Huge position switch from bitcoin to bitcoin cash

The question then is where to from here, as the moves have been absolutely breathtaking. Ideally, the trade has been to be long bitcoin cash and short bitcoin as a ‘pair’s trade’. It feels as though this trade still have some juice, and the trick to this strategy is making sure we have exactly the same USD face value (position size multiplied by the price) on both legs, so as not to create a directional bias.

Naturally, the bulk of our flow would have been to speculate on just one instrument.

Importantly, given this volatility it is absolutely imperative to assess and adopt correct position sizing as the crypto space is seeing such huge prices ranges. Placing stops, when one trade using longer-term timeframes (such as daily charts), results in traders having to take on more risk, as their placement of the stop loss is further from entry and again this feed into ones exposure to the instrument. So again if trading these markets one clearly needs to understand adapt to the risk when trading a highly volatile market.

Judging by news flow and sentiment alone, there seems more upside risk to bitcoin cash despite price having already rallied from around $620 to $2087 in four days, and at $1520 (the current price at writing) one questions if this ‘pullback’ now a more compelling entry point. The preference is to wait for the buyers to really support and we see a renewed shift higher from here before putting new money to work. Bitcoin peaked at $7877 and currently sits 25% lower at $5879, although support and buying activity is kicking in after trading down to $5603. Again, whether the shake-out and repositioning into bitcoin cash are over is something we shall watch with great interest.