Nico.Muselle
Short

BTCUSD - Potential new low on 26th of January ?

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

  • On 20th November announcements were spread about the Bitcoin Futures launch on CBOE and CME
  • Shortly after that, price starts moving up strongly and market cap goes parabolic (big players who plan to go short on BTC when futures are launched ?)
  • After the launch on CME , we see a huge drop in BTC price (same guys taking profit after they went short on BTC Futures ?)
  • On Jan 17th the CME Futures 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 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 ...
Comment: 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 ...
Comment: 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.

Comment: 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...). 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.
Comment: 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 !
Comment:
Comment: 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/disp...

Price started to go down ... but will there be enough selling power to bring it to the 8k zone ? ... Only time will tell :)

Comments

Would it be wise to pull out and re invest on the way down? or wait until it is pushed up?
+6 Reply
@Nernest, I have my orders waiting down there ... it all depends on your risk tolerance and how susceptible you are to FOMO.
Reply
Briljant info!
As you say; they don't want to be low too early. It is here 10:00 am (31 hours before the Futures expire) (europe) and BTC broke a bit down an hour ago. It is now moving sideways at around 11300. If I look at the dip on 22-1 the BTC was at 11300, 31 hours before that dip..
+5 Reply
@Woger, seems they are either waiting a bit longer this time, either they are happy with the current price
Reply
I'm still on the 8k on Friday train!
+4 Reply
nice theory...waiting for the update
+3 Reply
When is the latest this could drop if it in fact gunning for settlement deadilne?
+3 Reply
@Dafinci, the expiry is on 26th 4PM GMT .... so before that time. There's a link to the countdown in my last update to the chart
Reply
Dafinci Nico.Muselle
@Nico.Muselle, Yes, but it takes time for price to move 15-30%. If it doesn't start moving down in next few hours, then the idea is a pass?
Reply
@Dafinci, it takes time ... or high volume (which could also be caused by some news event - creating FUD) ...
Reply
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