BTC - Let the shorting Begin!
Updated
I have heard over and over how the futures market will allow traders to short bitcoin'. But my question is simply, WHO IS SHORTING BITCOIN HERE? They should be saying “hedge”.
I really think it would be naive for a trader to come out tonight and say, "Yeah based on the chart I think I will sell Bitcoin' at ummmm errrrrrr let me see, $10,000 for January 17th settlement date!" SERIOUSLY? Now can it happen? Sure anything is possible, but so is harvesting corn’ on Mars according to Elon Musk.
I think the hype is over blown and regardless if you’re in first grade or have a PHD in economics you can simply look at the chart and go "it is headed up"! Why would you "bet" against the long term trend over any significant time period like a month? Short term trading yes, but long term, the trend is one way and it is headed up!
So this morning I was trying to "guess" a level of where the January contract would be sold at if I was a seller. I pulled up the LOG chart, which is not the one shown on CNBC (and they know better), to see if there is a trend. Now I have seen several "Trend channels" and I do not agree for the most part with most of them other than on a short term basis, so here is mine for what it is worth and my validation of it. Note the move from 2013 to the first high was 1775%, so was the 2nd, and the level where I thought we would get a pullback to $2200 (after pulling back to $2900) is 1775% as well. Well from this pullback where is the 1775% level. $51,600 +-. Now does this mean we get there tomorrow? No, but those that will be trading the futures market are not stupid people and are not going to be going into this thinking "yeah let me sell $10,000 contracts for Jan expiration". Even at the current levels and based on Bitcoin's performance I would think they start trading between $18 and 20k. I mean one month is an eternity in the crypto world, it's not your typical gold' contract! This will has and will have a psychological affect on the market for sure.
This is why I bought yesterday! Where others are fearful I see an opportunity. Keep in mind I can afford the loss so this is "gambling money" but where others have heard over and over "allows to short bitcoin", I look at the chart and go "your nuts if you do"! With bitcoin’ breaking new highs every 30-45 days and the first contract to settle on the 17th of January (about 45 days from now), I would be surprised to see them trading under $17,000 I mean that would be a shocker. But what about a higher level. Maybe $25,000 and that could set off a rally and that may just blow the doors open and circuit breakers will be flickering. So 18-20k is what I expect to see. If I had to be on a number it would be $19,000+- $1000! Especially with all the hype. I could be way off but I'm thinking a 20% premium at the current level of $16,000 is $19,200. But keep in mind a small trade can move this markets as 40% of bitcoin is owned by 1000 wallets and do not move, and these markets trade thin. This is the Ace of spades.
With guys like Novogratz calling for a possible $40,000 by the end of the year, and the fact there is a ton of money from fund managers etc, that want exposure to the space but have avoided it because there was no way to “hedge” an investment, I expect money to start pouring in. This is what we have been waiting for and the reason I invested in August. We have already seen money coming in on coinbase and in my opinion this is just the beginning!
This is very risky as nobody knows the outcome, so do your own research and do not gamble with more than you can afford to lose!
I really think it would be naive for a trader to come out tonight and say, "Yeah based on the chart I think I will sell Bitcoin' at ummmm errrrrrr let me see, $10,000 for January 17th settlement date!" SERIOUSLY? Now can it happen? Sure anything is possible, but so is harvesting corn’ on Mars according to Elon Musk.
I think the hype is over blown and regardless if you’re in first grade or have a PHD in economics you can simply look at the chart and go "it is headed up"! Why would you "bet" against the long term trend over any significant time period like a month? Short term trading yes, but long term, the trend is one way and it is headed up!
So this morning I was trying to "guess" a level of where the January contract would be sold at if I was a seller. I pulled up the LOG chart, which is not the one shown on CNBC (and they know better), to see if there is a trend. Now I have seen several "Trend channels" and I do not agree for the most part with most of them other than on a short term basis, so here is mine for what it is worth and my validation of it. Note the move from 2013 to the first high was 1775%, so was the 2nd, and the level where I thought we would get a pullback to $2200 (after pulling back to $2900) is 1775% as well. Well from this pullback where is the 1775% level. $51,600 +-. Now does this mean we get there tomorrow? No, but those that will be trading the futures market are not stupid people and are not going to be going into this thinking "yeah let me sell $10,000 contracts for Jan expiration". Even at the current levels and based on Bitcoin's performance I would think they start trading between $18 and 20k. I mean one month is an eternity in the crypto world, it's not your typical gold' contract! This will has and will have a psychological affect on the market for sure.
This is why I bought yesterday! Where others are fearful I see an opportunity. Keep in mind I can afford the loss so this is "gambling money" but where others have heard over and over "allows to short bitcoin", I look at the chart and go "your nuts if you do"! With bitcoin’ breaking new highs every 30-45 days and the first contract to settle on the 17th of January (about 45 days from now), I would be surprised to see them trading under $17,000 I mean that would be a shocker. But what about a higher level. Maybe $25,000 and that could set off a rally and that may just blow the doors open and circuit breakers will be flickering. So 18-20k is what I expect to see. If I had to be on a number it would be $19,000+- $1000! Especially with all the hype. I could be way off but I'm thinking a 20% premium at the current level of $16,000 is $19,200. But keep in mind a small trade can move this markets as 40% of bitcoin is owned by 1000 wallets and do not move, and these markets trade thin. This is the Ace of spades.
With guys like Novogratz calling for a possible $40,000 by the end of the year, and the fact there is a ton of money from fund managers etc, that want exposure to the space but have avoided it because there was no way to “hedge” an investment, I expect money to start pouring in. This is what we have been waiting for and the reason I invested in August. We have already seen money coming in on coinbase and in my opinion this is just the beginning!
This is very risky as nobody knows the outcome, so do your own research and do not gamble with more than you can afford to lose!
Note
Keep in mind the open will be most likely un-eventful as the spread will likely be pretty large. It will take time to tighten up and orders start flowing.Note
Well that didn't last very long! 3 minutes in the site shuts down! LOLNote
Well I'm shocked I did think we would go higher. we did get an initial surge to $16,600 and have leveled off around $16,000. Still early and markets are thin.Note
Well it took some time but the futures market has priced is trading at a 12% premium to the spot price. futures currently $18500 spot $16,700 (coinbase) $16400 Bitfinex. So it took some time but 18-20k was a pretty good guess! Not even Wallstreet is shorting bitcoin!
Note
17% premium to spot from some exchanges like Bitstamp. Talk about a nice time delay trade!
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.