Bitcoin Price Forecast for the Week of December 11, 2017, Technical Analysis

The Bitcoin markets have exploded to the upside, gaining thousands of dollars over the last week. However, as we started to approach the weekend, markets did pull back significantly, showing signs of exhaustion. Quite frankly, this is a market that has gotten overextended, and that’s likely that the volume is starting to shrink. We have the futures market coming out next week, and that, of course, is going to cause a lot of trouble. We have a possible 33% retraction of price, and that would only wipe out the last week or so.  I receive constant emails about Bitcoin and where it’s going next, and the reality is that the liquidity isn’t there, so who knows?

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BTC/USD Video 11.12.17

Overall, I believe that this is a market that is going to cause a lot of pain, so longer-term traders should not be chasing the trade currently. I think a significant pullback is necessary, and from a longer-term “buy-and-hold” standpoint, I would be looking to buy Bitcoin closer to the $10,000 level, possibly even the $6000 level. While that seems outrageous, moves like this don’t happen without extreme pullbacks and pain, and that’s what’s coming. I can’t tell you is going to happen this week or even next week, but it is coming.

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One of the reasons I know this is a massive bubble is the amount of pushback that I get from traders who hear me say that. It’s almost something that they take offensively as if it’s a personal attack. I have been advising many of my clients to take profits and sent out a flash message this past week as one of the exchanges almost printed at $20,000 handle. Just 5 weeks ago, we were near the $6000 handle, which of course brings up the old adage, “bulls make money, bears make money, and hogs get slaughtered.” I see a lot of that right now and recognize that although we are in a bubble, there will, of course, be value in Bitcoin. The question is “would you buy it here, and hang on to it as it crashed back towards the $8000 handle?” I can tell you the answer, it’s almost certainly no. Longer-term, I think after we get the massive pullback we could have a nice opportunity, but I would be very suspicious about buying in this area.