Bitcoin Price Report for December 21, 2016
Dec 21, 2016 --- (ARCHIVED) Free Reports
Market Commentary:
It's official!!! Bitcoin is over 800 $ per coin for the first time since early 2014!!! In our opinion the main drivers of the rally appear to be seasonality and supply shortages, however the market will need to transition into more of a demand-side story going into 2017 if prices want to keep climbing to new highs. With that said, we think sovereign wealth funds, small hedge funds, and ETF inflows will be the source of the bulk of the demand, which might actually be getting started now considering we got word that a German legacy asset manager recently added over $2mil in XBT shares to his portfolio. We can't help but think this is partially why we saw a breakout over 800 $ last night, and actually could catalyze an even bigger move if other managers decides to do the same.
But enough talk about fundamentals. Let's get to the technicals to see where we stand for the time being via the 6-hour chart below. Notice that the rising wedge did in fact resolve to the upside, a rare occurrence indeed, which tells us that the bulls remain in full control and [members-only text]. We can also see that SCMR is painting [members-only text] while monthly dynamic support continues to build around [members-only text]. Additionally, we are now out of the near term supply area which had been holding back price for awhile, so this patch of resistance should now become support. Generally speaking, things look on track for a continuation going into 2017.
Moving on to momentum and volume, notice that things haven't changed all that much over the past 24 hours considering the market was already overbought before the rally. We can see that Willy, RSI, and the Stochastic are all officially overbought now, however MACD is confirming the breakout, PPO is not yet flashing sell signals, and all relevant short and medium term moving averages are stacking to the upside. Again, these are likely signs of strength, not exhaustion.
Finally, despite the fact that price is now well outside of the volume profile value area in which multiple notches exists below it, both the A/D line and exchange volumes are telling us [members-only text]. While we still can't rule out a correction back down to test support in the [members-only text] area, we would be [members-only text].
Taking the technicals and fundamentals into consideration, we have closed the VST ProTrade breakout play from a few days ago at the 815 $ target in order to lock in some profits in case of a pullback. We acknowledge that price could easily extend further to the upside, perhaps to the [members-only text] target area, however we also think that the current risk/reward profile has become unattractive enough to warrant moving to the sidelines. Having said that, we welcome the next selloff with open arms so that we can jump back in on the long side for another ticket to ride the train to the moon ;)
Posted ProTrade Ideas:
1a.) **Bitcoin ProTrade - Very Short Term [UPDATED on 12/21/2016]**: (a) We will consider a [members-only text] position in the [members-only text] area with a stop around [members-only text] and a target of [members-only text].
1b.) **[ENTERED @ 793 $ on 12/19/2016; CLOSED @ 815 $ on 12/21/2016 for +2.77% PROFIT]**: We have closed our LONG position off the 793 $ level at the intended target of 815 $ for a profit of 2.77% in less than two days.
2a.) **Bitcoin ProTrade - Short Term [UPDATED on 12/21/2016]**: We will consider a [members-only text] position in the [members-only text] area with a stop around [members-only text] and a target of [members-only text].
2b.) **[UPDATED on 12/14/2016]**: We will consider a [members-only text] position in the [members-only text] area with a stop around [members-only text] and a target of [members-only text].
3.) **Bitcoin ProTrade - Medium Term [ACTIVE; UPDATED on 12/5/2016]**: We will stay [members-only text] off of the [members-only text] level with a stop around [members-only text] and a target of [members-only text]. We will add to the position on a pullback to the a [members-only text] area.
4.) **Bitcoin ProTrade - Long Term [ACTIVE; UPDATED on 12/5/2016]**: We will stay [members-only text] off of the [members-only text] level with a stop around [members-only text] and a target of [members-only text]. We will add to the position in the [members-only text] area.
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