BTC - Let the shorting Begin!

BITSTAMP:BTCUSD   Bitcoin / Dolar
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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!
Komen: 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.
Komen: Well that didn't last very long! 3 minutes in the site shuts down! LOL
Komen: 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.
Komen: 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!
Komen: 17% premium to spot from some exchanges like Bitstamp. Talk about a nice time delay trade!
Look my chart ;)
@MrClock, looks like a solid rollover. Curious to see what happens next.
+1 Balas
"HE" may not own one. -- "Fisher Gold Bug" -- But my "Wife" and "I" do. (and sold approx. 1,000 of them). My "Wife" opened a "Gold Prospecting Store". (Sold Mining Equipment and Treasure Hunting Equipment") She closed it "New Years Eve" Last Year. -- "2016". "I" just wanted to share this with you.
@jeffreyjim, Thank you! That makes me happy.
@goldbug1, I've been curious, because of your name. Do you own a Fisher Gold Bug?
In the one day chart the RSI bearish divergence is big. Is that something that matters at these blind bull momentum moments?
Spot on GB! Nvogratz got in when Bitcoin touched $5,5K support and in his mind that was early. Did he know futures were coming. You bet. The only possibility when shorts would dominate the longs would be if he and the likes of him wanted to just make some quick cash on Bitcoin (by talking its price up, etc. prior to the futures launch - it may still play out though - the odds are still there for that but small.) but I guess he got in for a long haul. Again as you mentioned the market is still very shallow. What the volumes? Did you check?
Tnx for post.
I like your analysis but one thing I’m not sure whether we should take into account is the fact that these futures create a completely unprecedented market. So I feel like the big institutional aren’t going to make their plays in the futures markets until they get a sense of how it’s working out. Until operations are running smoothly the big money contracts won’t flow in. So I feel like current futures trading activity won’t be completely representative of how it will play out - like saying that “Wall Street is bullish” or not. I mean it would be silly to try and short the current market but if they had a strategy like if they already flooded the market buying up bitcoin and plan to pull right before a contract settles.
Also it might be worthwhile keeping in mind that the manipulation will begin closer to time contracts settle. But who knows.
I’m not completely sure how future markets work either so I may be completely off base, so please critique this analysis if so. But curious to hear your thoughts on this? I have loved reading your tempered analyses - I have def learned a lot from your perspectives on market conditions.
"Great Post Thanks"
"I" would like to share my thoughts with everyone.
"I" think the --- "Bitcoin Mania" - and the - "U.S.A. Stock Market Bubble" --- have one thing in common.
"Sooner" - or - "Later" - The "Mania" or "Bubble" - Call it what you like.- Will "Burst" to the downside. They always do.
The "Big Question" is, when will it start " ? " - "Top Out and Die" - "Only Time Will Tell"
"I" do know one thing, when the "Mania"-"Bubble"-"Burst" - It will be a big mess. (Like a very bad case of "Constipation")
"I" would recommend buying one thing. -- "Toilet Paper" -- and a lot of it. If you own any of the above.
Even if you - "DO NOT" own any of the above. - "Stock Up Early" - "I" do think "S--T" will hit the fan.
"If" demand for - "TP" - is higher than supply. - (Price Gouging May Set In) - What do you think " ? "
This is for "Information Only" - "Education Only"
This "Is Not" a recommendation to "Buy" or "Sell anything. --- (Other than "Toilet Paper" and a lot of it.)

Thanks for listening.
"One Eye Jim"
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