BTC/USD
The Bitcoin markets broke down significantly during the week, and as we are finishing the Friday session, it looks very likely that we are going to continue to try to reach towards the $8000 level. Below there, there is a hammer that formed several weeks ago that defines a significant “floor” at the $6000 level. At that level gets broken, I suspect that Bitcoin will collapse. At this point, there are some value hunters in this general vicinity trying to get involved, but the question is whether it can hold. So far, the support continues to be strong, but being tested these many times is not a good sign.
BTC/JPY
Bitcoin fell against the Japanese yen as well, reaching down towards the 61.8% Fibonacci retracement level. By breaking below the ¥1 million level, we are starting to test serious support based upon a previous hammer, that extends down to the ¥650,000 level. If we break down below there, the bottom will fall out of this market and we will almost certainly drop to the ¥400,000 level. Ultimately, this is a market that I think will eventually find buyers, but the question is whether we need to collapse first. I think that this market continues to be very noisy and difficult to hang onto, but the longer-term trader needs to simply understand that the market is one that you are going to need to have a lot of wherewithal to deal with as it has been nerve-racking, to say the least.
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