BTCUSD update: Minor retrace to the 18k level followed by a bullish pin bar off of a narrowing channel that points to an attempt at 20k. Now that both the CBOE and CME futures are in play, I anticipate more and more price noise in this market, and based on the current structure, a test of the psychological 20k level.
As far as levels goes, not much has changed except for the 20300 upper boundary of the reversal zone generated by the structure of the 18k retrace. This zone is narrow and is worth noting because of the psychological effect of the 20K level. Will price break it?
Based on the current bullish pin bar that is unfolding, price is likely to push through momentarily at least. Markets that intend to sell often reject major levels quickly, not form a pin bar within the lower boundary of a bullish trend line just under the resistance level.
With that being said, there is a conflicting structure than may lead to a much broader correction soon after the 20k test and that is the bearish pennant formation which is made clear by the converging trend lines. These formations have been appearing frequently in these markets only to see price go higher, but that does not mean they should be ignored when they appear.
As the trading day progresses, the CME futures volume should increase and have a stronger effect on the price action. Keep in mind futures contracts can easily be shorted which will compensate for the absence of selling that has been built into these markets thanks to regulation in the U.S. And if institutions decide to get short, they can afford to do it big, and with ease now that the CME offers a 5 coin contract compared to the one coiner over at the CBOE.
So price is at a psychological resistance, gyrating around 18974 which is a 2.618 target (written about in previous report) and in the process of building a bearish pennant formation. Even though the overall trend is still bullish, these conflicting signs say three things to me: A broader short term correction is more likely, if you are long, lock in some profit, and do not take any new long swing trades at these levels.
And as far as the alts, people keeping asking me what will happen if this market presents a more serious correction and the answer is: who knows. The relationship with the alts fluctuates wildly. One minute BTC sells while alts push dramatic new highs, and the next minute, they are all showing the similar price structures as they are at the moment. I don't rely on that relationship and instead evaluate the price action of each coin independently.
In summary, it will be interesting to see how the CME affects this market now that professionals and institutions can get into the game safely and with size. As far as my plan goes, I am patiently waiting for a reasonable retrace to a projected support which is at the 14500 area. IF price retests that support, I will then evaluate for a bullish reversal. Otherwise I have no reason to take any action at this time. If the market can't meet my criteria, then I can't take any risk because the market doesn't control me, I control myself. That is what a trading plan is all about.
Comments and questions welcome.
Quick announcement: Tomorrow I am going to appear live on NASDAQ's Twitter broadcast. They are going to interview me about the coins. I will post the link in tomorrow's report so keep an eye out for it.
@MarcPMarkets I find alt-btc relation pretty clear. Traders sell alts when they think BTC will raise (possibly because they are more willing to risk crypto than cash), when BTC consolidates they buy back their favorite cryptos, that's what we see when alts are rising. However, when BTC is unstable and relatively large pullback is in sight, like now, they save profit to cash. It's reasonable, since if BTC crashes, almost all crypto crash. When you see a large wall just under 20k, and BTC just broke the raising triangle because of the (seemingly false) hope of CME futures boost, why would you risk? This seems to be the thinking behind alt-btc price action, pretty repetitive for months, I say.
girishgopinath
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@MarcPMarkets, nice to know that you shall be appearing live on NASDAQ. All the very best to you. Your hard work not only pays you but others too.... Really appreciate!!
goldbug1
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Great Mark!
rupazaypuub
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Thank you!
elicoin
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wow...impressive..you are great mark..
Goldxer
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Rising wedge or pennant is very reliable breakdown indicator. Seen it work with gold many times.
ryopphdi
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@MarcPMarkets you wrote "Keep in mind futures contracts can easily be shorted which will compensate for the absence of selling that has been built into these markets thanks to regulation in the U.S"
That's true it's easier to open short position now. But this is still incredibly risky move. Unless you own lots of BTC so you can influence spot market too. Or am I missing something here?
IMHO it is way easier to open long position now and then buy BTC on spot market to push price up.
DSimo
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nice.. what do u think about this setup
Goldxer
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@DSimo, lower part of that zone at 16,912 just tested now 8.40am AEDT (Australian Eastern Daylight Saving Time). Perfect buying opportunity and the buyers are stepping up.