- On 20th November announcements were spread about the Bitcoin Futures launch on CBOE and
- Shortly after that, price starts moving up strongly and market cap goes parabolic (big players who plan to go short on BTC when are launched ?)
- After the launch on , we see a huge drop in BTC price (same guys taking profit after they went short on BTC ?)
- On Jan 17th the expired - coincidentally it aligns perfectly with the lowest price for the year - at the same time Bitconnect went belly-up and needs to sell off a mass of BTC
Where are we now ?
Since the low, we have retraced to the previous 13k 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)
- 1.272 extension of the leg initiated on 22nd December (AB leg) - white
- 1.618 extension of the high to the 13k (red)
- Untested level around 8k - the same zone that started the whole move up
- Weekly level around 7.4k (fuchsia)
But why would it go down there ?
Seeing what happened on the day the CBOE 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 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 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 that we have around 13k and it increases BTC price to drop from here.
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 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 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.
This is only the first time we see BTC 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 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 ...
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 ...
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.
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.
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 !
Price started to go down ... but will there be enough selling power to bring it to the 8k zone ? ... Only time will tell :)
I enjoyed the read, and your updates. Thanks for sharing!
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.
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.
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...
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.