Bitcoin, The CME And The 20K Target.
BTCUSD update: 19891 is the all time high at the moment while a pin bar is currently unfolding on this time frame which is a reversal sign that implies an oncoming short term correction. Will the open of the CME futures take this market to 20K anyway?
First let's talk about the technical situation that is present now. Momentum has been clearly bullish with very limited pullbacks for a month. The recent 5K pullback was met with immediate buying so the pain went away quickly. Right now, if this market retraces, a reasonable level to look for support is the 14450 area which is the .382 of the current bullish structure (measured from the 5400 low). IF price retests this level, it is an area that offers better reward/risk compared to where price is right now since the bullish trend would still be intact.
A decisive break below (anything is possible) can lead to a retest of the 11k to 8650 area which is the .618 zone of the structure measure from 5400. If price retraces this far, it will more likely unfold into a broader consolidation as it builds another base.
These levels provide areas to anticipate for swing trades or position trades on the long side, which is better than jumping in at any random level in terms of risk. All these markets are in a state of euphoria and will return to equilibrium because that is how all markets work, it doesn't matter how "different it is this time". No one knows when or how this will happen. Often it is a piece of news that comes out of nowhere and cannot be anticipated by TA, especially long term TA.
As far as targets go, the 18973 target has been compromised (it is the 2.618 projection from the 5578 low) but price is now hesitating in this area (these targets are usually not exact but do provide a good estimate). This level along with the current pin bar offers a heads up to at least lock in some profit if you are long from much lower prices and planned to hold only for shorter term movements. This is NOT a time to get short in anticipation of a broader correction.
There is another target at the 24480 level which is based the 1.0 projection from the 12730 low. It is within the proportion of the current structure and does offer another potential area to lock in profits along the way IF price actually reaches this area in a relatively short time (a week?). There is no way to accurately quantify the probability of price reaching this target, but based on the euphoria and momentum, there is a better chance of it happening than not at this point (things can change fast though).
In summary, price is showing a bearish pin bar going into the open of the CME futures. My opinion of the futures has been and still is this: they will bring balance to a wild market. The CME contract is larger (5 coins compared to 1 on the CBOE) which means it will be easier for large players and institutions to scale and manage larger positions and more complex strategies which are not necessarily dependent on the direction of the market. This translates into more noise and consolidation rather than immediate sell off or rally. If I am going to take a swing trade long position in this market, I need to at least see price retest the 14450 area and then the rest of my position evaluation can proceed from there. As unpopular as it is right now, I will not buy anywhere near highs especially in runaway markets because I prefer to mitigate risk, not gamble.
Comments and questions welcome.
First let's talk about the technical situation that is present now. Momentum has been clearly bullish with very limited pullbacks for a month. The recent 5K pullback was met with immediate buying so the pain went away quickly. Right now, if this market retraces, a reasonable level to look for support is the 14450 area which is the .382 of the current bullish structure (measured from the 5400 low). IF price retests this level, it is an area that offers better reward/risk compared to where price is right now since the bullish trend would still be intact.
A decisive break below (anything is possible) can lead to a retest of the 11k to 8650 area which is the .618 zone of the structure measure from 5400. If price retraces this far, it will more likely unfold into a broader consolidation as it builds another base.
These levels provide areas to anticipate for swing trades or position trades on the long side, which is better than jumping in at any random level in terms of risk. All these markets are in a state of euphoria and will return to equilibrium because that is how all markets work, it doesn't matter how "different it is this time". No one knows when or how this will happen. Often it is a piece of news that comes out of nowhere and cannot be anticipated by TA, especially long term TA.
As far as targets go, the 18973 target has been compromised (it is the 2.618 projection from the 5578 low) but price is now hesitating in this area (these targets are usually not exact but do provide a good estimate). This level along with the current pin bar offers a heads up to at least lock in some profit if you are long from much lower prices and planned to hold only for shorter term movements. This is NOT a time to get short in anticipation of a broader correction.
There is another target at the 24480 level which is based the 1.0 projection from the 12730 low. It is within the proportion of the current structure and does offer another potential area to lock in profits along the way IF price actually reaches this area in a relatively short time (a week?). There is no way to accurately quantify the probability of price reaching this target, but based on the euphoria and momentum, there is a better chance of it happening than not at this point (things can change fast though).
In summary, price is showing a bearish pin bar going into the open of the CME futures. My opinion of the futures has been and still is this: they will bring balance to a wild market. The CME contract is larger (5 coins compared to 1 on the CBOE) which means it will be easier for large players and institutions to scale and manage larger positions and more complex strategies which are not necessarily dependent on the direction of the market. This translates into more noise and consolidation rather than immediate sell off or rally. If I am going to take a swing trade long position in this market, I need to at least see price retest the 14450 area and then the rest of my position evaluation can proceed from there. As unpopular as it is right now, I will not buy anywhere near highs especially in runaway markets because I prefer to mitigate risk, not gamble.
Comments and questions welcome.
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