Bitcoin Fork Takes a Big Bite as the Market looks for Logic

If you are depending on fundamentals to trade any digital currency you will end up frustrated and broke.  In reality, digital currencies do not have the kind of fundamentals like stocks, and in this early phase of fat tail volatility, you can only depend on technical support and resistance levels to guide you. Anticipating and translating the media cycle news will not help you make money in digital currencies.  Staying with the trend in assets is a proven winning strategy.

I can tell you much of the chatter today about the selloff in Ethereum is related to the Bitcoin fork, now I have zero idea if that should pressure prices lower, but it did, and it spread to all DC ( digital currencies ).  I noted also during this decline that all of the important support levels for DC top 25 are intact.  Let me also say that if you are trading digital currencies from the short side, or day trading them, you are a member of an elite club that is currently the fastest game in town, and you are holding firecrackers in your digital wallets.

The Trend is Your Friend

During trending markets, it is always practical to trade with the trend versus bucking it, so if you are involved in these currencies you will find it more manageable to trade from the long side.  I suggest you watch the next up-move and watch how these DC’s (Ethereum, Litecoin and Dash) have melt ups.  This frenzied buying reflects the trend, and as long as the support levels remain intact ($165 in ETH) the melt ups will continue.

The chatter about the Bitcoin fork is irrelevant, and the movement in DC could have easily been related to Trump Jr releasing his email string to wolving reporters.  If you look at the stock market today as soon as Jr tweeted all assets sold off.  So the Bitcoin fork is just an unnecessary piece of silverware at an epicurean buffet.  You don’t need a fork, just load up the plate, run back to your table, and trade all DC from the long side with the trend.  Pick a digital currency and become an expert, it is important to be a ground floor follower in any asset class.  This way you are super experienced when volatility hits and will allow you to make better decisions; with this comes profit.

Fundamentals on the Sideline?

Fundamentals will have little connection to pricing for the next few years, developing trade-able fundamental metrics related to expected actions is a fool’s journey.  Stop looking at how they made the sausage.  Invest in digital currency as an asset class for the long-term.  Know that stocks like Amazon traded with the trend for a decade, real estate had 1 or 2 blips in the last 20 years, and buying pullbacks in assets is a proven winning strategy.  Over trading is for losers, cocktail chatter about how they make the digital sausage is mind numbing.  Research an asset, have a long-term investing plan, and stick to it.  Stay long any good asset, and it will be what is was intended to be – a long-term investment that will bring you security – not an unnecessary salad fork at your table.

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Steve began his career at the Chicago Mercantile Exchange in 1980 and ran Morgan Stanley Derivative Prop Trading for the firm. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90's. Steve is known as an expert in trading stocks and digital currency and has published thousands of articles and archived video with important market participants related to US Equities, private shares, and crypto currency. He offers a humorous, unique insight related to volatile stocks and the related back stories and drivers. He is a featured speaker on the conference circuit specializing in market volatility, liquidity and emerging market assets.