BTCUSD update: Price is not far from the all time high of 17171 just hours away from the start of today's business on the CBOE. This is when more volume will enter the market and have a more significant effect in either direction. In this report I am going to highlight what to watch for at the two upcoming resistance levels.
17171 and the price range up to 18300 are the areas to watch closely which this market is likely to test. Since the futures have opened, price momentum has been bullish and has taken out the minor resistance zone between the 15500 to 16230 area (.618 of bearish structure). What many do not realize is that volume in the futures market outside regular business hours is often much lower and if these contracts are going to have any effect, it is more likely to happen during the day session.
The reason why these levels are important to watch is because today, many more shorts will be able to enter this market compared to the absence of shorting ability by most U.S. participants. A bearish reversal candle off of the 17171 high will be viewed as a potential double top. While the reversal zone just above is where price can spike to a new high, attract all the breakout traders and then fall apart. This often begins with a pin bar, or outside bar which is likely to happen below 18300. If price breaks above this upper boundary, then 20k becomes a much more likely target.
If there is a correction, the 14250 to 13575 zone (.618 of current bullish swing), and the 12700 to 11550 area would be the range to look for bullish reversal patterns. Again these levels offer the most attractive reward/risk for smaller time frame trading and not investing. In other words, if you are looking to buy, these are the higher probability levels to evaluate IF price manages to retest them.
At the moment, this market is not showing any signs of significant weakness or reversal patterns. It is still too early, but that may change during the day session of the futures. There is no way to predict what will happen. The best you can do is isolate a couple of possible scenarios and see if the market cooperates, then measure risk from there. This is the short term trading mentality and what you will be competing with when the futures traders really enter this market.
In summary, I expect the CBOE futures along with the CME next week to bring balance to a market that is moving 2500 points a day. People entering this market now are entering with extremely unrealistic expectations and are only looking at, "Wow, 1000 to 17000 in less than a year!". In the long run, I do believe it will go higher, I have been long term bullish the entire time. It is the short term that people do not understand and will require more skill to navigate. I do not think the futures will cause a major sell off, instead I think they will enforce reality which means more realistic ranges and movements. Retracing 5k in two days and recovering it is amazing, (unless you bought at 17000) but it is not reality. Whether you are investing or looking to trade shorter time horizons, knowing what is more likely to happen based on price action will improve your timing but there is an undercurrent of ignorance that the professional futures traders are going to capitalize on. And that is the lack of risk management which is typical of new money entering hot markets near highs. The hype will attract this money and the professionals will take it out and this is what the futures will facilitate. Just something to think about.
Well said @MarcPMarkets ... people will choose which reality they're on based on what they see and what they experience, both in the present and in the past...
Professional traders know or learn to look at what's happening objectively and apply past experiences to create their own realities of the situation that most people don't see ... and everyday we see people questioning conventional wisdom (that's ok, everyone is free to comment) and ideas/guidance given by grounded experience traders (good, hopefully you learn something when markets move against you).
Don't forget the candle sticks and price movements you see on the charts are actually a reflection of the collective actions (rational or irrational) of buyers/sellers/traders/investors. There are no magic involved, just human & machine AI (also programmed by humans) actions and reactions.
Unless Marc holds a 5Billion portfolio in Bitcoins, he's not going to move the market much and neither are you. There is no way for him to predict where the market will go and professionals don't hope/pray, they trade, following rules and guidelines learnt from other professionals better than them and integrating their own experiences to make it their own.
This is exactly what I have been doing the past 3-4 months since I started trading Cryptocurrencies and I've learnt so much, especially from people like Marc.
How some people here comment is downright disrespectful and the best part is we don't have to do a thing because the market will teach you lessons you will never forget.
Thank you Marc and to everyone here especially @MarcPMarkets have a wonderful Christmas and a Happy New Year! :)
Hi Marc, thanks for the post. do you mind explaining this statement?
"Retracing 5k in two days and recovering it is amazing, (unless you bought at 17000) but it is not reality"
If it's not reality, what is it?
OneManTrading
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@Accra, It is ---> "Irrational exuberance... unsustainable investor enthusiasm that drives asset prices up to levels that aren't supported by fundamentals."
Yet the fundamentals are based purely on speculation, meaning we haven't done this experiment before. It's not reality. It's an alternative reality when compared to everything else.
Where this train stops... anyone's guess.
AdriTrading
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Loving your clear and detailed studies, very precious piece of information on Trading View!!
I am learning a lot, you are my new BTCUSD trading Messiah :D !!
Keep going and thanks a lot for your insight!!
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SniperSights
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"There is no way to predict what will happen." Zoom out.
UberTrender
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@Piper227, you mean the price has gone up a lot recently?
Shockinalive
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@Piper227, hahaha +1! Huge exponential growth when you zoom out, there is no way this can sustain. I love Bitcoin, but we have to go down before we will have healthy growth again. Just my opinion though, don't want to piss off anyone.
SniperSights
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@Shockinalive, the fact that it cannot sustain for eternity is completely irrelevant, nothing can. It is growing exponentially because it is a network effect. 5 years ago people sat there and said about Amazon, look at that, there is no way that can continue. That doesn't make it a bad buy. It is such consistent growth, it is incredibly predictable. Will it stop one day? Sure. If it doesn't for 1 month, you'll double your money. It has shown no signs of weakness over any relevant timeframe.
Professional traders know or learn to look at what's happening objectively and apply past experiences to create their own realities of the situation that most people don't see ... and everyday we see people questioning conventional wisdom (that's ok, everyone is free to comment) and ideas/guidance given by grounded experience traders (good, hopefully you learn something when markets move against you).
Don't forget the candle sticks and price movements you see on the charts are actually a reflection of the collective actions (rational or irrational) of buyers/sellers/traders/investors. There are no magic involved, just human & machine AI (also programmed by humans) actions and reactions.
Unless Marc holds a 5Billion portfolio in Bitcoins, he's not going to move the market much and neither are you. There is no way for him to predict where the market will go and professionals don't hope/pray, they trade, following rules and guidelines learnt from other professionals better than them and integrating their own experiences to make it their own.
This is exactly what I have been doing the past 3-4 months since I started trading Cryptocurrencies and I've learnt so much, especially from people like Marc.
How some people here comment is downright disrespectful and the best part is we don't have to do a thing because the market will teach you lessons you will never forget.
Thank you Marc and to everyone here especially @MarcPMarkets have a wonderful Christmas and a Happy New Year! :)