BTC/USD
Bitcoin markets rally during the trading session on Monday, breaking above the $8700 level towards the end of the day. This is good price movement, although volume is still a little bit suspicious. I suspect that there is a “ceiling” closer to the $10,000 level and is not until we break above there that we will start to see volume pick up. In the meantime, it does look as if the risk appetite of traders is starting to pick up, and that should help Bitcoin itself. Ultimately, I think that any roll over between here and the $10,000 level is probably an opportunity to build up the confidence if we can bounce again. The recent selloff in the crypto currency markets have a very negative influence on the so-called “dumb money”, which came into the market at the last moment. Many of those people are still down about 60%, so the question is who is going to jump in and start buying? I think institutional money must get involved, or we will have a very long consolidation area.
BTC/JPY
Bitcoin also rallied against the Japanese yen, which of course is a very good sign. The ¥1 million level needs to be broken up and above on a daily close for confidence to be built, and I think at that point we would be looking at a move to the ¥1.2 million level. Ultimately, there’s a lot of noise in that area so I think that it is going to be difficult. Alternately, if we can grind sideways, that might be better in the longer-term as it will build confidence. People are scared that if they get involved in Bitcoin now, it will only be a matter of time before the market freaks out start selling off again. Confidence has been shattered of the last couple of weeks.
