The triangle bucked expectations and resolved to the downside as the rising channel support line was decidedly broken in the white box. The future test area was unequivocally met with the motive (impulsive) waves that are a short seller’s wish. The $15,500 is the rising support on the dailychart and $14,700 is support below. Unfortunately, volume is strong on the red candles. On a positive note, red candles have formed long wicks around $16,000, indicating the downtrend is getting tired.
Traders who went short the CBOE contracts when top at $19,700 when the TradingView idea mentioned earlier was posted are deep into the money. Presently, we will look for positive correlations between bitcoin and altcoins in a bitcoin downturn.
It will be interesting to see whether bitcoin contract shorts are in play or just the fear of shorts. Margin is 47 percent and a bitcoin contract is a cash settled, synthetic product with a notional value of five bitcoins. There are January, February, March and June bitcoin futures contracts.
Disclaimer: Daniel Bruno holds significant positions in cryptocurrencies.