Bitcoin markets rallied during Monday’s trading session, reaching above the $10,000 level again. Ultimately, the market settled near the $10,200 handle, meaning that the market continues to dance around the previous consolidation area. I believe that the $12,000 level above is significant resistance, as we had formed a shooting star that level. However, I think that most of the action right now is corrective in nature, not necessarily a meltdown. I think that the market will continue to bounce around in this general vicinity, with plenty of support underneath. I think that if we make a fresh, new low, the market could continue to reach towards the $8000 level. Ultimately, I think that this market will decide to go higher, but it’s not until we break above the $12,000 level that it’s essentially “free” to go much higher. Overall, this is a market that continues to be noisy and therefore difficult to hang onto.
The Bitcoin market going sideways isn’t much of a surprise if you understand that the large portion of Bitcoin trading comes out of Japan, and the BTC/JPY pair is showing signs of sideways trading. I believe that the ¥1 million level underneath is massive support, just as the ¥1.2 million level above is significant resistance, extending to the ¥1.3 million level. I believe that the market is more than likely than not to rally and try to break out, but certainly we are in the clear yet. At this point, I think that if you are a longer-term investor, you could start building a position, adding slightly as we go along and that the market continues to go in our favor. If we were to break down below the ¥1 million level, I think at that point the market would probably go down to the ¥800,000 level. However, at this point I believe that there are more buyers than sellers looking at this market.