Bitcoin Bakkt Battle Planning
I hope this post sparks quite the debate in the comment section as Bakkt could have a massive influence on the short term price action (and by that I mean about a week prior and after debut). Some people may want to debate if futures trading even affects the crypto market and I would argue that it does, due to the markets lack of depth and liquidity compared to other markets setting up arbitrage opportunities. My gold and bitcoin post underpins why I think we are ultimately going down, the only question is do we first melt up or melt down, and the pitfalls between here and there.
The chart below shows the volatile price action that occurs with the debut of futures trading in crypto. This price action is on coinbase, which was a bit more stable than some of the other exchanges. In the days around the beginning of futures trading we see
All of that sets up a rather intense two weeks of trading and I think the intensity is going to happen again.
The first key point about both CME and CBOE is they both had a run up in price before debut.
Secondly, we were at the end of a parabolic move up without the same clear structure except for the parabola. This time we have larger structure setting up targets. The falling wedge, Barr, and symmetrical triangle we find ourselves in right now all have targets you can use to make some very technical trades. I hope the structure helps a lot of traders, but I expect the volatility is going to just whipsaw people in and out of positions and the fomo will be high.
Once again, please see my Gold and Bitcoin post to see why I am seeing a lot of topping behavior out of bitcoin. The current symmetrical triangle we find ourselves, if it breaks to the upside, means the falling wedge over-performed and so we should see under-performance after the bulls are exhausted.
We also see that Bitcoin has the habit of popping through the top of the monthly Bollinger band before crashing. Bitcoin closing September in the green above the BB also gives us a chance to see how the RSI will respond to being over-bought. The candles against the top of the BB suggest we could exhaust our way out the top
My minority opinion is our triangle breaks to the downside before Bakkt trading begins. There is a lot more money to be made in arbitrage if you pump the price and short from there. We may even see over-performance to 17k but that might be a bit much. Some ridiculous price like $15,555 is probably going to be the top.
The chart below shows the volatile price action that occurs with the debut of futures trading in crypto. This price action is on coinbase, which was a bit more stable than some of the other exchanges. In the days around the beginning of futures trading we see
- a blow off top on the 7th
- CBOE futures debut on the 10th: See price surge over 20% on Coinbase, with other exchanges seeing over 25% moves
- a lot happened Dec 17th: We set a high barely higher than our blow off top from the 7th in the hours before the CME futures, and when the CME futures debut the bear market begins.
All of that sets up a rather intense two weeks of trading and I think the intensity is going to happen again.
The first key point about both CME and CBOE is they both had a run up in price before debut.
Secondly, we were at the end of a parabolic move up without the same clear structure except for the parabola. This time we have larger structure setting up targets. The falling wedge, Barr, and symmetrical triangle we find ourselves in right now all have targets you can use to make some very technical trades. I hope the structure helps a lot of traders, but I expect the volatility is going to just whipsaw people in and out of positions and the fomo will be high.
Once again, please see my Gold and Bitcoin post to see why I am seeing a lot of topping behavior out of bitcoin. The current symmetrical triangle we find ourselves, if it breaks to the upside, means the falling wedge over-performed and so we should see under-performance after the bulls are exhausted.
We also see that Bitcoin has the habit of popping through the top of the monthly Bollinger band before crashing. Bitcoin closing September in the green above the BB also gives us a chance to see how the RSI will respond to being over-bought. The candles against the top of the BB suggest we could exhaust our way out the top
My minority opinion is our triangle breaks to the downside before Bakkt trading begins. There is a lot more money to be made in arbitrage if you pump the price and short from there. We may even see over-performance to 17k but that might be a bit much. Some ridiculous price like $15,555 is probably going to be the top.
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