Bitcoin - Whale Colluding Ticket Scalpers at 5k "ALL SOLD OUT"
Updated
Over the past few weeks Bitcoin has just relentlessly continued to push higher. Coming off the 3800 level, it has been a relentless rally of sorts, but all good things must come to an end. Yet maybe just maybe we are not done yet!
My theory is quite simple, dumb money has mostly sold out of their positions. By dumb money I do not imply that someone is dumb, I am using the the term for the traditional retail investor. Smart money is considered institutional or larger operators that have the means and ability to access information the retail investor and trader do not. In addition they can use news media and other channels to scare dumb money out of their positions.
I can guarantee that more retail investors have sold out since 5100 than have bought in. This implies that larger institutions and traders are the ones still buying. But why? That is the correct question, yet many are ignoring the obvious, and are simply focused on the FUD.
While the herd continues to focus on Tether and the Binance hack, and sweat over moving their 1500 TRX coins off Bitfinex they continue to ignore and underestimate a fundamental game changer for the space. Traditional stock brokers are preparing to offer Bitcoin (along with some alt-coins) on their platforms in the near future. I am not just talking one or two, but many. We heard about E-Trade, TD Ameritrade and Fidelity recently, but as I was making some modifications to a couple "motifs" on Motif Investing I noticed, they too are going to offer crypto currencies on their platforms.
Motif is an interesting platform that allows the investor to create their own ETF. You can chose up to 30 stocks or ETF's and put them in a motif creating your very own ETF. Perfect vehicle for the long term investor to have a basket of stocks for which they can add a couple hundred bucks a month too. This is important because this type of investor is not an active participant, meaning once they buy, they just hold. In addition it will allow you to make your own crypto motif (ETF) allowing a quick diversification tool. Too cool!
So you have some of the most widely used exchanges preparing to offer Bitcoin and a few other alt-coins to their platforms. This will bring fresh money into the space, and a lot of it. I was at a charity gold tournament last weekend, and all 3 in my group were interested in buying Bitcoin, but none were not comfortable with buying it on Coinbase. Just look at all the FUD. They simply do not understand. However if they can buy it in their TD Ameritrade, E-Trade account or Motif account, hello! Even those who still think it is a scam are going to think twice when they have it accessible on their platform.
I have been mentioning since last year, that institutional and large operators were likely accumulating during the bear market. They were not worried about the dip to 3200, they just kept on accumulating. They are used to investing into companies at pre-IPO prices and holding for 2-3-4-5 years through the pain. I know, I know you guys are hammering this market shorting and daytrading. How is that working lately? Been awful quiet in Bear valley!
These large investors understand that once these products hit the retail exchanes, the payoff will be great. Like getting in 3 years ago, on Beyond Meat. The fact Bitcoin continues to grind higher, and short interest is not squeezing yet, adds further weight that larger players are getting a head of the potential boom Bitcoin and others will have once they hit the mainstream investor.
After all who do you think is buying here? "That guy" that has been locking in profits since 4200? He is sold out now. Or all the "expert" analysts on TV that were calling for a top? They sold out and are short. Or what about "that guy" calling for a 30% correction? Ohh he is bullish on crap coins now, because they are discounted 98%. As the ticks tock, the amateurs flip flop. This is why most professionals prefer the long game. Markets trend up over time, there is no need to complicate it.
Technically:
Though the area of resistance is between 6000-6500, we are still along way from the 38.2% retrace of the overall bearish swing. This is found at 9500. As momentum starts to pick up I would not be surprised to see a move into the 6800-7500 level before we get a pullback. In the interim, 6500 is the next technical level, but lets zoom out.
The 6800 area is a major level of resistance as it was resistance and support early to late last year. As Marc mentioned in his article last night, this is an area where many bought and may look to exit positions. The question is not when and where we reverse, we know this eventually will happen, but what kind of a pullback can we expect?
If we push into the mid to upper 6k area, the 5100-5500 area is going to be an area to look for reversals. If we pullback in the next day or two, the 4750-5100 area is likely to be met with buyers. Yes all those buyers that "Sold Out" are now feeling the emotional heartache of selling too early. They will be looking to re-enter, and the higher it goes, the more impulsive "that guy" will become, to buy any dip.
This will especially be true if it pushes into the 7k area. Ohhh the heartache will be like the Hillary Clinton 2016 Presidential party. Break out the kleenex, because there will be many alligator tears. There will be accusations of Whale Collusion, Cheating through Manipulation, and of course none of the blame will be on their lack of how markets work in the long term.
Of course it is good to have some cash on the sidelines in the event we do get a pullback in the near term. So depending on your position and means, there is nothing wrong with fading the rally here.
However, nothing on the chart cries get out, other than a few "TA's that were yelling "SHORT" for weeks, have been trolling for months, and they somehow seen the light and have gone LONG. (Here's your sign) We should keep in mind after a move like this we may not get much warning of a pullback, and it can be swift. If you can not take the pain of a pullback, well, trim a little off the top here.
In addition we are just starting to see shorts exit. This may add some fuel for a squeeze higher, and provide enough momentum to hit the mid to high 6k area. Only time will tell, but it is surely on its way, and as shorts are squeezed momentum to the upside accelerates.
Summary:
My personal opinion is that any pullback is a buying opportunity between 4900 & 5300. This is not only a technical area, but one where many sold their coins too early. Though 4500 is still possible, it is becoming less probable as the market moves higher.
In the end I am not selling yet and may not sell at all. I am looking to buy the dip!
Whether it is in the next couple weeks or the next couple months, Bitcoin is going to be more accessible to more traders and investors than ever before. When platforms are advertising "coming soon", "register now", and have cryptos listed on their products page, the last thing I want to be is standing at the end of the line and its "ALL SOLD OUT" @ 5k and I am paying scalper prices.
After all, this is going to provide access for 30-40 million MORE US retail traders and there are only 19 million tickets to the show! I want to be the scalper and not the scalpee.
My theory is quite simple, dumb money has mostly sold out of their positions. By dumb money I do not imply that someone is dumb, I am using the the term for the traditional retail investor. Smart money is considered institutional or larger operators that have the means and ability to access information the retail investor and trader do not. In addition they can use news media and other channels to scare dumb money out of their positions.
I can guarantee that more retail investors have sold out since 5100 than have bought in. This implies that larger institutions and traders are the ones still buying. But why? That is the correct question, yet many are ignoring the obvious, and are simply focused on the FUD.
While the herd continues to focus on Tether and the Binance hack, and sweat over moving their 1500 TRX coins off Bitfinex they continue to ignore and underestimate a fundamental game changer for the space. Traditional stock brokers are preparing to offer Bitcoin (along with some alt-coins) on their platforms in the near future. I am not just talking one or two, but many. We heard about E-Trade, TD Ameritrade and Fidelity recently, but as I was making some modifications to a couple "motifs" on Motif Investing I noticed, they too are going to offer crypto currencies on their platforms.
Motif is an interesting platform that allows the investor to create their own ETF. You can chose up to 30 stocks or ETF's and put them in a motif creating your very own ETF. Perfect vehicle for the long term investor to have a basket of stocks for which they can add a couple hundred bucks a month too. This is important because this type of investor is not an active participant, meaning once they buy, they just hold. In addition it will allow you to make your own crypto motif (ETF) allowing a quick diversification tool. Too cool!
So you have some of the most widely used exchanges preparing to offer Bitcoin and a few other alt-coins to their platforms. This will bring fresh money into the space, and a lot of it. I was at a charity gold tournament last weekend, and all 3 in my group were interested in buying Bitcoin, but none were not comfortable with buying it on Coinbase. Just look at all the FUD. They simply do not understand. However if they can buy it in their TD Ameritrade, E-Trade account or Motif account, hello! Even those who still think it is a scam are going to think twice when they have it accessible on their platform.
I have been mentioning since last year, that institutional and large operators were likely accumulating during the bear market. They were not worried about the dip to 3200, they just kept on accumulating. They are used to investing into companies at pre-IPO prices and holding for 2-3-4-5 years through the pain. I know, I know you guys are hammering this market shorting and daytrading. How is that working lately? Been awful quiet in Bear valley!
These large investors understand that once these products hit the retail exchanes, the payoff will be great. Like getting in 3 years ago, on Beyond Meat. The fact Bitcoin continues to grind higher, and short interest is not squeezing yet, adds further weight that larger players are getting a head of the potential boom Bitcoin and others will have once they hit the mainstream investor.
After all who do you think is buying here? "That guy" that has been locking in profits since 4200? He is sold out now. Or all the "expert" analysts on TV that were calling for a top? They sold out and are short. Or what about "that guy" calling for a 30% correction? Ohh he is bullish on crap coins now, because they are discounted 98%. As the ticks tock, the amateurs flip flop. This is why most professionals prefer the long game. Markets trend up over time, there is no need to complicate it.
Technically:
Though the area of resistance is between 6000-6500, we are still along way from the 38.2% retrace of the overall bearish swing. This is found at 9500. As momentum starts to pick up I would not be surprised to see a move into the 6800-7500 level before we get a pullback. In the interim, 6500 is the next technical level, but lets zoom out.
The 6800 area is a major level of resistance as it was resistance and support early to late last year. As Marc mentioned in his article last night, this is an area where many bought and may look to exit positions. The question is not when and where we reverse, we know this eventually will happen, but what kind of a pullback can we expect?
If we push into the mid to upper 6k area, the 5100-5500 area is going to be an area to look for reversals. If we pullback in the next day or two, the 4750-5100 area is likely to be met with buyers. Yes all those buyers that "Sold Out" are now feeling the emotional heartache of selling too early. They will be looking to re-enter, and the higher it goes, the more impulsive "that guy" will become, to buy any dip.
This will especially be true if it pushes into the 7k area. Ohhh the heartache will be like the Hillary Clinton 2016 Presidential party. Break out the kleenex, because there will be many alligator tears. There will be accusations of Whale Collusion, Cheating through Manipulation, and of course none of the blame will be on their lack of how markets work in the long term.
Of course it is good to have some cash on the sidelines in the event we do get a pullback in the near term. So depending on your position and means, there is nothing wrong with fading the rally here.
However, nothing on the chart cries get out, other than a few "TA's that were yelling "SHORT" for weeks, have been trolling for months, and they somehow seen the light and have gone LONG. (Here's your sign) We should keep in mind after a move like this we may not get much warning of a pullback, and it can be swift. If you can not take the pain of a pullback, well, trim a little off the top here.
In addition we are just starting to see shorts exit. This may add some fuel for a squeeze higher, and provide enough momentum to hit the mid to high 6k area. Only time will tell, but it is surely on its way, and as shorts are squeezed momentum to the upside accelerates.
Summary:
My personal opinion is that any pullback is a buying opportunity between 4900 & 5300. This is not only a technical area, but one where many sold their coins too early. Though 4500 is still possible, it is becoming less probable as the market moves higher.
In the end I am not selling yet and may not sell at all. I am looking to buy the dip!
Whether it is in the next couple weeks or the next couple months, Bitcoin is going to be more accessible to more traders and investors than ever before. When platforms are advertising "coming soon", "register now", and have cryptos listed on their products page, the last thing I want to be is standing at the end of the line and its "ALL SOLD OUT" @ 5k and I am paying scalper prices.
After all, this is going to provide access for 30-40 million MORE US retail traders and there are only 19 million tickets to the show! I want to be the scalper and not the scalpee.
Note
Since we mentioned the trade at 5140 publicly on our show and over the past couple weeks we feel obligated to inform those that have been following this trade, that we are closing half the position we bought at 5140 out. This still leaves us with half the position if Bitcoin continues to rally, but also locks in our gains. I mentioned I many not sell, but after Marc and I went over a few charts this afternoon, we thought it was best to lock in something here. There were several reasons for this, which we will update later.
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