Bitcoin' has defied a corrective move which is overdue by normal theories since it's 2015 bull breakout. I gave up looking for this monster to correct, sometimes you just have to throw in the towel. To boot the last move couldn't be more bullish. The extensions and targets are crazy at this point, but well within reach. $9400-$9600 could be the next level and like I mentioned with OMG' post 9's lead to 10's so $10,000 definitely on the horizon. But it seems everyone is bullish or at least neutral. A month ago most legitimate analysts (ones without rocket ships) were calling for a pullback with meaning. That has not happened and even they have started to become bullish. Well when do we get pullbacks. When everyone is bullish and there are no more buyers. So I added a pullback area as well. With the consolidation channel we should get clear direction one way or the other. What could be a deciding factor? YES the CME' trading Bitcoin' futures!!! So how will this effect the price or should it effect the price of bitcoin'.
Well let's start off with the fact that this is a CASH SETTLED CONTRACT ONLY!!! So what is the difference. Well there is a lot to be honest. If you are buying gold', corn', soy', coffee', or lumber' futures, you are able to take delivery on your contract at expiration. Now there are rules set in place to avoid a situation like where the Hunt Brother's cornered the market, but for jewelry companies, mining companies, food companies, or companies that actually produce or use these commodities, are able to hedge with futures contracts therefore locking in a price before delivery. Many know that Southwest Air made it's mark by hedging gas contracts when gas' went to $115 a barrel providing them an edge over the competition as they locked in their price for gas at a lower rate. Same with cotton' futures, if your Haines underwear and you want to lock in your price for delivery of cotton', you hedge using futures contracts. There are Swaps, speculators, Producers, Merchants, Processors, and institutions trading futures contracts with commodities. However, with Bitcoin' futures you only have speculators.
So unlike the gold' market where producers, merchants and jewelry manufacturer's are hedging or locking in prices it's really legalized gambling on the future price of bitcoin' because unlike the other commodities, it's CASH SETTLEMENT ONLY! YOU CANNOT TAKE DELIVERY. It's like betting with your neighbor on who wins the Michigan vs Ohio State game this weekend. Your bet has no physical effect on the outcome other than psychological. Now in fairness some with large holdings on a run up may use it to hedge vs a downturn, but as we saw with Southwest Air hedging can also be an Achilles heal as gas dipped and it was locked in at a higher price and it cut into profits.
So in the end, though it may have a psychological effect to begin with, it will have no where near the effect on price as futures do in other commodities or forex futures. Yes companies like JNJ' hedge the EUR/USD' to lock in profits. I doubt there will be a lot of that here. So purely psychological.
However, this brings Bitcoin' into the spot light as traders will be able to get in on the side action. It brings cryptos in general to the forefront of legitimacy as long as it continues to trade, and opens the door to enable it to eventually be traded along with others as an ETF. This is where the explosion will be. So this in the end is good for the market, However, betting that it takes us to 20k by the end of the year is another thing.
But in the end this is why you DO NOT SELL your core holdings of Bitcoin'. One announcement could be the difference in $9000 and $50,000!!!
Well let's start off with the fact that this is a CASH SETTLED CONTRACT ONLY!!! So what is the difference. Well there is a lot to be honest. If you are buying gold', corn', soy', coffee', or lumber' futures, you are able to take delivery on your contract at expiration. Now there are rules set in place to avoid a situation like where the Hunt Brother's cornered the market, but for jewelry companies, mining companies, food companies, or companies that actually produce or use these commodities, are able to hedge with futures contracts therefore locking in a price before delivery. Many know that Southwest Air made it's mark by hedging gas contracts when gas' went to $115 a barrel providing them an edge over the competition as they locked in their price for gas at a lower rate. Same with cotton' futures, if your Haines underwear and you want to lock in your price for delivery of cotton', you hedge using futures contracts. There are Swaps, speculators, Producers, Merchants, Processors, and institutions trading futures contracts with commodities. However, with Bitcoin' futures you only have speculators.
So unlike the gold' market where producers, merchants and jewelry manufacturer's are hedging or locking in prices it's really legalized gambling on the future price of bitcoin' because unlike the other commodities, it's CASH SETTLEMENT ONLY! YOU CANNOT TAKE DELIVERY. It's like betting with your neighbor on who wins the Michigan vs Ohio State game this weekend. Your bet has no physical effect on the outcome other than psychological. Now in fairness some with large holdings on a run up may use it to hedge vs a downturn, but as we saw with Southwest Air hedging can also be an Achilles heal as gas dipped and it was locked in at a higher price and it cut into profits.
So in the end, though it may have a psychological effect to begin with, it will have no where near the effect on price as futures do in other commodities or forex futures. Yes companies like JNJ' hedge the EUR/USD' to lock in profits. I doubt there will be a lot of that here. So purely psychological.
However, this brings Bitcoin' into the spot light as traders will be able to get in on the side action. It brings cryptos in general to the forefront of legitimacy as long as it continues to trade, and opens the door to enable it to eventually be traded along with others as an ETF. This is where the explosion will be. So this in the end is good for the market, However, betting that it takes us to 20k by the end of the year is another thing.
But in the end this is why you DO NOT SELL your core holdings of Bitcoin'. One announcement could be the difference in $9000 and $50,000!!!
