts but coinbase you may be waiting a week or more to get your other coin. So I think people go to personal wallets.
Silver-Collector
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One thing I am watching out for is how low Litecoin will drop if EVERYBODY cashes out and buys Bitcoin for the free money, probably be able to pick up CHEAP!!! Don't know which would be the better deal, 25% Free money or Litecoin (or any alts) at 95% discount.
The way I see it for now:
1. People want bitcoin gold, this will drive the BTC price up the before the first fork October 25th.
2. To ensure they get free Bitcoin Gold, people will move their BTC to private wallets (no reason to move LTC or ETH from coinbase and etc.
2. After the first fork (Bitcoin gold) , I believe people will start trading those extra free coins for BTC and move up the price of BTC. So the price will still continue to go up the first days after the fork October 25th.
3. Then I believe people will move BTC back to Coinbase so they can be ready to sell. Is this where we see a deep correction for a week maybe?
4. In addition we have then another fork called segwit which is unclear to me right now. But maybe this segwit2x fork will be used as a reason for a correction?
Those are my thoughts for now. What you think?