BTCUSD update: Price retests the 10450 to 10880 resistance zone quickly and is now hesitating. Is this bullish now? Not exactly. The market is still flirting with the upper border of the resistance which makes it risky for both shorts and longs. In this report I will highlight the levels and POSSIBILITIES to consider.
First, for those who are incapable of taking responsibility or feel that you are losing when a market moves in a favorable way and you are not in, DO NOT read my reports, they will not help you. The market is a much more effective teacher than me, just make sure you understand, the lessons will be expensive.
Now, for the rest of us who do understand the limitations of TA, and how financial markets work. I realize one thing that these coins have that other traditional markets do not, and that is an extreme imbalance of shorts. This is just a theory, but it may help explain the absence of persistent selling. The majority of U.S. retail customers do not have the ability to short. If a U.S. customer opens an account outside the U.S., most of the exchanges restrict these customers from having margin accounts. This type of condition dramatically limits selling pressure. I realize U.S. customers are not the only people active in these markets, but they do make up a significant portion. This means shorting carries additional risk in general but the futures may change that.
Institutions have access to deep pockets and WILL have the ability to short. Futures contracts are typically short term trading instruments that institutions will be able to use for reasons other than outright directional trading and investing. It will change the balance of power and will most likely enforce the behavior of more balanced markets. Not retrace 1K and the next day back up 1K. The entry of institutions is going to ruin the party for the retail trader, not enhance it.
Here is my perspective on the POSSIBILITIES BASED ON MARKET STRUCTURE at the moment. (Note to the entitled: THIS CAN CHANGE QUICKLY). Price is flirting with the upper border of the 10450 to 10880 resistance zone which is a .618 of the initial bearish swing. What makes this a tough area is it has broken the resistance which is bullish, but has stopped at the upper boundary which now makes it questionable. It is possible that price may consolidate for a day and then break to new highs. Capturing moves like this are possible but RISKY because the retrace potential is high and the nearest shallow support is at 10232 (.382 of current bullish swing). Unless you are day trading and taking smaller risk, longer time horizon trades at these levels ARE high risk and not worth the potential loss.
The bearish scenario: Price is sitting in close proximity to a resistance area, it is near the all time high (possibility of a double top) and beyond that, it is facing a wide reversal zone (up to 12094). The reversal zone is an extension beyond the recent peak measured from the 8821 low. If price blows through the reversal zone, then further strength is likely. With all this being said, there are NO signals to get short. Shorting right now may work out, but keep in mind it is a pure gamble because there is NO confirmation of selling. The nearest level that I am using as a reference to confirm that this market is likely to retest the low 9ks is a break of the 10292 level (.382 of recent bullish swing). Until that happens, this market is likely to consolidate and retest the highs.
In summary, these are wild markets that will most likely be tamed by the entry of institutions. Bubbles are not about fundamentals, but instead about euphoria. They persist until something changes the perception of the participants, especially when there is built in regulatory restriction on selling. I do not care how high or low a market goes, I simply seek high probability scenarios because it is consistency that breeds success not home runs.
Nice perspective. I have an idea governments are against BTC a way to make it lose it shine is to but it in a bubble then drop it down so new people will be scared of it. For example it drop to 6k most of the new comers will lose money and it will give a bad name to BTC. I do think BTC will get to crazy $ values but not this quick.
dwk8081
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@cryptocat2, That is super interesting ... the Japanese Govt does the same when they see the short interest ratio too high (using their own measurements from the TSE) and when that happens they intervene into the mkt by buying ETF's to blow out foreign hedge funds short positions ... hence shorting the Nikkei was as tricky business at certain points... anyway ... your point is interesting about Govts to want to take some luster off BTC.
saveid
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Hey Mark, thanks for your time and sound advice. Did anyone else noticed- every time bitcoin starts falling massively, markets lock up- it is impossible to sell bitcoin... The sites are down for maintenance or some other reason... Last time trading view didn't even load. It really looks like we are taken for a ride here...
Stay safe friends, banks are old and powerful and they are afraid, and when you are afraid, you do stupid things to other people without any remorse...all that matters is your survival. We think we live in a civilized world, but banks dealing death right and left is not things of the past, it is a reality of today. Technology changes fast, people change slowly.
Jolgan
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Thank you for the analysis, now I get why you can not short, as I understand it is because of a US government regulation.
Funny thing, you put this as being a "built in" restriction, I had the idea that US government was not "in", but you're right if there is money they are in, after all, they print it.
Pushing BTC into bubble region would be a way of defending USD?
gonzavar
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It´s always a pleasure to read your coments on the market. Well rounded, without hype or false expectation, very professional.
I´m out right now, observing the trending consolidation before doing something significant. Thanks!
sentient-
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Incredibly well-rounded perspective, Marc. Thank you for taking the time to write this!
Kibarg911
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You are not gabler, but great professional trader!
Thank you for your work, your text helps me better understand market movements.
jasonlau924
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I am going to take the high risk of buying into this market, and selling half before futures go live date to reduce my cost.
bigLITTLE
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I am considering to short BTC and move on to BCH, well mostly because the party are going to be over soon. Would the futures affect BCH and other major Altcoins?