Christopher Lewis
Add to Bookmarks
Bitcoin Price Analysis December 8, 2017, Technical Analysis

Bitcoin continues to rally during the trading session on Thursday, reaching as high as 17,700 on some exchanges, but when I look at the Bitstamp exchange, we only went as high as 16,000. Because of this, the market looks very likely to roll over significantly, and at the end of the day we may very well end up finding ourselves forming a shooting star. A shooting star will be a very negative sign, and quite frankly anybody buying at these high levels are going to be hurting given enough time. I think that a breakdown from here should then reach to the 12,000 handle, perhaps even the 10,000 level. If you are buying at these high levels, you are trying your best to lose money. Quite frankly, I believe the trading Bitcoin at these high levels to alongside is essentially “chasing the trade.”

BTC/USD Video 08.12.17

The parabolic nature of this chart is unsustainable, and I believe that the massive move during the middle of the trading session on Thursday is a sign of a potential “blow off top.” As we pull back, I think there is a lot of profit-taking by professional traders, as they realize this momentum cannot keep up. In general, I think that the “floor” is somewhere near the $10,000 handle, and quite frankly it would not be surprising at all to see this market race back towards it. There are a lot of concerns when it comes to the bubble, and I cannot help but wonder whether it is simply the “dumb money” chasing the market now. When you have 300,000 new accounts at Coinbase over the course of the previous weekend, that is the very definition of “dumb money” coming into the market. Institutional investors have already been involved, and of course those who are longer-term believers have been in the market for a long time as well.

Know where Bitcoin is headed? Take advantage now with 

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

BTC/USD daily chart, December 08, 2017

The biggest problem that I see in this market is that it is foolish to think that the momentum can continue going higher. Unfortunately, by the time he gets out to the general public, the easy money has already been made. I’ve been speaking to several pundits that are dumping off Bitcoin at these elevated moves, as they are collecting profits. Quite often, this happens in almost every market explosion, the longer-term traders are selling at higher prices for those who are willing to chase the trade. They then wait for the market to collapse, and then start buying again. I cannot in good conscience start buying in this area, and even though we could very well see a continuation of the move in the short term, moves like this only in one way: in tears. Caution is the best advice that I can give.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker