BTCUSD update: This market is poised to push 12k after consolidating for about a half day, as the bullish momentum continues. Price is still within a potential reversal zone, but NOT enough of a reason to short.
In my previous report, I wrote about the built in long bias coupled with the freedom from institutions. No one knows what is going to happen when the futures start trading, even the experts who set up new futures contracts have no idea. The sentiment of the crowd appears to view institutional involvement as a whole new wave of large buyers that will drive the market dramatically higher, but do not realize institutions trade in more complex ways. I believe this new level of complexity will facilitate a more balanced market which is not the most beneficial for short term retail traders.
Before I get into the TA, think about this for a moment: A fund manager has a responsibility to his investors and wants to show a positive return, BUT that is not the only way fund managers get paid. They also charge management fees which are not performance based, but instead are incentivized by how much capital is under management. Wealthy investors invest more into instruments that are stable, and that show a consistent return over time. They invest less in wildly fluctuating markets like this. Futures and options can be used to create more stable performance which will attract more capital, which results in higher management fees. My point is this: This market will become a thick slow grind market, similar to the S&P 500 or EURUSD. It will offer opportunity as always, it just won't be as generous and easy as it is now.
As of now, price is sitting in the middle of the reversal zone and still no signs of weakness which means both long and shorts are high risk at these levels. In terms of risk/reward, shorts would make more sense, BUT with no signal and no confirmation, there is no evidence based reason to be short. What to look for is reversal candles or patterns around or just under the 12k level, or a break below 10722 which is the .382 of the recent bullish swing.
Until a bearish pattern appears, and until supports break, this market can continue higher. How high? If it breaks beyond the 12100, the next target extension is 12400 which is measured from the 7871 low. This is based on the structure that is in place at the moment.
In summary, as short term traders, the BEST we can do is embrace what the market is telling us, whether we personally agree with it or not. I believe this market is in a bubble and will correct harshly once the fake tether situation unwinds, but that is an opinion that the market could care less about. I do not act on my opinions, I act on technical facts. Sure I want to be long as it goes higher, but I am not willing to take the risk at these levels. Even retraces are tough because they are so shallow relative to how far a fast this market has come along. So when I face so much conflict, I stay flat until the market presents an opportunity that is in line with my trading plan. It is my plan that keeps me out of trouble, and minimizes any impulse stimulated by these fast moving prices. When you are in this business for a long time, you learn that capital preservation is actually more important than capital gain. This is why I seek consistency rather than lottery tickets. If you cannot trade with any consistency, in time the profit you have now will be donated back to the market.
Let me be among the first to comment. Keep up the good work, thanks for your useful insight. Could you elaborate on the Tether issue, why do you think tether is holding this market price higher? and also I just read that Warrren Buffet has been sitting on cash for nearly 2 years ($86 Bil??) waiting for S&P500 to crash
tradeshero
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@MarcPMarkets One question about the effect of institutional traders and the futures on alt coins.
If the futures market trade in such away that will stabilize BTC, then how will that affect alt coins and all coins paired with btc. ?
Thanks
tradeshero
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@MarcPMarkets I agree with all your points; thanks for sharing the insight. Very informative. Regards.
Totally loved your analysis and opinions. As long as you execute your plan you should be a wealthy man. Now I hope to follow through as well. Thank you so much for your work.
asbator
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Great post as always!
Goldbug thinks that futures will increase volatility, because institutions may try to manipulate the price of BTC to gain higher profits on futures.
Julian Hosp from TenX is pretty certain majority of institutional money will flow into futures because Bitcoin market is still to small for them. And it's great news for Bitcoin.
I myself don't understand how futures are going to rise the price of Bitcoin? After all there will be now possibility to invest in BTC without actually buying it which is kind of inflation.
Abu_Batata
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Marc once again I love what you say. Saying no one knows WTF is going to happen is so needed at this moment, I'm constantly flooded with people asking me what I think of price structure and I tell them the same thing, the risk is too high. It's statistically to short bitcoin but with this Tether nonsense I wouldn't be surprised to see a collapse where we test old support levels. I'd love to see your ETH perspectives this week as well. That's another market that has had me confused for some time!
cycler
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tethers are real, how would they have pumped btc so high if they weren't.
Abu_Batata
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@cycler, Because tether's site tells you they are not obligated to redeem them for USD. lmao you stuck in the cloud of stupidity as well
cycler
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@Abu_Batata, sarcasm bro? if tether have a website, and you can buy tethers, the omnichest has tethers, bittrex polo, finex, have tethers. you are trying to tell me tethers are fake when they clearly exist? ok then, well enjoy your fake bitcoin and fake altcoins. please don't use these threads to insult people, check my comments, I've never insulted a single person. Thank you for understanding.