Nico.Muselle
Short

BTCUSD - Potential new low on 26th of January ?

COINBASE:BTCUSD   Bitcoin / Dollar
Alright, hear me out on this theory :


Where are we now ?

Since the low, we have retraced to the previous 13k             support zone which should now serve as resistance (red zone on the chart) - Previous support turns into resistance
If we see resistance here, we could complete all technicals below

Technicals confluence :

  • AB-CD pattern (yellow)
  • Potential Gartley pattern
  • 1.272 extension of the leg initiated on 22nd December (AB leg) - white
  • 1.618 extension of the high to the 13k             support level (red)
  • Untested level around 8k - the same zone that started the whole move up
  • Weekly level around 7.4k (fuchsia)
All the above lign up in the same zone between 7.4k and 8k giving this level a strong potential for reversal

But why would it go down there ?

Seeing what happened on the day the CBOE             Futures expired, we can assume that a lot of the big money is short on BTC             and that they are willing to sell off more BTC             to achieve their goal. Given that the CME is one of the biggest Exchanges and that the contract size is 5 times larger than the CBOE             contracts, together with the fact that we saw the big sell-off on BTC             once the CME futures were launched, I think it's safe to assume they will want to maximize their profit by pushing price lower. Combine that with the previous support/now resistance zone that we have around 13k             and it increases BTC             price to drop from here.

CME Futures Expire on 26th of January - or at least that is when the price for settlement will be fixed and profits/losses are determined. So it's my opinion that on that day we might see a test of the level where is all the confluence of technicals.

Could it go down more ? Absolutely ... But they need to have the BTC             to sell off and drive price down, and given that I think they only started investing when the news about Futures came out (around 8k), I think it's safe to assume that price will not be driven lower than that. If I'm right, we should see a big rally up from this zone and be near or even above the December highs by the time the next Futures contract expires. Why up ? Simply because there is much more profit to be made from the upside than from the downside when we reach that level and secondly, if they would drive price further down faith in crypto could be lost and they certainly don't want to kill a potential cash cow.

DISCLAIMER
This is only the first time we see BTC             Futures in the market, so all the above might be pure coincidence and my prediction might be totally off. I just found it astonishing that the price movement aligned so well with the Futures events. If proven correct, my theory might be very useful in the future.

What do you think will happen ? Please do motivate why you think BTC             will go up or down ...
Kommentar: So we have reached the 13k support area and as expected is has served as resistance and we are going back down ...
Interesting to note is that we have a new potential AB-CD pattern that (if it completes) would bring us down to the target zone (light blue lines). For now everything is still on track for the expected low on 26th.
On the lower time frames we also have a head and shoulders pattern which could take us back down ...
snapshot
Kommentar: After forming a head and shoulders pattern and breaking below the shoulder, we have now set the path to go further down. BTC is moving sideways now which is expected behavior. Remember guys, the target date for the lowest price is Jan 26th so we don't want to push down too fast. After publishing this idea I have seen a lot of momentum gained for the 8k target so probably a lot of buy orders are waiting at that level.
If price is pushed low too fast, due to these waiting buy orders, they won't get the best price on 26th as price will already have bounced up.
Patience is key here ... If you agree with my analysis you might want to get your orders in, especially if you are not able to monitor price all the time.

snapshot
Kommentar: Yesterday we saw a break out below that turned into a fake out. (One could say it was a bear trap). Then we headed higher again to test the previous support which seems to have become resistance now and is holding up nicely. Some spikes on the lower time frames pierced through it (1h and below) but on the 4h and higher the resistance is holding.
As said before, the Futures shorts will want the price to be at the lowest point on Friday 26th (exact time can be seen here : https://coindar.org/en/event/bitcoin-btc-expiration-of-cme-contracts-2264). What we are seeing now is price stalling before the final push down if you ask me ... The timing is crucial and they don't want price to go down too soon as there are a lot of buy orders waiting in the zone.
snapshot
Kommentar: Thank you all for your interest in this publication. It's quite exciting to see the first series of Futures expire and try to find out what will be the impact on the price. In the last couple of days we have mainly seen sideways action in Bitcoin price, as if the market is paralyzed while waiting for the big event.
snapshot

As you can see, the downwards move has not started yet and the question is now if it will still happen. IF it will happen, it will most likely to happen shortly before the expiry time of the Futures contract. Remains the question how much it will move ... I've discussed it with a couple of people here on the platform and read some posts on reddit (Futures are pretty new to me as well) and my conclusion was that there currently are very little contracts still left open and that most probably it would be too costly and take too much BTC to drive the price to 8000. Is that the reason why we have seen the sideways movement, do they just want to keep price at the current level till the expiry or are they going to give it a last try to break below 10k to increase their profit margin. All remains to be seen ...

My advice : keep an eye on the price and if you are looking to go long, don't go in too early. Be patient and see what price does right before/after the expiry. Most probably price will go up after that, loads of people are waiting to enter the market hoping for cheap BTC.

Good luck and happy trading !
Kommentar:
snapshot
Kommentar: As pointed out by @Dafinci (thanks for that !) ... the Futures shorts might have some more time to bring price down according to this information
https://www.cmegroup.com/confluence/display/EPICSANDBOX/Bitcoin

Price started to go down ... but will there be enough selling power to bring it to the 8k zone ? ... Only time will tell :)
New !!!! Crypto High Tops available now on https://unicornllama.com
Do also check our brand-spanking-new Crypto Sports Edition
Well done. The future's expiration idea was certainly one which we all cept an eye on. With hindsight I'd say we have to assume the jury is still out on how much correlation the futures have with the different exchanges and the BTC market as a whole. You would assume these futures, as a derivative, would be hugely important. Somehow there is this part of me that figures BTC may shock us on that front, with regard to some of the dynamics of players with large holdings, and the reluctance of those with so little -- to sell. Its definitely an interesting experiment.

I enjoyed the read, and your updates. Thanks for sharing!
Antworten
any update?
Antworten
Its crazy to me that people sell at these prices. What were they waiting for the past few months? HODL at 18k just so you could sell at 8k? How does that work?
Either way it seems you were right about this one. I hope it doesn't drop this support. I will be buying everything from this point downward.
+1 Antworten
@urketadic, those are things hard to understand for us mortals, but the big money always has a way to hedge for these losses (like Futures, going short on BTC)
+1 Antworten
urketadic Nico.Muselle
@Nico.Muselle, Right now its not looking too bad.
Shorts have been decreasing rapidly https://i.gyazo.com/e691e9d93bbde4841afd6733be1c033e.png
Also in past crashes when we had RSI this low we usually recovered to atleast 0.38 fib from the drop point, so that would now be around 10,500$ now.
Antworten
@urketadic, interesting ... but what if we have not reached the low yet ....
For now my price prediction was pretty accurate ... (apart from the timing and the reasons) .... And from a TA perspective we should see a bounce here ...
Question is, how (ir)rational is this market...
Antworten
my take: albeit CME-BTCF18 does not seem to be big in volume (8kish in BTC w/o hidden), its settlement day is on Tomorrow, 31th Jan 2018, which might serve as a cb/spark for BTC to go further down, BTC, which was already under all support MA-lines for two bars... (well, CBOE-XBT/G8 Last day is 02/14/2018, CME-BTCG18 settlement is on 28 Feb 2018, keep in mind: both low in volume, so might be just a coincidence.)
Antworten
@bricoleurs, on the CME website, this is what the contract stipulates :
35003.A. Final Settlement Price
For a futures contract for a given delivery month, the Final Settlement Price shall be the BRR
published at 4pm London time on the Last Trade Date (Rule 35002.F.).
Trading in expiring futures shall terminate at 4pm London time on the last Friday of the contract
month. If that day is not a business day in both the UK and the US, trading shall terminate on the
preceding day that is a business day for both the UK and the US. Trading shall terminate at 4pm
London time on the Last Trade Date.

Considering this, it means that the Last Trading day was 26th and that the Settlement price was determined on that day ... Unless my English is too limited to understand the contract.
http://www.cmegroup.com/rulebook/CME/IV/350/350.pdf
Antworten
bricoleurs PRO Nico.Muselle
@Nico.Muselle, u r right, the Last Trading day was 26th, the settlement price was determined on that day based on the "CME-Bitcoin-Reference-Rate calculation method" ( http://www.cmegroup.com/trading/files/bitcoin-reference-rate-methodology.pdf ), but the settlement itself is tomorrow, on 31th Jan 2018.
Antworten
@bricoleurs, that's how I see it as well ... so the current price movement should have nothing to do with the CME Jan Futures ... unless some whales misunderstood the whole thing and think settlement price is determined tomorrow.
Antworten
DE Deutsch
EN English
EN English (UK)
EN English (IN)
FR Français
ES Español
IT Italiano
PL Polski
TR Türkçe
RU Русский
PT Português
ID Bahasa Indonesia
MS Bahasa Melayu
TH ภาษาไทย
VI Tiếng Việt
JA 日本語
KO 한국어
ZH 简体中文
ZH 繁體中文
Startseite Aktien-Screener Devisen Signal-Finder Kryptowährung Signal-Finder Wirtschaftskalender So funktioniert es! Chartmerkmale Hausregeln Moderatoren Webseite & Brokerlösungen Widgets Stock Charting Bibliothek Feature-Anfrage Blog & Nachrichten FAQ - Häufige Fragen & Antworten Hilfe & Wiki Twitter
Profil Profileinstellungen Konto und Abrechnung Meine Support Tickets Support kontaktieren Veröffentlichte Ideen Followers Ich folge Private Nachrichten Chat Abmelden