Bitcoin Price Slides 10% In PostXmas Selloff As CNY Premium Drops to Discount

[bitcoinmarkets]

web version here: http://www.bitcoinfuturesguide.com/bitcoin-blog/bitcoin-slides-10-in-christmas-dump-as-cny-premium-to-usd-exchanges-evaporates



Major selloff the day after Christmas Day as Bitcoin dropped 10% in Spot markets, and even more on the futures market. Quarterly contracts were stable at $480 before making a massive drop within 6 hours down to $410, an over 15% move.
Looking at the CryptoFacilities Price Index we can get a good appreciation for how precipitous it was:

A massive dump, over 10% across the board, enough to margin call anyone who was using "moderate" leverage of around 10x, but not quite enough to be classified as a flash crash and hit those who were using 3x margin.

​Another thing worth mentioning happened in the process of this selloff: the CNY premium has now evaporated and become a discount:

Last time this happened was after the big dump from the $500 test in mid November, and we were flat for almost two weeks as the CNY exchanges traded around par with the USD exchanges.

Additionally, the futures curve from OKCoin is looking as bearish as ever. It was signalling some bearish sentiment in the days before Christmas and served as a pretty accurate indicator for this big selloff. Now, the Futures Contract Spreads tool is showing an incredibly bearish sentiment:

Negative premium for weeklies and biweeklies on OKCoin, while quarterlies have an annulized premium just barely above 6%. This is almost as low as the BTC yield from Bitfinex.

So it's pretty grim for now in the bitcoin market. The sentiment remains negative and with CNY exchanges looking sluggish it's hard to see where the demand is going to come from to move this price up as we go into the new week.

Support is holding in the low $400s for now, but if that breaks it could get ugly fast. However, a consolidation period for the next couple weeks, similar to what we had when things got really bearish in the $300s in November, may be bullish sign for 2016.

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[PakistanHockeyfan]

In theory, the price must drop in order for more users to purchase and invest. It's all about proper manipulation.

[Amph]

In theory, the price must drop in order for more users to purchase and invest. It's all about proper manipulation.

yeah but as long as after each new drop we achieve a new bottom this will lead us to a better value in the future

manipulation will be less strong in the future, unless those rich guy in bitcoin are able to maintain their current amount or more even in 10 or more years of a time frame

[Ch3wbacca]

That was distribution and profit taking from those who manipulated it from $350 to $450. Ofcourse right now we retraced but this may be temporary and accommodated by another drop.

[mobnepal]

I think it is good time to buy more as we may see 480 or even around 500 by start of new year. But i will sell at that point because i don't think bitcoin can be stable over 500 like last time it droped after reaching 500.

[btcdevil]

I think it is good time to buy more as we may see 480 or even around 500 by start of new year. But i will sell at that point because i don't think bitcoin can be stable over 500 like last time it droped after reaching 500.

i dont think so because like you most of the small traders will be having the same view and big players will cashout on your theory and if i am not wrong this time if it cross $500 mark then we can see $550 and above price. because around $500 most of the small traders will try to sell it off and that time only big players will play their game and make the market go more up and that time small traders will start buying back on high as they will think more high is on card.

This is the strategy they are following for most of the trading on products or commodity they are using and are in profit.

[HabBear]

In theory, the price must drop in order for more users to purchase and invest. It's all about proper manipulation.

This isn't true, new users don't need a drop in price to buy bitcoin, they can buy bitcoin at any current price.

So it's pretty grim for now in the bitcoin market. The sentiment remains negative and with CNY exchanges looking sluggish it's hard to see where the demand is going to come from to move this price up as we go into the new week.

Support is holding in the low $400s for now, but if that breaks it could get ugly fast. However, a consolidation period for the next couple weeks, similar to what we had when things got really bearish in the $300s in November, may be bullish sign for 2016.

You may want to update this thought. Is sentiment grim when the price rebounded halfway back up to the high in the few days after the xmas sell off? If anything that indicates that there is HUGE support for the price right now. Similar to how briefly the market allowed the drop below $200 to exist (back in the Spring)

[pitham1]

I think it is good time to buy more as we may see 480 or even around 500 by start of new year. But i will sell at that point because i don't think bitcoin can be stable over 500 like last time it droped after reaching 500.

Yes. It is good time to buy now. The price will be around $500 in January next year. It will rise slowly from there.

When you say next year, do you mean 2016 or 2017?
People will be disappointed with a price of $500 in Jan 2017. 

[Gotimour]

I think it is good time to buy more as we may see 480 or even around 500 by start of new year. But i will sell at that point because i don't think bitcoin can be stable over 500 like last time it droped after reaching 500.

The price below $400 is good to buy. I think the price will go to $500 when traders coming back from holiday.

[helloeverybody]

I think it is good time to buy more as we may see 480 or even around 500 by start of new year. But i will sell at that point because i don't think bitcoin can be stable over 500 like last time it droped after reaching 500.

Yes. It is good time to buy now. The price will be around $500 in January next year. It will rise slowly from there.

When you say next year, do you mean 2016 or 2017?
People will be disappointed with a price of $500 in Jan 2017. 

If the price stays steady and slowly rises past $500 for 2017 it might show more stability in bitcoin, as long as we dont slide back to the lows, Saying that for 2017 i would be wnting around $700 hopefully, but maybe thats just wishful thinking.