BTC/USD

Bitcoin fell against the US dollar again on Tuesday, reaching towards the 50% Fibonacci retracement level, and the psychologically important $10,000 level. While a lot of Bitcoin proponents are making a big deal about the $10,000 level holding as support so far, those of us who specialize in technical analysis understand that even though the $10,000 level has held as of now, volume is dropping. That dropping volume is not a good sign. Accumulation means just that, people were accumulating. With no volume to speak of, and with that volume dwindling, that tells me there is no accumulation, and that if we get some type of sudden negative reaction, the market is going to break down. If it does, anticipate a move to the $8000 level. In the meantime, it volume remains very low as it has been, rallies are to be sold.

BTC/JPY

Bitcoin has also fallen against the Japanese yen, the most important currency that it trades in. Japan is 40% of the volume worldwide, and therefore if the yen appreciates against Bitcoin, a large chunk of the market is not buying. We are testing the 61.8% Fibonacci retracement level, which is essentially the ¥1.1 million level. That is a support zone that extends down to the psychologically important ¥1 million level, so on a break below that level, I think that the market drops to the ¥800,000 level rather quickly. In the meantime, I like selling rallies and believe that the ¥1.3 million level above offers resistance. With the lack of volume, it shows that there’s no interest in owning Bitcoin, or at least buying more, in Japan. If that remains the case, Bitcoin is going to struggle going forward, and I think that perhaps we have further downward pressure coming. If we managed to break above the ¥1.33 million level, then I would be convinced that we could go higher.

Print Friendly, PDF & Email

Related Posts