Bitcoin, The CME And The 20K Target.

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
BTCUSD update: 19891 is the all time high at the moment while a pin bar is currently unfolding on this time frame which is a reversal sign that implies an oncoming short term correction. Will the open of the CME futures take this market to 20K anyway?

First let's talk about the technical situation that is present now. Momentum has been clearly bullish with very limited pullbacks for a month. The recent 5K pullback was met with immediate buying so the pain went away quickly. Right now, if this market retraces, a reasonable level to look for support is the 14450 area which is the .382 of the current bullish structure (measured from the 5400 low). IF price retests this level, it is an area that offers better reward/risk compared to where price is right now since the bullish trend would still be intact.

A decisive break below (anything is possible) can lead to a retest of the 11k to 8650 area which is the .618 zone of the structure measure from 5400. If price retraces this far, it will more likely unfold into a broader consolidation as it builds another base.

These levels provide areas to anticipate for swing trades or position trades on the long side, which is better than jumping in at any random level in terms of risk. All these markets are in a state of euphoria and will return to equilibrium because that is how all markets work, it doesn't matter how "different it is this time". No one knows when or how this will happen. Often it is a piece of news that comes out of nowhere and cannot be anticipated by TA, especially long term TA.

As far as targets go, the 18973 target has been compromised (it is the 2.618 projection from the 5578 low) but price is now hesitating in this area (these targets are usually not exact but do provide a good estimate). This level along with the current pin bar offers a heads up to at least lock in some profit if you are long from much lower prices and planned to hold only for shorter term movements. This is NOT a time to get short in anticipation of a broader correction.

There is another target at the 24480 level which is based the 1.0 projection from the 12730 low. It is within the proportion of the current structure and does offer another potential area to lock in profits along the way IF price actually reaches this area in a relatively short time (a week?). There is no way to accurately quantify the probability of price reaching this target, but based on the euphoria and momentum, there is a better chance of it happening than not at this point (things can change fast though).

In summary, price is showing a bearish pin bar going into the open of the CME futures . My opinion of the futures has been and still is this: they will bring balance to a wild market. The CME contract is larger (5 coins compared to 1 on the CBOE ) which means it will be easier for large players and institutions to scale and manage larger positions and more complex strategies which are not necessarily dependent on the direction of the market. This translates into more noise and consolidation rather than immediate sell off or rally. If I am going to take a swing trade long position in this market, I need to at least see price retest the 14450 area and then the rest of my position evaluation can proceed from there. As unpopular as it is right now, I will not buy anywhere near highs especially in runaway markets because I prefer to mitigate risk, not gamble.

Comments and questions welcome.
Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| | Cofounder (S.C.)

Hehe.. Gamble, many has... coming bear, many has not seen...
@f1dust, Is that a Yoda quote?
f1dust rob2093124
@rob2093124, haha... Could have been if he was in a different universe..
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Regarding catalysts, I believe it will be the obligatory changing of the mining algorithm that underpins Bitcoin that will play a key role in a long-term bear market.

There is no way Bitcoin can continue to function in the long term with the mining dynamic. Hashrate has always correlated to price so if the price goes up an order of magnitude from here then Bitcoin will be using the same electricity as Europe or something stupid like that.

There is no way that will be allowed to happen and it will also back up what the Core devs are wanting to do in the long run, and that is to reduce centralisation and Bitcoin's reliance on mining cartels. But it's always been a fundamental part of Bitcoin and the arguments and FUD will be enormous when the change is proposed, peer-reviewed and launched, something that will take at least a year given the conservative iteration rate of the devs.

Panic selling happening now. May be we do re-test 14k levels.
BTC will break 20 within a week.. read my lips.. any comments?
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@OTCLABS, I agree. small drop first & then 25
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@MarcPMarkets Thanks MarcP! I'm in long term HODL, so no sell signs here. I would like to hear your opinion on alts trading agains BTC. I've recently traded LTCBTC pair with BTC consolidating and LTC having rally up, exited trade with some more BTC, which was my objective.
Great analysis brother, always level-headed.
How do you think this will affect eth ?
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