Crypto Trading #14 – Technical Analysis Bitcoin Futures

JB Trader:  Hello everyone this is JB Trader and welcome to Crypto Trading.

Today, I want to do a quick review of the current price action that the Bitcoin futures have had since they’ve been available in December.

Right now, I just want to take you through candle by the candle on a daily chart and just kind of analyze price action. On the day of its open, which is on the 18th of December, the price opened here about 17.9 and closed for the day at about 19.5.

The next day, we have a higher high. The price closed within the prior days trading range. It went over when its high is 20,651 and then the next day we have a lower low.

This low is broken. Now we have a lower high and a lower low. That’s consistent with the downtrend. Again, this is on a daily.

Since we don’t have a lot of price history, we don’t have any data to go off. When we look to the left, I don’t see areas of resistance and areas of support down here.

That’s why you have a lot of traders that really aren’t trading it because we need more historical data to have price points. That’ll lead us to a higher probability trades of working, either for a long or a short.

Again, people have different reasons for trading futures. You just want to be exposed to the Bitcoin prices and volatility without having to own any physical Bitcoin.

It’s a cash-settled contract and basically you’re just speculating on the future price of Bitcoin and buying or selling it today, based upon what you think it’ll be in the future.

All right so moving on. Another lower low. This low was broken. That’s a downtrend.

Now, remember what price was doing is leading up to the availability of the futures contract. It was just on a super strong rally in anticipation of the futures coming out. Once it did, it just kind of made a high and fell out.

I’m gonna color code this. I’m gonna make this blue for my high. Just the downtrend right here. This is the below.

This is a trend line of a downtrend. This is the high needs to be broken to continue to go up, to show strength. This was the prior low that was broken. This is the new low.

Try to always know your highs, lows, your breakout to the high number and your breakout to the downside number. You can put an alert on these lines so you’ll get like a text or an email when these things happen if you’re not in front of the computer all the time.

Let’s move on. The next day, we got another lower low. The downtrend is holding. It’s like a channel. It’s a very strong downtrend. It’s more than one way to do things on these platforms. Just keep that in mind.

Now, we have a lower low and a lower high. Downtrend. Don’t know how far it could go down, don’t know how high it could go up. I know if it comes up here, it will be in an area of resistance. That’s what we can see so far.

Broke the low again, but it did bounce, so it came close to about 20,050 and had a very good reaction to that. A lot of buyers are waiting there.

Still on a downtrend. Now I can kind of change the angle of this, make it a bit steeper. Now, you can cut off the wicks.

Futures on the CME are regulated in a centralized way, so everyone’s seeing the same numbers. Therefore, you kind of wants to stay on the wicks and the tails for this. That’s your trend line.

We have an area of support that has proven itself at this price point of 12,250. Now, we have a slightly higher high. Moving down here to see how the prior trading days high was broken. Now it closed right at the prior trading days high.

All right that’s where we’re at. It shows it is strengthier. Another higher high and higher low. The reversal in effect. People trade that. There we go.

This height now still closed right here at 14,676. It didn’t close above the prior days high but it did trade above it.

Showing some strength there. This downtrend is broken. I’m gonna take that off and if you want, you could start an uptrend. There you go. Low is broken again.

This is the last swing high here at 16,467 and it made a lower low. It broke the prior days low for 14 and it broke the low of the day before that.

Now it closed here at 13,724 which is at low of this day. A lot of these prices show up more than once, so that’s why it’s very important to map out your highs, your lows, your opens and closes of each trading day.

On this traded day within the prior days trading range, it made a higher low but not a higher high.

On this day, we made a price traded above the prior day and below it. This area of support is just holding, so it went lower. See how we’re digging a little bit deeper each time into this area of support, which you want to pay attention to.

This trading day range swallowed up this day, which is good. Show some strengths. Getting somewhere. Trying anyway. Small trading day range went slightly above the prior day high just a little bit, but still in this range.

Same thing. Area of indecision. The price stayed about the same. The day’s open and close were very close together. We broke out of this range here. Price actually closed right at this space. The last swing high of about that 16,550 area. We did trade above it.

For people who do like breakout trading, if you went long because we broke out above this price point, that’s the game you’re willing to take instead of waiting for the price to come back down and get in long.

You want to get along because you want to make sure you don’t miss it and you’re also going with the trend. Therefore, people get in long right here. That’s why you have some trades here.

The next day price failed to continue to go higher. It actually made a lower high and a lower low. Price closed here at about the prior day low.

If you want to have a stop, you might have put your stop below here, or even you know here, but really should be here.This is predictable. You’re in a range, so be careful. Some traders say the range is the easiest chart to trade where you see the prices falling in areas of resistance and prices turning to the upside in areas of support.Don’t think too hard just follow what it’s been doing.

Now we’re going back down again.

Inside trading day here, we did not make a lower low, but we did not make a higher high. Still hovering around that 14,690 area.

The next day we made a lower low. Traded lower than the last couple days, but this area of support is still holding, 13,520, still held.

The up-and-down movement of a range is still playing out. On this day, I made a traded above the prior days high and we traded below the prior days low. The price closed below the prior days low.That can be a bearish day and we’re just kind of beating up this area of support.

How long is it gonna last? Different traders have their styles in trading in a range. They’ll say okay if it hits up against support or resistance 2 times, it could breakthrough on the 3, 4 or 5 times.

Different products that you trade will behave differently, so it’s good to learn the personality of whatever you should trading. You trade it for a while. Just to watch it, but trade inside from the edges until it breaks out. That’s what you do with the range.

So support has held. Price held. Held this low here. Now it didn’t make a higher high, so it’s not really strong. However, the day did end on a bullish note. Closed up here: 13,9. Next day, higher low, higher high not by much but it is.

Now we have a lower high and a lower low still in this little tight range right here. Now we have even a tighter range.

That’s it. That’s where we’re at right now.

For key points, I’ll go ahead and get the price up here, 12. I’m gonna snap this into place. When you snap it, you get an exact price. That’s 12,265. The top trading is 20,650. So right here. Bitcoin futures contract. F is for the January contract. 18 represents 2018. Each candle represents a day.

Now, you want to keep in mind that the last day to trade this January contract is the last Friday of each month. The last Friday of this month is January 26 and it closes a 4 p.m, London time.

Now the contract settles on January 31st, the last day of the month. That’s the settlement date.

Keep in mind that the 20% hard limit rule is in effect. It can be in effect on the last trading day. They won’t halt the trading, but they will only allow trading to occur within that range. They won’t allow any to occur outside of 20% to the upside or the downside of the prior days’ settlement price. There are some protections from extreme volatility on that date.

Now, a lot of traders are waiting until after this first contract expires. They want to see what happens. How high is the volatility going to be? How much of the price gonna start swinging around towards the last day of trading?

Its unknown, so it’s good to go off historical data and behavior of whatever it is you’re trading. In terms of the February contract, the last day to trade it is on February 23rd. The settlement date is the 28th. Keep that in mind if you want to start trading the February 1.

Here’s your range, high and low. We’re in a tight range right here. It’s kind of consolidating sideways.

If it breaks to the downside, I don’t see any areas of support here. If it breaks to the upside, it breaks this high of 16,520. You still have a lot to get through up here.

Any one of these days can be an area of resistance. You just never know what will work. There are still some sell orders there.

Thanks for joining me and just keep your eye on these price points.Happy trading and safe trading. See you later. Bye.

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