According to the firm Autonomous Next, the number of hedge funds investing in digital assets like Bitcoin has grown rapidly to more than 100. Since the launch of Bitcoin Futures on the Chicago Mercantile Exchange in December 2017, it shouldn’t be a surprise to anyone why the price of Bitcoin is down 50% from the high.
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Only Retail Investors chase price and buy high and sell low, while the Professionals buy low and sell high. The Hedge Funds have purposely sold Bitcoin futures to get in a better price.
At the moment, there is a war taking place between the buyers (Hedge Funds) and the sellers (Retail Investors) called capitulation. That line in the sand was at $9000. Capitulation is when investors give up any previous gains, by selling, in an effort to get out of the market. Capitulations are outcomes that result from the maximum psychological and financial pain that can be endured by a group before throwing in the towel. The Retail Investors are throwing in the towel after seeing a more than 50% correction in the Bitcoin price to the buyers, the Hedge Funds. With 100s of millions of dollars to invest, we are witnessing an accumulation phase by the Hedge Funds between $6000 and $9000.
The Hedge Funds are loading up and buying from the Retail Investors. But to fill all their buy orders, as the sell orders dry up, price must go down to the next stack of sell orders. We are approaching what I believe will be the bottom of bitcoin at $6000. My first target is $12,000 and my second target is $17,000 over the next 3 - 9 months.
The easy money has been made over the last 12-18 months. With the big boys in the game now, the rules have changes. The question is, are you ready to play to win with a new play book?
This post is my personal opinion. I’m not a financial advisor. Do your own research before making investment decisions. By reading this post, you acknowledge and accept full responsibility of any gains or losses.
Couldn't agree more. I come from the FX world where you have these guys fucking you on every set up. I'm not saying I played this perfectly (I actually posted a bullish tech right at the top and did not at all see a correction this deep), but I did exit my levered CFD longs on the way up around fifteen. I also warned people that things were going to get tougher when the big boys came to town, as did my colleague from the forex world @furious-one ... most were very dismissive of the notion.
Investment banks don't play nice, hedge funds don't play nice, LPs don't play nice and real trading is a shit fight compared to the 2017 crypto rally. Top comment, hope to read a few more!
Completely agree with you. Now we have a deal with professionals. They play hard and the real trading in crypto world will begin from this starting line forming in passing few days. They will try to push again and its possible that we can move a few stairs lower. But this is it I think also. The following of a big stream can be started by us smaller fishes.
Great explanation. Too bad the market is mostly made up of many weak hands that just FOMO'd on Bitcoin last December. The smarter HODLers were outnumbered. With the entry of the big boys, I think the charts can be more predictable now? BTC was defying TAs before huge volume of money entered the market.