November of 2017, specifically the last week of that November, is going to down as one of the historical time periods for not only Bitcoin but cryptocurrencies as a whole. We saw Bitcoin reach and breach the $10,000 mark, increased media focus on Bitcoin (with the White House Press Secretary even confirming that Homeland Security is monitoring Bitcoin!) and confirmation of a release date (December 18th) for the new Bitcoin Futures Contract from the CME (Chicago Mercantile Exchange).

Bitcoin and Ethereum in November

For both pairs, November was a great month to be bullish. Let’s look at the BTCUSD pair first.

 

Bitcoin started the month with a little profit taking around the $7537.89 area. The dip down was very quickly supported and bought up (as has happened throughout the entire year for Bitcoin).

  1. The darker shaded horizontal volume parts display the price area where BTCUSD was mostly traded. The thin red horizontal line represents the VPOC (Volume Point-of-Control). If we look at the entirety of the volume profile, it appears to have formed a b shaped profileb shaped profile usually means we have had some long liquidation. This doesn’t mean that future price action is bearish, what this really represents is a pause in the move up. This liquidation is just buyers taking profit.
  2. The trend over the entire month continues to be bullish move up. At the $10,000 level, we saw some significant volume come in to play, very large volume. The volume was so significant that it did crash a number of the exchanges. We had some the largest amount of volume in the history of BTCUSD on the break of the $10,000 level in addition to some profit-taking.

What to look for

  1. Notice the volume profile gain and you can see the formation of another b shaped profile. However, in order for it to show up, we are going to need higher prices being traded and price to return to this $10,900 to $9,750 area.
  2. Expect price to continue to March forward, the trend is very strong with this pair.

Next, let us take a peek at Ethereum.

Ethereum also had a nice swing to the upside, owing most of that move to the strength of Bitcoin. We did have a breakthrough of an important resistance area (blue horizontal line). When Bitcoin broke the $10,000 level, we saw Ethereum make a similar large move. Ethereum has moved back into it’s previous value area.

  1. Like the BTCUSD chart, we have a b shaped profile.
  2. Here we have a p shaped profile forming. P shaped has a very bearish sentiment attached to it.

 

 

What to look for

  1. Notice the oscillator below. The oscillator is showing some sloping to the upside. This would make sense because Bitcoin is also moving up.
  2. Be very careful of the whipsaws that can hurt a trading account, especially when we are at these historical price ranges.
  3. There is nothing to indicate the buyers have stopped.
  4. A good profit area, if you are already long, would be before the top black line.

 

On the 18th the CME is launching the first Bitcoin contract. What this means for traders and investors of Bitcoin is exciting and risky. It will be interesting to see what happens with Bitcoin when the Futurse contract is active, because you will be able to short Bitcoin futures and trade it on margin. The other component to this is that the volume and influx of institutions will absolutely add to the volume. The crashes that happened to the various crypto exchanges on the 28th are somewhat worrysome to me. If the exchange do not have an infrastructure in place to accomodate the increased volume of traders and investors, we may have a fairly bumpy ride going into 2018.

Remember, trading is not about winning and losing. It’s about surviving! So trade safe!