As Bitcoin kicks off 2020 with a +22% rise in January, we have been keeping an eye on the resistance levels we need to clear before another attempt at an ‘All-Time-High’ can occur. Looking at the Volume Profile in the past 3 years on Coinbase, approximately 90% of buyers in the last 3 years will be in profit once the price clears $12,000. This means sell pressure from BTC purchased at a loss will be negligible above that point and higher moves will have dramatically less resistance. Admittedly, it’s a little early to call it now, but expect further positive volatility if the price can rise above $12,000.
The Volume Profile displays the amount of Bitcoin volume traded in that price range, rather than against the time. For example, 420,000 BTC has been traded on Coinbase in the $11,400 - $11,900 range. A Volume Profile is useful to identify the amount of potential sell pressure on the market from those who purchased above the current price, as they may be setting sell orders once Bitcoin recovers to their break-even or loss-recuperation price.
Clients often ask whether we can Buy or Sell Cryptocurrencies at specified prices. As it is a 24/7 market and things can move so fast, it is often a good idea to set trades up in advance, so you aren’t rushed or stressed when times of parabolic movement arise. The short answer is yes, however, there are several steps involved which need to be understood first. Firstly, as this space is constantly changing it is critical that clear communication is made between you and your broker. That way trades can be set up well in advance without misunderstanding or uncertainty. For example, if you wish to sell Litecoin (LTC) at prices ranging from $80 - $110 you can communicate this to your broker, outlining specifically the units you wish to sell, at what prices and in what currency. Clients often request to sell certain coins into other coins such as Bitcoin at target prices.
The complexity and range of options here is for you and your broker to discuss, we are a flexible service and will endeavor to put things in place that can best suit your strategies so you can capture the upturns of this market. Please feel free to reach out to your broker and discuss this further at your leisure.