We survived the Bitcoin fork of August 1st and the total market cap actually increased 11% in one day. What's next?
I personally believe that Bitcoin will go over $3000 within the next 2 weeks, followed by a solid correction.
Here's my theory explained:
On August 2nd, Bitcoin Cash added $6 billion to the total cryptocurrency market cap, from one day to another. The price of Bitcoin Cash was established by a future, and because of its really low volume, it was really easy to push its price to $700. That's an 11% increase in the total cryptocurrency market cap in just a few hours.
What's next? (not a trading suggestion)
The billion dollar question, is now that Bitcoin Cash market cap added $10 to the total cryptocurrency market cap, what's going to happen next?
My theory is that Bitcoin and other altcoins will see new ATH, followed by a solid correction to price pre-bitcoin-cash. Stick with me.
Most Bitcoin Cash is currently sitting in paper wallets, 60% of them are owned by wallet with between 100 and 100,000 BCH, which I assume are either Bitcoin veterans or companies (exchanges, funds, etc). The one between 100,000 and 1,000,000 are Satoshi's cold wallets, don't expect to see any of those BCH or BTC moving anywhere anytime soon.
Most exchanges are opening their Bitcoin Cash wallet as I'm writing. According to my theory, this may cause a coordinated sell-of of Bitcoin Cash, some for cash, but I believe majority for Bitcoin and Altcoin, with a spike in volume and price, and a consequent FOMO and Bitcoin ATH.
If we see a Bitcoin ATH, immediately after we may see a solid correction, remember that $10 billion was just created from thin air! There also may be some FUD for a third Bitcoin fork, caused by Segwit2x.
Influx of cash (not a trading suggestion)
My theory is only based on guesses, but assuming that my theory is correct, it may be a good time to sell BCash and to buy Bitcoin or other Altcoins. Here are my guesses (not a trading advise):
- Bitcoin may reach over $3000
- Litecoin proved to be stable and reliable, also BTC/LTC is down to 0.015, we may see a return to 0.02
- Bitshare/Waves because of the FUD on the centralized exchanges (btce in primis), may see new high.
- Antshare/NEO, ETC, while the SEC ruling ICO affected Ethereum in USA, in China there is no ICO ruling yet, so Antshare (NEO) and ETC may see big gains.
- Ethereum, after slowing its growth because of SEC, various hacks, and cryptocurrency bear, may be ready to start climbing back to $300
- QTum, EOS and other of the latest cryptocurrencies may benefit from the cash influx.
Another way to look at Bitcoin Cash is that was the biggest ICO yet, the tokens were distributed with Proof-Of-Stake 1:1 with Bitcoin. Looking at Bitcoin Cash valuation as an Ethereum's ICO it justifies its valuation but poses a new question: Are ICOs sustainable?
Please share your thoughts and opinions.
I'm not a professional trader and this is not a trading advise! The above are only theories and guesses, based on my personal assumptions. Do your own research and your own trading strategy.
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Federico Ulfo
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