According to the chart below, a macro symmetrical target was hit at about $25,700. In Graeme’s opinion, there is a decent chance of some overperformance of this target. It can, however, be expected that within the next few days there will be significant profit taking.
Graeme believes that the price action in the coming weeks / next two months may spike though the target, and potentially wick through $30k (See chart below). Which would then likely result in an impulsive sell-off of around 30%. After the sell-off a consolidation pattern of some kind will likely form, followed by the continuation of the bull trend.
It has been an insane last two/three monthly candles. The absence of wicks compared to the previous two tops is also telling. Wicks show that there are sellers at the extremities of the price levels of that period. Long wicks on top of monthly candles warn that a macro bullish trend is exhausting. There are only a few days left of December and we’re still not seeing any of this…yet!
It is also important to note the price by volume on the left, it is still a very thin volume at the level above $15k, and even $12k for that matter. Graeme feels that the price will settle at some stage and spend time at these levels. But not to say that we don’t see a 2017 like super spike before then.
Graeme further mentioned that we, as retail traders, won’t see a large percentage of the institutional flow coming into crypto, at least not on the major retail exchanges like Bitstamp, Kraken, Binance etc. This is because over the counter (OTC) transactions and deals through institutional brokers are not going to show there.
In which case, if you subscribe to this latest bull run being driven by institutional flow it may be unfair to say that there is much lower volume compared to 2017. This is the reason Graeme has removed the volume bars at the bottom of the screen in the screenshots and now in hindsight it would apply to the volume by price profile too (on the left hand side).
Graeme’s personal view is that the market is not currently in the extreme mania mode of 2017 and this current bull market has significantly more to go, however, there will be some short term significant sell-offs along the way. Fundamentally, he still sees a wall of institutional money wanting to come in.
The early institutional adopters have taken a chance, and have been substantially rewarded, and now look like the smartest guys in the room. None of them, however, wanted to be first, given their conservative nature/fiduciary responsibilities. But now that capital allocation to crypto is more acceptable Graeme expects that no one will want to be last.
Institutional investors are much smarter than retail investors, therefore, one would not expect to see them panic buying when the price is going parabolic. They are, however, definitely susceptible to FOMO and Graeme expects that we may see a good deal of institutional FOMO before this bull market is over.