BTC/USD
Bitcoin rallied initially at the open on Wednesday but turned around to retrace back to the $8100 level. At this point, it’s obvious that there has been a lot of bullish pressure, but I also recognize that we probably need a little bit of a pullback. Looking at the candlestick for the day, you can see that we are still well above the $8000 level, and at this point I would not be surprised to see the market pullback below there. I recognize that the $7600 level underneath probably represents significant demand, so I think that the buyers will come back in if we drift down to that area. That being said, I think the short answer is that we might be just a bit overbought in the short term. Where does bitcoin go from here? It’s hard to tell but I would not be surprised at all to see a pullback and then the continuation of the bullish move that we just had, perhaps reaching towards the $10,000 handle.
BTC/JPY
Bitcoin also tried to rally against the Japanese yen initially during the day but pulled back a bit as we had gotten a bit over exhausted. The ¥950,000 level course offers a significant amount of resistance, and I think that probably will facilitate a move lower, perhaps down to the ¥850,000 level where I see more demand. I believe that the target is ¥1 million above, and it may take some time to get there. After all, the markets have rallied quite stringently over the last couple of days, perhaps a bit too much. Markets can’t go in one direction forever, and certainly a reversal of the trend takes a lot of effort. If that’s truly what’s going on now, we will have very volatile market to deal with.
