BTC/USD
Bitcoin markets rallied significantly during the day on Thursday, after initially looking a bit soft. We gained over 5%, and quite frankly we needed to see that as we were approaching the $6000 level. The $6000 level underneath is a massive support level, and I think that if we break down below there things could get rather ugly. We are at an area where bitcoin could turn things around, because quite frankly this is an area that structurally should be supported. If it does not turn things around soon though, we could unwind several thousand dollars. I would be very cautious, but if you are inclined to go long of this market, do yourself a favor and only add to it slowly. The $6000 level is very structurally important, so the fact that it has held so far is not a huge surprise.
BTC/JPY
Bitcoin rallied against the Japanese yen during the day on Thursday, showing the ¥700,000 level to be supportive. This is an area that has been the bottom of an overall consolidation range, so it’s not a surprise it we got a bit of a bounce. However, I think that the ¥800,000 level will be resistance, and most certainly the ¥850,000 level will be as well. If we turn things around and break down significantly below the ¥700,000 level, that is also going to be a sell signal, because it would be so soft. The thing that does concern me about this market is that the last time we tried to rally, we could make it back to the top of the consolidation rectangle, something that is typically a very negative sign and can often foretell more selling pressure and a break down coming.
